INTEGRATION EXERCISE: PRESENTATION BY BIMP-EAGA & IMT-GT 22 OCTOBER 2016 GOOD PRACTICES q Collaborative engagement with stakeholders best option to pursue q Single national authority for SEZs q An autonomous authority (at park level) that collects assessments and ploughs-back to the development q Accessibility – Located near ports and cities to ensure connectivity and livability q Favourable regulatory environment q Competitive advantage - Ability to continuously evolve CHALLENGES

• Real-estate game impairs delivery of proper clustering strategies. • Uncoordinated private sector endeavour leads to duplication and wastage. Land Use • Lack of strategic positioning dilutes impact of the development. • Lack of available government land.

• Stages of development. • Institutional requirements (formalization of international behavioural rule, centralization – governance of collective Disparities activities, delegation – autonomy) • Rules and regulations

• Underdeveloped areas (not seen as attractive) Investors’ • Non-commercial risks to be addressed • Extra resources required to prepare conducive Interest environment and attract investors BROAD STRATEGIES AND ACTIONS

Third world economies are often characterised by market imperfections and barriers. They face high transaction cost because of a lack of infrastructure and weak institutions.

With the Industrial potential to Attract FDI parks to enhance accelerate competitive through trade economic advantages, development – industrial and attract parks are able investment, to generate investment fostering jobs and a technological larger tax learning and base. innovation.

To kick start investments, one way forward would be to forge partnerships with established SEZ experts. PROPOSED SEZ: & PROPOSED SEZ: MALAYSIA & THAILAND PROPOSED SEZ: MALAYSIA & ( – )

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A TEBEDU-ENTIKONG SPECIAL ECONOMIC ZONE A B B A LEGEND Transport AConnectivity B Industrial Activity 7 Spinoff TYPES OF SEZ – CROSS-BORDER ECONOMIC ZONE

Due to their respective proximities to Port, Padang Besar 1 transportation hub and upcoming Perlis Inland Port initiative

These will be a transnational economic zone at the border area, 2 supported by special policies on finance, taxation, investment incentives, trade and customs regulations.

It is a location in which the flows of personnel, goods, technology and other 3 factors of production are concentrated and interactive. RATIONALE q Generates spillover effects for the economic development of neighbouring areas. These come in the form skilled labour, improved infrastructure, economies of scale and other complimentary economic engagements. q Creates platform for participation of local firms to interact and engage with investors q Solves issues of insufficient trans-boundary public goods q Facilitates formalization of international behavioural rules q Alignment with national strategies and sub-regional visions: ü IMT-GT Vision 2036 (An integrated, innovative, inclusive and sustainable sub-region by 2036) ü BIMP-EAGA Vision 2025 (Resilient, inclusive, sustainable and economically competitive (RISE) BIMP-EAGA to narrow development gap) ENABLING CONDITIONS q Trade q FDI q Monetary and fiscal policies q International GVC expansions q International demand conditions q Supporting industries and institutions q Transport and logistics q Skilled labour q Export infrastructure q Infrastructure q One stop shop q Logistics services q Customs facilitation q Marketing services 10 q Incentives

TARGETING Technology and Sustainability innovation Activity Technology and Upskilling innovation Labour INSTITUTIONAL ARRANGEMENTS

• Northern Corridor Implementation Authority (NCIA) • Iskandar Regional Development Authority Public- (IRDA) Public Private Private sector sector • East Coast Economic Region Partnership driven driven Development Council Model (ECERDC)

• Sabah Economic Implementation of SEZs Development and Investment Authority (SEDIA) PPP Autonomous • Regional Corridor Development Authority (RECODA) Stakeholders Interest in the Role in the SEZs Resources they bring SEZs to the SEZs

Governments FDI, employment, Policy maker, Masterplan, infrastructure, (Federal & State) - development implementer, incentives, bilateral Malaysia, monitoring and engagement Indonesia, Thailand evaluation

Local community Improved welfare, Workforce, Workforce, local knowledge, and businesses economic activity beneficiary users

Investors ROI Bring in investments $$$$, technology and knowledge transfer Private park ROI Operator Expertise, network, $$$$ managers Official Capacity building, Neutral broker, Expertise, network, $$$$ Development financial backing financer MONITORING AND EVALUATION Sustainable Development Sustainable Development TO THE FUTURE & BEYOND