THE UNIVERSITY OF NOTTINGHAM MALAYSIA CAMPUS
Dr Barker, Thomas (University of Nottingham Malaysia Campus)
Dr Lee Yuen Beng Adrian (Universiti Sains Malaysia)
Lim Rui Lin (University of Nottingham Malaysia Campus)
Loke Elween (Universiti Sains Malaysia)

Presented at
CAMDEN2: Trends in Culture, Arts and Media Symposium
Universiti Tunku Abdul Rahman, Malaysia
9 February 2015

Introduction

The Malaysian government has set itself the ambitious target in Wawasan 2020 of becoming a
developed nation by 2020 (Unit Perancang Ekonomi, 2013). Under Wawasan 2020 Malaysia hopes
to be a high income nation with corresponding levels of infrastructure, economic diversity, and
social harmony. With five years to go before this vision needs to become reality, Malaysia is
struggling against a number of ongoing problems including increased social division and tension,
brain drain, corruption, and a policy environment that does not always produce desired outcomes.
Over the past ten years, the creative industries have increasingly been touted as an economic
sector that would be essential to fulfilling the goals of Wawasan 2020. It is expected that the
creative industries will contribute RM33 billion to Malaysia’s GDP by 2020, up from RM9.4 billion in 2012 (“Rais,” 2012).
（Featured Photo：Operalady by Soubhagya Jena）

The creative industries have attracted policy attention globally because they have been recognised
as an essential component of post-industrial economies in which forms of knowledge and
information are deployed to generate economic wealth. In a 2014 speech, Prime Minister Najib
Razak proclaimed that the creative industries have “a really big potential to contribute to the GDP” (“Government to continue,” 2014). In 2009 the Dasar Industri Kreatif Negara (DIKN, National
Creative Industry Plan) was launched, outlining the direction and content of Malaysian creative
industries policy in the decade ahead (Menteri Penerangan Komunikasi dan Kebudayaan [MPKK],
2009). Since 2009 Malaysia has been able to boast of creative industries success with the ongoing
success of animated TV series Upin & Ipin (2007) which has been exported to Indonesia, local
office of Rhythm & Hues contributing to the Oscar-winning special effects in the Hollywood movie
The Life of Pi (2012), and Tomato Animation’s Chinese Zombie War games finding markets in
China, Taiwan and Hong Kong (Azizan, 2013).


This paper discusses the DIKN policy paper and the current direction of Creative Industries policy in
Malaysia. In particular it highlights the numerous, often overlapping and confusing, array of policy
initiatives designed to target the creative industries. Some success has been recorded in the
animation and digital media industries which have been a focus of policy attention, but in the film
industry for example which is a staple creative industry, the record of success and policy clarity is
far less apparent. Finally, the paper considers the current projects that are being developed to
boost the creative industries to ask whether they are suitable to the task of building Malaysia’s
creative industries for the transition to developed nation.

Creative Industries and the DIKN

Since the release of the DCMS Creative Industries report in the United Kingdom (Department of
Culture Media and Sport [DCMS], 1998), defining the creative industries, mapping them, and
developing appropriate policy has become increasingly prominent around the world. Urban and
regional administrations from the UK, Hong Kong, Singapore, United States, Australia and other
places have used the DCMS definition as a means to assess and promote their own creative
industries. In the DCMS definition the creative industries are defined as “those industries which
have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property” and for practical purposes, divided into 13 different categories consisting of advertising, architecture, arts and antiques, crafts, design, fashion, film and video, video and computer games, music, performing
arts, publishing, television and radio (DCMS, 1998). By bringing together previously distinct artistic
and cultural fields such as the fine arts (theatre, dance), with cultural industries such as film and
music, with industries creating content such as advertising, policymakers are able to develop a
single policy platform in order to develop the creative industries, especially as generators of new
economic growth and wealth creation.

Other definitions of the creative industries and categorisations have been developed either in
opposition to the DCMS model which is seen as too reductive and policy-driven or by adopting a
more academic approach. One problem that has been noted, is that the concept of the creative
industries has been driven by policymakers rather than academics. Models such as the Concentric
Circles model which categorises industries based on the ratio of cultural and economic input, with
fine arts forming a ‘core’, in an outer ring cultural industries like film, and on the outside industries
such as advertising (Throsby, 2008). WIPO for example emphasises intellectual property as a
common denominator of what are conventionally grouped as creative industries (World Intellectual
Property Organisation, 2003). However it remains the case that there is significant disagreement
and slippage in current definitions, even if it is generally acknowledged that the creative industries
include film, television, digital media, music, theatre and performing arts, and to a lesser extent
fashion, advertising, arts and crafts, and museums.

Malaysia’s DIKN document issued in 2009 is to date the only policy document that defines and
articulates a creative industries policy for Malaysia. When it was launched the DIKN was touted to
“empower the creative industries as a whole based on creativity and innovation, thus contributing to a high income economy and to uphold the nation's cultural heritage” (Yatim, 2011). DIKN divides the creative industries into three categories: Creative Multimedia, Creative Cultural Arts, and Creative Cultural Heritage (see Table 1 below). Whereas the DCMS model does not differentiate between different sectors, the DIKN acknowledges that there are technological, creative, and platform differences between the three. It also makes explicit the emphasis given to digital media which has become a focus of government agencies, and the only creative industries sector targeted explicitly in the 2015 Budget (“Bajet 2015,” 2014).


The twin emphasis in the DIKN is on the economic contribution of the creative industries and on
mainstreaming intellectual property. Expanding employment opportunities is emphasised as is the need to find markets overseas and export cultural products. According to the DIKN document, Malaysia’s creative industries contributed only 1.27% to national income, less than half of what comparable countries record (DIKN quotes figures of 3%-5%). Clearly Malaysia finds itself in a
position of relative disadvantage in terms of the size, contribution, status, strength, and visibility of
the creative industries in comparative terms.

As a key policy document for the Creative Industries, what becomes apparent is that the DIKN is
largely just a generic reiteration of creative industries policy from elsewhere. Whilst the document
adopts global lexicon and reference points, it adopts these uncritically and simply uses them as a
glue to bring together so-called ‘creative’ activities being conducted under the purview of various
ministries and agencies. This is evident in the use of ‘kreatif’ in each of the three categories (see
Table 1.). First, there is no explanation as to why the adjective ‘kreatif’ is needed as each category
is coherent without it. Secondly, the use of ‘kreatif’ is problematic in the ‘Cultural Heritage’ category
when used to bring together museums, archives, preservation (pemuliharaan) and restoration
(pemulihan). It is highly debatable whether preservation and restoration are creative activities and
whether archives and museums are creative in the same way as performing arts or advertising, and
if they are, why are art galleries and libraries not included.

More broadly though, despite the DIKN being formulated as a key policy document outlining how to
develop the creative industries Malaysia, it has not featured as a prominent cornerstone or
reference point for subsequent policy aimed at the creative industries. Despite the DIKN being a
foundational document, in the period since its publication there has been no clear development of
creative industries policy based on or that builds on the DIKN. All the DIKN does is to compile in one document the range of government initiatives that can be classed as promoting the creative
industries under one umbrella called the DIKN. It is nothing more than an umbrella document, and
not a radical rethink or reformulation of the current policy environment. Instead, Malaysian
government policy comes from an array of agencies and through an array of policy initiatives which
as the next section shows, are multiple and complex. There is no effort here to develop much
beyond the recognition that the creative industries need to be developed.

Current Creative Industries Policy

Malaysia’ current policy response and environment for creative industries is somewhat muddled and
confusing with multiple agencies, schemes, and programmes. Most explicit creative industries policy
is implemented by one of two ministries: Ministry of Communication Media (MCMM) or PEMANDU,
the Prime Minister’s Office, but may also come from Ministry of Culture, Arts and Heritage
(Kementerian Kebudayaan, Kesenian dan Warisan). MCMM and PEMANDU operate a number of
different schemes and programmes, designed to encourage and support certain types of work.
Under MCMM sits the important agencies Multimedia Development Corporation (MDEC),
Perbadanan Kemajuan Filem Nasional Malaysia (FINAS) and Malaysian Communications And
Multimedia Commission (MCMC). PEMANDU oversees the Economic Transformation Programme
(ETP) whose goals are closely aligned with Wawasan 2020.

Since the late 1990s, MDEC has been responsible for overseeing the MSC (Multimedia
Supercorridor) and within it the development of digital and technology related industries. The MSC
was envisaged as a kind of technology corridor, similar to Silicon Valley in California, that would
extend from Central Kuala Lumpur down to the administrative centre of Putrajaya and the new
technology centre of Cyberjaya. MDEC’s emphasis is clearly on developing technology based
industries especially those operating in the digital economy, with high speed internet a centrepiece
of the MSC plan. In the Creative Multimedia Cluster (CMC) of MSC status companies, MDEC (2014)
records 399 companies including 104 animation companies, 52 games companies, 100 in film, TV
and VFX, and 54 in new media. Table 2 above records the economic contribution of the companies
in the CMC.

MSC and MDeC have placed significant emphasis on developing digital and new media companies
working in app and software development, animation, digital effects, and so on. To that end, they
have recorded some significant success, especially the support and promotion given to Les'
Copaque Production (bought by Disney in December 2014) who developed the Upin & Ipin
animation series. Another successful MSC-status company was Cyberjaya based subsidiary of the
Californian effects company Rhythm & Hues who employ over 150 artists and others. Rhythm &
Hues went on to win an Oscar for their work on The Life of Pi (2012) which included work from the
Malaysian team.

Yet these strategies have their problems which remain quite fundamental including the availability
of creative talent, long-term viability, and broader eco-system. For example, just before Rhythm &
Hues won the Oscar, the US-based company went into administration, bankrupted by increased
cost pressures despite the company’s outsourcing of labour to its offices in Malaysia, Taiwan, and
India. Luckily for the Malaysia office, the local CEO was able to acquire the company, renaming it as
Tau Films, and to keep the business operating. Yet it shows how tenuous the MSC strategy can be
if it involves foreign companies opening an office to take advantage of the cheaper labour and
operating costs. As many analysts have noted with out-sourcing regimes in general, a company
may just as easily move to another country or jurisdiction if it feels the operating costs and benefits
are more to its favour.

Similarly, the question of creativity itself is problematic here if the Malaysian subsidiary of a
California-based company is used to outsource technical tasks from head office in California. This
means that the major decision making still occurs in the US. Malaysian artists working on the film
may be highly skilled, and solving technical problems, for example how to texture the tiger’s fur for
The Life of Pi, but this is a different role and process compared to the decisions made in
consultation with the film production company. Animation and effects work is celebrated
domestically as a success story of creativity, and looks to be creative because of the use of
computers and new media, but the actual creativity involved and the relationship between
Malaysian subsidiary and its US parent company needs to be interrogated.

In part the emphasis on digital can be seen as not only embracing new technologies and new
opportunities, but escaping the structures and limitations of legacy cultural industries such as film
and television. Policymakers, businesses and entrepreneurs are able to start afresh without having
to deal with established players and agencies such as ruling party owned production company.

According to the repot, only 304 of the 399 companies are listed as active.

Media Prima who dominate in the television space or the national film agency FINAS. Moreover
digital is a new space that offers more global opportunities, and less encumbered by many of the
content problems that film and television have to deal with such as language. Computer games or
video effects can be made ‘culturally odourless’ (Iwabuchi, 2002). For example, Piktochart
(http://piktochart.com/) and MyTeksi (http://web.myteksi.com/#/) also known as GrabTaxi, are
both Malaysian born products but nothing from their design, content and function betray their
Malaysian origins. When products are culturally specific their market is often limited, as is the case
of Upin & Ipin which has only found export markets in Indonesia.

Following the DIKN in 2009, more programmes were introduced targeting growth and development
in the creative industries. These included the RM200 million Creative Industry Fund introduced in
2010 for individuals and companies, especially those engaged in marketing their products in both
the local and global markets. The local animation industry due to its digital content and its potential
for to reach worldwide, was given priority for the funding. From 2011 to 2014, MCMC administered
the Creative Industry Development Fund (CIDF) allocating RM100 million for development of
content for TV, mobile and internet. When the CIDF was ended in June 2014, a total of 44 projects
had been funded, and 39 had been launched (Malaysian Communications and Multimedia
Commission, 2014).

In the 2012 Budget, the Prime Minister of Malaysia announced another RM 200 million for the
development of the creative industry. The initiative involved setting up MyCreative Ventures, a
government investment arm, to administer loans to creative industry businesses following the DIKN
schema. Whereas banks are typically reluctant to provide loans to non-traditional businesses,
MyCreative Ventures is designed to support creative industries businesses who may have a different
cash flow and financial plan compared to normal bricks-and-mortar businesses. In February 2014,
MyCreative Ventures announced investments totaling RM 21 million in 15 businesses (MyCreative
Ventures, 2014). These included a number of fashion houses/designers, music, film, and crafts
businesses.

Later in 2012, the government through PEMANDU and FINAS implemented a program called the
Creative Industry Lifelong Learning Programme (CILLP) under the purview of the Economic
Transformation Programme (ETP). In part its rationale states that “although there appears to be
enough talent to meet the demand, the industry has however expressed serious concern over the
quality and skills of talent pool” (http://cill.my/). Rather than a government agency, CCIG (Creative
Content Industry Guide) an independent NGO organization registered as the Registrar of Societies
Malaysia in the year 2011, was chosen to lead the initiative. CCIG aims to increase relevant skills for
creative content practitioners, inspired by the “lifelong learning” principle that aimed to improve
knowledge, skills and competence within personal, civic, social perspectives. There are four
schemes in the program, namely the up-skilling and re-skilling scheme, internship scheme,
attachment scheme, and creative skills certifications. The field of study in the schemes mostly
include of producing and directing, scripting and screen adaption, animation, games development,visual and special effects, sound effects and production support services. The scheme includes a series of short courses and workshops. Successful applicants must work in the Creative Multimedia Industry for a maximum period of three years.

Also in 2012, the Creative Content Association Malaysia (CCAM) was established under PEMANDU ETP.

The CCAM aims to act as a forum for creative industry players to network and come together,
and for “promoting and exporting local content and creative services to overseas markets and
international broadcasters”. CCAM is headed by Mohd Mahyidin Mustakim CEO of Straits Films Sdn
Bhd, and former head of FINAS and Pesona Pictures. Its board members includes people Astro
(Khairul Anwar Salleh, VP, Malay Language Business), and Media Prima (COO Kamal Khalid) and an Advisory Panel comprising FINAS, RTM, MDeC and ETP. The establishment-bias of its organisational structure and its embeddedness in existing government agencies (FINAS for example) puts into doubt its ability to live up to its industry mandate or represent smaller, independent players in the creative industries. Whether it can serve the interests of the creative industries as a whole, or
merely the interests of its large members (Media Prima, Astro, etc), remains to be seen.

In the five years since the DIKN, a number of programmes and initiatives have been implemented
to develop and grow the creative industries through funding or on skills development. There seems
to be significant duplication, especially in the funding programmes and as researchers we have
struggled to find detailed information about who has been receiving their funds and whether the
funding has been well-used, raising questions of transparency (“Najib not doing,” 2013). In Budget
2015 another RM100 million was allocated for the Dana Industri Kandungan Digital (Digital Industry
Fund) to be administered by the MCMM (“Bujet 2015,” 2014). Despite over RM600 million being
budgeted for the creative industries, information remains scarce about its effectiveness. Creative
industries policy should not just fund productions or companies as this is typically short-term and
unsustainable. So far, little attention has been given to the structures, eco-systems, and broader
concerns that those in the creative industries might have. These would be more fundamental and
structural issues.

FINAS and the Film Industry

Whilst the emphasis has been on digital media, the film industry is one of the key industries in any
creative industries policy constellation. FINAS was established in 1981 to support and develop the
film industry, especially in taking Malaysian productions overseas (Perbadanan Kemajuan Filem
Nasional Malaysia [FINAS], 2014). FINAS operates a number of support initiatives including a 30%
Entertainment Tax Rebate for local films, since 2013 Film-in-Malaysia Incentive (FIMI) which offers
a 30% cash rebate to foreign productions, and some funding for feature film production. Before
FIMI, Malaysia had already been used as a production location including for Anna and the King
(1999) starring Chow Yun-Fat and Jodie Foster, Police Story 3 (2011) starring Jackie Chan, and
Entrapment (1999) starring Sean Connery and Catherine Zeta-Jones. With the completion of
Pinewood Studios Iskandar in Johor state in 2010, it is hoped more foreign productions will utilise

the production facilities and sound stages and the 30% cash rebate (Film-in-Malaysia Incentive
2013). Blackhat (2015) is the first foreign film made in Malaysia since FIIMI was introduced in 2013.
Recent productions that have used the Pinewood Iskandar facilities include 10 episodes of the
Netflix series Marco Polo (2014) and in 2015 the RM50 million (USD15 million) Chinese production
Alien City (“Hollywood film,” 2014). Although it must be noted that they are only partially produced
in Malaysia.

At the same time, FINAS has been marred in controversy due an overtly political role it often takes.
This was most clearly seen in its backing for the film Tanda Putera (2013), a film that dramatised
events surrounding the 1969 Race Riots that remain a sensitive and powerful topic in Malaysian
politics and history. Directed by Shuhaimi Baba, the brother in law of FINAS director Raja Rozaimie,
Tanda Putera courted controversy for its portrayal of ethnic Chinese and the opposition party the
DAP as instigators and perpetrators of the riots. The film was also expensive, costing RM 4,700,000
where average feature film production is half that. The film was banned in Penang, a state held by
the opposition, and played to largely empty cinemas in other states, taking only RM 930,000 at the
box-office, despite government directives for civil servants to support the film. As a highly
contentious and divisive film, FINAS not only endorsed this film and its message but funded it,
raising suspicions that FINAS was playing an ideological role in supporting pro-government history.
Local ethnic Chinese filmmakers have also complained about FINAS not giving rebates to their films.

Profitable local films are eligible for a 30% Entertainment Tax rebate, but until 2010 the rebate was
only available for films with 60% of dialogue in Bahasa Malaysia. The filmmakers behind the
successful Ice Kacang Puppy Love (2010) challenged what they perceived as discrimination because
their film was not in Bahasa Malaysia, despite being a Malaysian film. Films made in minority
languages (Cantonese, Hokkien, Tamil) or indeed English would not qualify for the rebate. Under
pressure from protest and the local media, FINAS changed the criteria so that a film could be
considered “local” and thus qualify for the rebate if the film was subtitled in Bahasa Malaysia, at
least half the film was produced in Malaysia, and at least 51% of the movie rights were owned by
Malaysians. Whilst it is understandable that FINAS would want to support the use of the national
language in film, the way in which the rebate was applied was seen as discriminatory and unfair,
rather than supportive. It was only through pressure from filmmakers and the media that this policy
was changed, and not from any desire to align FINAS policies with the economic agenda of DIKN.
More recently in November 2014, around 3000 film and television workers staged a large rally
protesting work conditions in the film and television industries and the inaction of FINAS in
supporting them (Barker, 2014). Driven by prominent directors Jurey Latiff and Othman Hafsham
and actor Gibran Agi, Switch Off began campaigning for greater worker protections, higher pay, a
unified Creative Content Industry Act and a One Stop Centre to better regulate and supervise the
industry (Sia, 2014). What was most telling about the protest was the frustration expressed towards
FINAS who seen to be not doing their job as the agency responsible for promoting, supporting and
regulating the film and TV industries. It had reached a point where crews and workers felt it necessary to go public with their grievances. Some headway was made when FINAS agreed to
discuss establishing a Creative Content Industry Act and Creative Industry Consultative Council.
What the case of FINAS and the film industry overall shows is that legacy government agencies are
encumbered by a perceived political and ideological role, and an inability to adapt to the demands
and realities of a rapidly changing and globalising creative industry. Whereas the DIKN emphasises
the economic potential of the creative industries, agencies such as FINAS seem slow to adapt to
their demands and conditions, and unable to approach film policy in economic, rather than
ideological or political terms. Adapting to the realities of digital production and online distribution
also challenge ways of working and regulation, especially by FINAS which operated during the film
and broadcast eras of the 1980s and 1990s. Similarly, promoting the creative industries is not just
about promotional efforts but also ensuring the conditions of work and labour are fair and in line
with cost of living expectations, as well as labour laws.

Conclusion

The Malaysian government has set itself the ambitious target of becoming a developed nation by
2020 as outlined in Wawasan 2020. Much of the emphasis in Wawasan 2020 is on economic factors
- such as GDP - but becoming developed also entails a range of other indicators. This would include
having a strong and vibrant creative and cultural sector, supported by world class institutions,
support services and facilities, and a supportive policy environment. Whilst the Malaysian
government has begun to articulate a creative industries policy as seen in the DIKN and in various
programmes and initiatives under the MCMM and PEMANDU, it remains the case that the creative
space is still very fragile and contentious, especially considering the experiences in the film industry
which is really an indicator industry. As of Budget 2014, it appears that the DIKN has disappeared
altogether from the Malaysian government’s policy platforms (“Najib not doing,” 2013).

One thread that emerges from the Creative Industries direction adopted by the Malaysian
government over the past decade is the emphasis on the Creative Industries as a technical and
economic, rather than a social or cultural problem. Significant emphasis has been placed on new
and digital technologies through the establishment on the MSC and MDeC in the 1990s, and this
has continued today in the support given to app and software developers, the MSC status
companies in the Creative Multimedia Cluster, and to digital effects and animation. So far, there
seems to be little emphasis given to addressing possible problems in how creative industries are
structured, regulated, or operate and to broader questions about the educational system or urban
planning. The emphasis has also been on mega showcase projects such as Cyberjaya and Pinewood Iskandar, rather than ecosystem and support structure development. Requests by local filmmakers for a dedicated art cinema to screen local productions has fallen on deaf ears. An art cinema might be economically unviable, but the lack of community voice in investment and decision making is telling.

Finally, to return to the vision of Wawasan 2020, the other problem clearly remains domestic
politics and the political environment which continues to manifest forms of censorship,
discrimination, and less than free markets. Given that the creative industries that produce content
rely on the ability to create without fear of prosecution or censure, Malaysia remains fraught by
forms of censorship, easy sedition, and libel. Moreover, the traditional media remains largely illiberal
and owned by ruling party-linked players, who offer little space for challenging or daring work. Of
course, Malaysia may simply sell content to other illiberal countries, but this may not bode well for
the long term, especially given the significant braindrain currently occurring. For Malaysian creative
industries policy to go forward, there needs to be much greater emphasis on the fundamentals.

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SOURCE: Creative_Industries_Policy_in_Malaysia
Ref LINK:Development Issues for the Creative Economy in Malaysia