For Malaysia, Can One 'National Card' Do It All?
International Herald Tribune
October 7, 1997
Thomas Fuller 

If the Malaysian government has its way, every person over 12 years old in this country of 20 million will soon have a piece of silicon in his pocket.

Bidding is under way for a project that will produce the ultimate "national card" — a card with identification, driver's license, medical information and immigration status all crammed onto one computer chip. The card will also feature an electronic purse, replacing cash for small purchases.

Similar plans for national cards exist in other countries — Singapore is working on a national card project, and South Korea is considering using chips in driver's licenses.

But the people involved in Malaysia's one-citizen, one-chip project say it is the most ambitious plan by any country to combine government services on one card.

Planners bill the project — part of the country's drive into the global multimedia industry — as a practical way to make government more efficient. The immigration portion of the chip will speed up border formalities, they say, and the health card will store medical information to improve diagnosis and emergency care. The electronic purse will eliminate the need for cash when buying things like a newspaper or a cup of coffee.

The project, estimated to cost at least $800 million to launch, is being pushed by Prime Minister Mahathir bin Mohamad, who at age 71 has his own World Wide Web page (http://www.smpke.jpm.my/jaring/pm/pm.html).

For years, officials in Malaysia — where citizens over age 12 already carry a paper national identity card — have been studying plans to streamline and harmonize government services, and now the effort seems embodied in the card project. The plan will, for example, require the police, doctors and newsstand vendors to have compatible chip-reading equipment, but each would have the ability to access only certain portions of the chip. The police will be able to store such data as traffic infractions on the card, and a newspaper vendor will be able to debit the card for the cost of a magazine.

The project, if successful, would offer Malaysia the opportunity to export the system to other countries. "It's just going to put Malaysia so far ahead of the other countries that they're going to broker that into an intellectual-services industry," said Bob Hepple a smart-card specialist at Visa International, one of the bidders in the project.

But given the scope of the plan, and the country's current financial situation, the "if" in the project looms large.

"Politely, I would say it's going to be a challenge," said Alex Tan of Hypercom International, another company bidding for a role in the project.

Tests are scheduled to begin next year, and residents of metropolitan Kuala Lumpur are due to be issued their cards before 2000.

But already the card's planners have had to climb down from initial plans to include credit and debit card facilities in the first phase of the project, which would have created what one industry analyst called a "Chase Manhattan driver's license."

Kuala Lumpur now plans to follow what is euphemistically called a "two-card approach." The government card would eventually be merged with a national payment card — a plan that skeptics say may never happen.

Of more immediate concern to planners is the security of the card. Mr. Hepple of Visa offered this scenario: A person parks his car in the middle of Kuala Lumpur and pays the parking fee with the electronic purse function of his card.

"Are people going to be comfortable that their name and address are available to that parking meter?" Mr. Hepple asked. "Is that parking meter going to break the law, decide that, 'O.K., this guy is obviously rich because he has a car. And he's not at home, so we can go and burgle his house?"'

Chip designers and card manufacturers say there is always a technical answer to security concerns. "Data are put in separate compartments and guarded by secret keys," said Raphael Auphan, general manager in Malaysia for Gemplus, a leading smart-card company based in France. "Only certain devices can access the different compartments."

But experts say they also wonder whether putting that much data on one piece of silicon is a good idea.

"This would never go over in Germany or the U.S. or the Scandinavian countries," said a Malaysian official involved in the project. "In Malaysia, it's different. The minute we're born we already have a number. That's where the cultural differences come into play."

Even with the Western countries seemingly out of the picture, the official said he was little concerned about room for growth outside of Malaysia, noting that expansion of the card system into the nine-member Association of South East Asian Nations, or ASEAN, might be the next step.

"We are thinking about whether we should have an ASEAN-wide standard so that the card that is issued in Malaysia or Singapore or Indonesia can be used region-wide," the official said.

"But we have to prove that it can work first in Malaysia."

Copyright © 2006 the International Herald Tribune