When you have a Chief Minister whose number one focus is playing politics and fighting police, this is what happens. Written by Calvin Sankaran --- When Penang rocketed to the No 1 position investment ranking among the Malaysian states in 2010 and 2011, there was much elation and optimism. With the ushering in of the new administration under Chief Minister Lim Guan Eng in 2008, expectations were high that it would herald a new era of prosperity and development. Penangites were convinced the state would finally catch up with its more successful rivals Singapore and Hong Kong. However what happened was the exact opposite – the state’s fortunes taking a drastic plunge with its future looking increasingly bleak and uncertain. Penang’s investment ranking also has fallen off the cliff with the state desperately struggling to maintain its attractiveness and competitiveness even among its fellow Malaysian states. While other states have grown by exponentially, Penang has bucked this trend and underperformed badly. Worryingly the state leadership looks unfocused, bereft of ideas or concrete plan to save the state. 2012 had been a truly bad year for Penang as far as investment concerned. It saw a shocking and unprecedented 72% drop in investment amount received. The state also tumbled from No 1 to a lowly No 6 position in the ranking. Only domestic investment into the state’s over-inflated housing sector kept Penang from dropping to the very bottom of the ranking table. As such Penangites were naturally hoping 2013 would see the state shaking off its poor performance and recovers its rightful place – at the top of the investment ranking. But again Penang people were disappointed. Despite the nation receiving the highest amount of investment ever in 2013, Penang’s performance was a huge disappointment. The state performed poorly and finished a distant No 4, barely edging out Sabah. It received RM3.9 billion in investment, a puny amount compared to Johor (RM14.4 billion), Selangor (RM9.8 billion) and Sarawak (RM8.3 billion). When we compare 2013 investment with 2010 data the result is shocking – a massive 69% drop. On the other hand, Sarawak’s and Johor’s investment performances improved by a whopping 140% and 86% respectively for the same period. Analysing the investment data further unveils even more serious strategic and long term concerns. For example, most of the investment (64%) in 2013 consisted of re-investments by existing companies, especially one particular MNC. Over-reliance on a single investor is both unwise and risky. New investments made up only 36% which puts Penang at the position No 7 for new investment received. This statistics is highly significant and a far more accurate indicator on the attractiveness as an investment destination. In this ranking Penang trailed minnows such as Kedah, Negeri Sembilan and Sabah. Apart from these hard statistics, anecdotal evidence, personal observations and feedback from industry in Penang also support the fact the manufacturing industry is in a state of steep downward trajectory. This can be seen from a few key trends that had been shaping up in the state in the last few years. First, there has been an increase in retrenchments, scaling down of operations and even plant closures. Despite CM’s statement about Penang having a shortage of workers, in reality these jobs are mostly low-paying and low-value added positions that no Malaysians would be interested in. Secondly, Penang is no longer the magnet that attracts top tier high tech companies to invest in the state. The fact that the Top 5 investments in 2013 for Penang featured two juice and candies factories! Thirdly, high-paying technical and management jobs creation has completely dried up. This has led to many high-calibre senior professionals and fresh graduates moving to other destinations such as Kedah, KL, Johor or even Singapore. In fact ‘brain drain’ is alive and well in Penang today. --- freemalaysiatoday/category/opinion/2014/04/22/losing-its-mojo-penangs-fading-fortunes/
Posted on: Fri, 12 Sep 2014 05:37:50 +0000
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