Penang, a gazelle or lion?
Three-time Pulitzer Prize winner Thomas Friedman recounted a story about gazelle and lion in his best-selling book, The World Is Flat:
“Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle: when the sun comes up, you’d better be running.”
Friedman was writing in the early 2000s, describing the rising competitiveness in a globalising world.
The inclusion of China into the World Trade Organization in 2001 has significantly reconfigured the global supply chain and redirected the flow of international investments.
The global economic shift has severely affected Penang, with the number of multinational corporations reduced from 63 firms in 1994 to 23 by 2004, with employment plunged by 69 per cent.[1]
In 2001 alone, more than 12,000 high-tech jobs disappeared from Penang.[2]
The change of the state government in 2008 has set Penang on a ten-year recovery phase, culminated in the historic high receipt of manufacturing investments of RM16.9 billion in 2019.[3]
Penang has also emerged consecutively as the top exporting state in the country in 2019 (RM284 billion) and 2020 (RM310 billion).[4]
Nonetheless, every morning, the gazelle and lion have to outrun each other. China will not cease to be a formidable competitor while Malaysia’s southeast Asian neighbours are rapidly joining the ranks.
An obvious example is Vietnam, listed as the eighth best country for investment in 2019, while Malaysia lags behind at the thirteenth place.[5] The World Bank’s Human Capital Index 2020 reported that Vietnam has surpassed Malaysia by 24 positions.[6]
Besides investment incentives and human capital, the availability of vast undeveloped land in neighbouring countries is an advantage over Penang.
Penang is the second smallest state in Malaysia, with more than 50 per cent of the island comprising hilly terrains – unfit for industrial expansion. The George Town heritage zone will not be flattened for industrialisation.
That’s why out of the ten existing industrial parks in the state, only one at the island (Bayan Lepas free industrial zone) with the other nine located at the mainland (Mak Mandin, Perai, Seberang Jaya, Bukit Tengah, Bukit Minyak, Penang Science Park, Penang Science Park North, Batu Kawan Industrial Park 1 and Batu Kawan Industrial Park 2).[7]
The 1,173ha of industrial land allocated in Batu Kawan was left only with 80ha in 2019.[8] Critics of PSR such as Penang Forum’s Khoo Salma who repetitively say there is plenty of room for industrial expansion at Seberang Perai are either misinformed or ignorant.[9]
With the rising regional competitiveness and the lack of strategic land to attract investors, will Penang return into the dark period of the early 2000s?
Given the geographical constraint, it is only logical for the land-strapped state to embark on the Penang South Reclamation (PSR) project, reclaiming new land bank for industrial, commercial, and residential development.
This strategy has proven feasible for Penang, with 1,120 acres of land reclaimed for industrial expansion and other development along the coast from the Penang Bridge to Batu Maung since the 1970s.[10]
Foreign investments have generated more than 380,000 jobs in Penang over the past four decades, making up almost half of the state’s labour force.[11] The PSR project is estimated to create more than 300,000 new job opportunities in the following decades to come.
The criticism of the PSR project as a threat to the environment is misguided. There are fancy land reclamation projects for the rich and wealthy, but there are also land reclamation projects for a state’s survival. PSR is in the latter category.
In the same way, there is a difference between mining natural resources to build diesel engines and mining them to manufacture solar panels. Both have environmental impact, but let’s not be misguided by seeing them in the same category.
Development through strategic land reclamation for survival is not only evident in Penang’s own history but also seen in the Netherlands, Denmark, Hong Kong, and Singapore.
In the end, it doesn’t matter whether Penang is a gazelle or lion: when the sun comes up, Penang better be running.
References
[1]Kok, Onn Ting. (2016). How Does The Rise of China Affect Malaysia's Electronic and Electrical Sector? PhD thesis submitted to the University of East Anglia, 2016. Retrieved from https://ueaeprints.uea.ac.uk/id/eprint/59625/
[2]https://www.bloomberg.com/news/articles/2001-10-21/has-penang-lost-its-pizzazz
[3https://www.buletinmutiara.com/penang-hits-record-high-investments/
[4]https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=488&bul_id=eG1DdElEMDhXUFdvK3RCWHd0b2dvQT09&menu_id=azJjRWpYL0VBYU90TVhpclByWjdMQT09
[5]https://www.malaysiakini.com/news/492507
[6]World Bank Group. (2020). The Human Capital Index 2020 Update: Human Capital in the Time of COVID-19. World Bank. Retrieved from https://openknowledge.worldbank.org/handle/10986/34432
[7]https://investpenang.gov.my/penang-strives-to-drive-industry-forward/
[8]https://www.freemalaysiatoday.com/category/nation/2019/05/02/with-land-for-industries-running-out-we-sorely-need-3-island-project-says-chow/
[9]https://www.nst.com.my/opinion/letters/2021/05/689811/penang-south-reclamation-who-does-it-serve
[10]https://www.buletinmutiara.com/linear-waterfront-pdc-to-call-for-proposals/
[11]Mahbar, Zabidi. (16 July 2019). Malaysian Investment Development Authority's Deputy Chief Executive Officer II's welcoming speech at Penang Domestic Investment Seminar, 16 July 2019, at Olive Tree Hotel, Penang. Retrieved from https://www.mida.gov.my/wp-content/uploads/2020/07/20190717092147_Welcoming-Speech_Penang-Investment-Seminar-2019Final-1.pdf
