Prime Minister Anwar Ibrahim has issued a one-month deadline to the Chief Secretary to the Government and all heads of government departments to produce a study on the impact of artificial intelligence (AI) on public sector productivity.
In his speech at the Prime Minister’s Department monthly assembly, Anwar stated that the government has allocated billions of ringgit for digital transformation programmes, including AI, but remains concerned about the potential for an “AI productivity paradox.”
“We do not want to fall into what is known as the ‘trough of disillusionment,’ where assumptions made with substantial funding for the entire digital transformation and AI programme, which amounts to tens of billions of ringgit over the next five years, fail to deliver expected results,” he said.
Anwar cited international studies, which suggest that the adoption of digital technology and AI does not automatically guarantee improved outcomes or productivity and can, in some cases, even have the opposite effect.
“Our goal in implementing digital transformation with AI is to increase productivity,” he said. “However, past experiences show that not all technological transitions deliver the expected results. Many other major corporations have encountered the AI productivity paradox.”
The Prime Minister stressed the need for substantial funds to yield meaningful results.
“Billions are spent to ensure productivity, with transparency, reduced bureaucratic red tape, and the elimination of corruption and commission practices as top priorities,” he said.
Anwar urged the government’s leadership to act quickly.
“I want the Chief Secretary and all government department heads to address this issue and submit their reports within two weeks to a month. We must not repeat past mistakes,” he said.
Anwar also reminded that the substantial funds spent on digital transformation should not end in failure due to weak management, lack of transparency or insufficient monitoring. He said good governance, system integration and outcome evaluation must be prioritised to ensure the country does not repeat past errors that ultimately harm both the government and the public.
