Project X Malaysia
Francisco Raya
The BIS Innovation Hub Singapore Centre and partners today announced the successful connection of the test versions of three established IPS using the Nexus model and outlined the next phase of the project to work on the real-world potential of a multilateral network that could be scaled up across more countries.
The year-long collaboration included the Bank of Italy, Central Bank of Malaysia (BNM) and Monetary Authority of Singapore (MAS), plus the payment systems operators PayNet and Banking Computer Services (BCS). Test payments were initiated using only the mobile phone numbers or the recipients' company registration numbers via the Eurosystem's TARGET Instant Payment Settlement (TIPS), Malaysia's Real-time Retail Payments Platform (RPP) and Singapore's Fast and Secure Transfers (FAST) payment system.
The Nexus report, published today, provides details on the early experiments and technical specifications for the multilateral interlinking of payment systems. The success of the experiment paves the way for the BIS Innovation Hub Singapore Centre to explore the practical applications of a distributed multilateral network.
Nexus aims to support the G20 priorities of improving the cost, speed, access and transparency of cross-border payments by connecting domestic IPS across multiple countries through a standardised and multilateral approach. It is designed to accommodate differences between IPS, rather than trying to homogenise them.
I am thrilled at our success in connecting three national payment systems and the potential this indicates for Nexus. It paves the way for further development, and we look forward to collaborating with our partner central banks on the next phase of the project.
Looking ahead, the BIS and the five central banks envisage that Nexus could eventually be implemented globally. To achieve this, they will aim to establish a Global Advisory Panel of central banks and payment system operators to advise on the project's development beyond the Southeast Asian region. The Bank of Italy and the European Central Bank will be invited to join this panel.
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The MY Voice project will combat forced labor and child labor in the garment and palm oil industries in Malaysia in three main ways: 1) building the capacity of workers and civil society organizations to advocate for labor rights; 2) elevating the role of worker voice in private sector social compliance systems in these industries; and 3) increasing access to remedies for workers exploited for forced labor or child labor.
In such environments, workers often lack the means to voice their concerns and access remedy for labor violations. Migrant workers in particular may face barriers to participating in organized labor or other forms of collective worker voice. In addition, civil society organizations that advocate for the rights of these workers often lack sufficient capacity and coordination to address the scale of the problem. Despite efforts by various actors, there remains a need for more coordinated, worker-informed, multi-stakeholder action to address forced labor and child labor in Malaysia.
Implementing in Peninsular Malaysia and Sabah, Malaysia, this project will deliver training modules and workshops to build the capacity of trade unions, civil society organizations, migrant worker community leaders, government labor inspectors, and recruitment agencies. These sessions will aim to increase their understanding of the root causes of forced labor and child labor and encourage them to take action to prevent, identify, and remediate cases of such labor rights abuses in the palm oil and garment sectors.
The project will create two multi-stakeholder consultative platforms (for the palm oil industry and the garment industry, respectively) to build consensus on solutions for better labor management practices, policies, enforcement, and access to justice for affected workers. These platforms will include representatives from government agencies, think tanks, research institutions, civil society organizations and NGOs, trade unions, and industry bodies.
Malaysia, located in Southeast Asia, has a diverse population of 33 million people, comprising a multi-religious society with three primary ethnic and linguistic groups: Malay, Chinese, and Indians. Since gaining independence in 1957, Malaysia has maintained political stability and witnessed rapid economic growth, positioning itself to achieve high-income status by 2024. The country's promising economic outlook is underpinned by its well-developed infrastructure, rich natural resources including oil, gas, forestry, and agriculture, alongside globally competitive manufacturing and services sectors. Malaysia is also home to some of the world's most significant remaining mega-diverse tropical forests, such as the Malaysian Forest Spine in Peninsular Malaysia and the Heart of Borneo. These vital global ecosystems are inhabited by various indigenous communities. As one of the 10 member countries of the Association of Southeast Asian Nations (ASEAN), Malaysia plays a key role in regional cooperation and development.
Malaysia stands as a pivotal strategic partner for the European Union (EU), with bilateral relations based on mutual interests and shared values, including human rights, gender equality and women's empowerment, labour standards, democracy, the environment, and multilateralism.
On 14 December 2022, Malaysia and the European Union formalised their relationship by signing the Malaysia-EU Comprehensive Partnership and Cooperation Agreement. This agreement underscores a mutual dedication to advancing the 2030 Agenda for Sustainable Development, guided by key international and EU policy frameworks, notably the Paris Agreement, the Global Gateway Strategy, and the Indo-Pacific Strategy. The collaboration focuses on priority areas such as connectivity, environment and climate change, trade, as well as human rights and security.
Additionally, Malaysia benefits from various multi-country EU programmes and engages in regional cooperation with the EU as a member of the Association of Southeast Asian Nations (ASEAN). During the EU-ASEAN summit in December 2022, the EU unveiled plans for a Team Europe investment of approximately EUR 10 billion in South-East Asia. Key initiatives include two Global Gateway flagships with ASEAN: the Green Team Europe Initiatives and the Team Europe Initiative on Sustainable Connectivity.
The EU-Malaysia Cooperation Facility serves as a comprehensive toolkit designed to enhance EU-Malaysia relations. It facilitates policy dialogues, outreach activities, and strategic partnerships, aiming to foster a deeper understanding and visibility of the EU's global role. This initiative seeks to align EU and Malaysian interests, principles, policies, and values more closely, particularly in areas such as human rights and gender equality, with a special emphasis on the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs).
In alignment with the Global Gateway strategy, the EU is backing a project focused on the development of the Port of Lumut, known as the LUMIC project. This initiative is carried out by the economic development agency of the state of Perak, Malaysia (PKNPk), in collaboration with the Port of Antwerp-Bruges International (POAB International, a fully owned subsidiary of the Port of Antwerp-Bruges in Belgium).
Malaysia is recognised as one of the countries within the ASEAN region blessed with mega-biodiversity, standing as one of three nations identified as a biodiversity hotspot. This wealth of natural resources plays a crucial role in supporting the livelihoods of millions within the country. In response, Malaysia has implemented policies aimed at conserving its rich biodiversity and tackling global warming, which poses a significant threat to its natural heritage.
EU collaboration with Malaysia on forestry and land management is strategically formulated in close partnership at the state level, ensuring alignment with key EU regulations and frameworks. Notably, this includes the EU Deforestation Regulation (EU DR), which covers key Malaysian agricultural commodities such as palm oil, rubber, and timber. Consequently, cooperation and technical assistance programmes are being tailored to involve these commodities explicitly.
The "Reducing Deforestation and Forest Degradation through Sustainable Agricultural Value Chains and Improved Forest Governance" (SAFE) project, jointly funded with Germany and executed by GIZ, places Malaysia and Indonesia at the heart of a regional exchange platform. This initiative supports smallholders in aligning with the EU DR requirements and in adopting improved agricultural practices. Additionally, the establishment of the Joint Task Force on EU DR in August 2023, between the EU and the governments of Malaysia (and Indonesia), provides a new platform to identify practical solutions pertinent to the implementation of the EU DR. This collaboration is set to enrich future EU cooperation activities in Malaysia.
Poaching and the illegal wildlife trade significantly contribute to the decline of Malaysia's wildlife populations. Numerous species indigenous to Malaysia and the surrounding region face threats primarily from poaching, driven by both regional and international demand and trade.
To counteract this, the EU has financed an initiative designed to bolster civil society partnerships, enhancing the effectiveness of actions taken by Malaysian (and other Asian) governments to terminate the wildlife trade. The "Partners Against Wildlife Crime" project operates in Malaysia and six additional countries, including the five Mekong countries and China. Its objective is to dismantle illicit supply chains from their origins to the marketplace, targeting key species such as tigers, Asian elephants, Siamese rosewood, and freshwater turtles. In Malaysia, the project specifically focuses on the conservation of tigers, with Endau-Rompin in the State of Johor (southern Peninsula Malaysia) serving as the primary project site.
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