Pilot Studies for a New Socio-economic and Environmental Research Institute Pulau Pinang,

The Socio-economic and Environmental Research Institute (SERI) was established by the Penang State Government to supply it with solid policy recommendations and to aid its strategic planning. The think tank seeks to contribute to the building of a caring and sharing society through research approaches that are comprehensive and challenging, and conducts research into social, economic, and environmental issues. Its other core activities include the preparation and dissemination of information, and the facilitating of various programmes specially structured to help it achieve its goals.

Institute of Southeast Asian Studies Singapore

The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostra- tegic and economic environment. The Institute’s research programmes are the Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS).

ISEAS Publishing, an established academic press, has issued more than 2,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publishing works with many other academic and trade pub- lishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world. Penang Studies Series Pilot Studies for a New Penang

Edited by Ooi Kee Beng & Goh Ban Lee

Socio-economic and Environmental Research Institute Pulau Pinang, Malaysia

Institute of Southeast Asian Studies Singapore First published in Singapore in 2010 by ISEAS Publishing Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 E-mail: [email protected] Website: http://bookshop.iseas.edu.sg for distribution as an e-book and print in all countries except Malaysia.

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© 2010 Socio-economic & Environmental Research Institute (SERI)

The responsibility for facts and opinions in this publication rests exclusively with the authors and their interpretations do not necessarily reflect the views or the policy of SERI, ISEAS or their supporters. ISEAS Library Cataloguing-in-Publication Data

Pilot studies for a new Penang / edited by Ooi Kee Beng and Goh Ban Lee. Papers presented at the Penang Outlook Forum 2009 on “Restructuring and Reshap- ing Penang” held on 1-2 June 2009 in Penang, jointly organized by the Socio-economic and Environmental Research Institute (SERI) and Institute of Southeast Asian Studies (ISEAS). 1. Pulau Pinang—Economic conditions—Congresses. 2. Pulau Pinang—Economic policy—Congresses. I. Ooi, Kee Beng. II. Goh, Ban Lee. III. Socio-economic & Environmental Research Institute (Pulau Pinang) IV. Institute of Southeast Asian Studies. V. Penang Outlook Forum (2009 : Penang, Malaysia) HC445.5 Z7P4P64 2010 ISBN 978-981-4279-69-7 (soft cover) ISBN 978-981-4279-70-3 (E-Book PDF)

Cover Design, Content Format and Typeset by PM Wang Printed by Vinlin Press Sdn Bhd (25680-X) No.2, Jalan Meranti Permai 1,Meranti Permai Industrial Park, Batu 15, Jalan Puchong,47100 Puchong, Selangor Darul Ehsan.

23 57 111 129 147 175 189 vii viii xii xviii xx 1

[ CONTENTS ] [ CONTENTS III Political Masters and Master Plans Political Masters and Industrial Policy at the Sub-national Level Industrial Policy at the Sub-national Level — Francis E. Hutchinson the Sub-national Level & Francis E. Hutchinson — — Chan Chee Khoon — Goh Ban Lee — Sin I-Lin Leng Narayan, Lim Mah Hui & Ong Wooi — Suresh A Blueprint for Sustainable Development Blueprint for Sustainable Development A Islands with Similar Experiences Two — Lee Kah Choon & Chan Huan Chiang Ping Poh-Kam & Ho Yuen for Penang — Wong [ 3 ] Shallow Pockets but Close to the Action: Action: [ 3 ] Shallow Pockets but Close to the at [ 4 ] Implementing Pro-Employment Policies [ 5 ] Re-thinking Health Care and the State Question [ 6 ] Social Justice and the Penang Housing in Penang Thoughts on Private Higher Education [ 7 ] Some [ 8 ] Re-examining Penang State Finances and Governance [ Acknowledgement ] [ [ Contributors ] : [ Foreword ] by [ Foreword ] by K. Kesavapany: [ Introduction ] [ 1 ] Moving Penang from Past to Future Shift towards Innovation and its Implications Asia’s [ 2 ] Pilot Studies for a New Penang [ Epilogue]SocialDimensionsofEconomicDevelopment [ 12]EmbodyingSocialJusticeinEmploymentLegislationand [ 11 ] The Wage-Productivity Questionand Women inthe [ 10]PositioningPenangforSustainableGrowth [ 9] Tweaking theState’s DeliveryMechanism: — P. Ramasamy HR Practices the PenangStateGovernment Workforce: A LabourStatistics Approach for — Nungsari Ahmad Radhi&Hamdan Abdul Majeed — OoiKeeBeng&GohBanLee The CaseoftheMPPP — Ajit SinghJessy IV — HwaYue-Yi 251 279 275 245 223 Acknowledgement The Editors V [ ACKNOWLEDGEMENT ] ACKNOWLEDGEMENT [ The papers presented in this volume were first discussed at the con- that making in involved everyone thank to therefore wish We Thanks also to all the contributors, chairpersons and discussants to and Property, BSG sponsor, main the to goes gratitude Heartfelt Last and certainly not least, a special hurrah must be shouted for Penang Outlook Forum 2009, titled “Restructuring and Reshaping Pen- Reshaping and “Restructuring titled 2009, Forum Outlook Penang 2009 at the E &O Hotel in Penang. ang”, held on 1-2 June ference a success, especially the directors and the able staff of the So- cio-economic and Environmental Research Institute (SERI) of Penang and the Malaysia Study Programme at the Asian Institute of Southeast Studies (ISEAS), Singapore. of standard the improve to debate the in participation inspiring their for living in Penang, and in Malaysia. InvestPen- Corporation, Development Penang the Nasional, Khazanah ang, SERI and ISEAS for their support. project the conceptualizing for Bendera, Bukit for MP Tong, Chin Liew and for being the key person in its realization. Pilot Studies for a New Penang ment (GIWA) a GEF/UNEP funded project based at the University of University the at based project (GIWA)funded GEF/UNEPment a the economic policies task team of Global International Waters Assess also served as a member of the combined has methods task team as well as Chan Dr. level, international the At Studies. Pacific and Asia of of the editorial boards of Kajian Malaysia and the International Journal of Malaysian Manufacturers (FMM) Northern Branch. He is a member Federation the of committee policies economic the of member a also fellow with the Malaysian Institute of Economic Research (MIER) research and associate an is He Sciences. Social of School USM’s in ics econom sector public and econometrics finance, taught He Malaysia. Sains Universiti Research, Policy for Centre the at professor associate an was and Fellow SERI a is He Pennsylvania. of University the from transition. in systems health and development, and technology,environment and science in issues policy and ethical diseases, infectious re-emerging and emerging include interests research current His Malaysia. in ment Environ- of Department the and adviser), policy (health Associations Consumer Malaysian of Federation Association, Medical Malaysian SERI, Health, of Ministry the and Agency,Cooperation Japan International UNESCO, UNESCAP, Organization, Health World mission, as consultant and technical adviser to the World Bank, European Com- served has Chan Dr 2004-2005. in fellowship senior API Foundation Nippon a as teach well as Harvard, MITand at fellowships research and ing carcinoma, nasopharyngeal of epidemiology the on research doctoral his supported which fellowship Pasteur Institut an is awards University.Harvard his from Among Epidemiology in degree Science of Doctor a has and sciences, life in degrees Technologywith of tute Universiti Sains Malaysia. He graduated from the Massachusetts Insti- eevd i P.. n einl science regional in Ph.D. his received Chiang Huan Chan Dr at policy social and health of professor is Khoon Chee Chan Dr VI [ CONTRIBUTORS ] - - - Contributors - Malaysia in Planning Urban (2007). VII Non-compliance – A Neglected Agenda in Urban Governance - the for columnist a also is He Fellow. SERI a is Lee Ban Goh Dr Encik Hamdan Abdul Majeed currently heads the department Dr Francis Hutchinson is a consultant specializing in gover Kalmar Kalmar in Sweden, and has acted as economic consultant in missions involving the development of export processing zones in Kenya and Sri Lanka on behalf of the World Bank and the Asian Development Bank respectively. Sun newspaper in Malaysia, focusing on issues related to urban gov- Sci- Social of Bachelor a has He planning. urban and housing ernance, ences and Master of Social Sciences from Universiti Sains Malaysia and a Ph. D. in Urban Planning from the University of California, Los Angeles. He was an associate professor in Universiti Sains Malaysia and vice principal of Tunku Abdul Rahman College. He also served on the first National Economic Consultative Council (1989-1991) and (1989-1995). Council Municipal Island Penang the in councillor a was He was involved in projects conducted by United Nations Centre for the of Program Management Urban (UNCRD), Development Regional AsianAsia - ProductivityPacificUnited Organi Region,Nations and – are publications his Among (APO). zation (1991), (2002) and Counselling Local Councils overseeing Khazanah investment activities in the Northern Corridor. Prior to that, he was actively involved in developing new investment initiatives for Khazanah both in Malaysia and abroad. Before joining group, advisory corporate a of director founding the was he Khazanah, where he was involved extensively in debt capital markets advisory specializing in structured finance and project finance. he Priorwas to that, attached to HSBC Investment Banking as a specialist in eq- uity capital markets, covering the Malaysian equity market. He has an interest in the development of civil society in Malaysia, the political nations and Islam. He holds a degree in Eco- World Third economy of of London. nomics and Management from the University nance, public sector management, and decentralization. He holds Ph.D. in Public a Policy Administration and from the Crawford School of Economics and Government of Australian the National University. His dissertation entitled ‘Can Sub-national States be Developmental?’ looks at industrial policy at the sub-national level in Malaysia and In- Pilot Studies for a New Penang at ISEAS, Singapore. He graduated with a degree in Political Science Political in degree a with graduated He Singapore. ISEAS, at Fellow Visitinga Research formerly was He (REFSA). Advancement Social for Research heads also and Institute, Research Environmental Mr Lim Guan Eng. He is Executive Director of the Socio-economic and Minister,Penang’sChief to advisor policy also and Penang, Bendera, and ChungLingHighSchool,Penang. London. He is a alumnus of the Royal Military College Kuala Lumpur University City MAfrom an University,and Southampton from LLB an holds He 1986. Walesin & England of Bar and 1987 in Malaysia of Bar the to called being after 2004, to 1987 from practice legal vate pri- own his with lawyer practicing a was He 1997-1999. Councillor Municipal Seberang was Dato’Lee career, political his to Prior 2008. to 1999 from Constituency Jelutong the for Parliament of ber Mem- as and 2008, to 2004 from Health of Ministry the of Secretary Parliamentary as Dato’served Corporation. Lee Development Penang appointments inSingapore’s MinistryofForeign Affairs. staff key held and 1997) March - 1991 (December Geneva in Nations the in United career the to Representative Permanent as served he Service, 30-year Foreign his In 2002. to 1997 from Malaysia to sioner Commis- High Singapore’s was He Studies. Asian Southeast of tute also completedinternshipsatSERIandtheSun. has She London. in (SOAS) Studies African and Oriental of School the at exchange on semester a spent she programme, B.A. her of part inter-ethnicrelations. and policy education include As interests search re- Her Massachusetts. in College Williams at Arabic in certificate a the UniversitiesofCambridgeandSussex,respectively. from Studies Development and Sciences Political & Social in degrees lytica and Control Risks. A political scientist by training, he also holds Agency as well as political risk consultancy firms such as Oxford Ana- Aid International Australian the UNESCO, UNICEF, UNDP, Bank, policy,industrial level the for Worldpolicy social and anti-corruption, state- decentralization, capacity, state on research applied out carried has He studies. case as Karnataka and Penang of states the taking dia, Mr Liew Chin Tong is the Member of Parliament (DAP) for Bukit the of and investPenang of Director the is Choon Dato’Kah Lee Insti - Singapore’s of Director the is Kesavapany K Ambassador Yue-YiHwa Ms is studying for a B.A. in political economy and economy political in B.A. a for studying is VIII Contributors - IX Mr Lim Guan Eng is . He has a degree Dr Lim Mah Hui is a Senior SERI Fellow Fellow at and Visiting Prof Suresh Narayanan holds bachelor and master degrees in Dr Nungsari Ahmad Radhi joined Khazanah as Executive Di- and an Honours degree Asian in Studies from Australian the National University and holds an International Masters in Regional Integration Malaya. University of Asia-Europe Institute, from the in economics from Monash University, Australia, and is a qualified professional accountant. He is the Member of Parliament (DAP) for Bagan, Penang, and state assemblyman Air for Putih. He is the secre- Action Party (DAP). tary-general of the Democratic Devel- Asian the at Specialist Senior as served he that, to Prior ISEAS. Dr recovery. equity and debt sector private of field the in Bank opment Lim also has extensive banking experience in the area of investments finan- prominent in portfolios various held having loans, corporate and cial institutions within Asia the Pacific region. His distinguished con- tributions in academia cover research and lecturing positions at Uni- versiti University Malaya, Temple and Duke University in the United mort- subprime US the on focused have publications recent His States. developing economies. gage crisis as well as labour concerns in econom in Ph.D. his received and Malaya, Universiti from economics ics from Boston University. He is currently Professor ics of from Economics Boston at University. School USM’s of Social Sciences. His fields of research include indi- rect taxation, labour migration, foreign labour issues and Aal- technology and Mexico, de Colegio El at Professor Visiting a was He transfer. Harvard at Scholar Visiting a also was He Denmark. in University borg University Technical the and (Sweden) University Uppsala University, of Denmark. He has served as a consultant to several local agencies such as the National Action Economic Council (NEAC), the Ministry of Finance, the Economic Planning Unit of the Prime Minister’s De- of Institute the (PDC), Corporation Development Penang the partment, Eco- of Institute Malaysian the and (ISIS) Studies Social and Strategic nomic Research (MIER). He was a consultant to UNDP and ILO and has just completed a study for the NEAC on reducing the Malaysian dependence on foreign labour. rector, Research and Investment Strategy, in 2007. After ten years in academia, he resigned as Dean of the School of Economics at Uni- Pilot Studies for a New Penang themes in her Masters and Honours years, she published in published she years, related Honours and Masters her on in themes Working market. labour and education the in distinction social of practices middle-class Malaysian studying presently is She migration. international and transitions study-work education, higher Edinburgh whose key research interests are social mobility aspirations, and aseniorvisitingresearchfellowatISEAS. He was subsequently visiting professor at Kassel University, Germany, at Universiti Kebangsaan Malaysia until his retirement in August 2005. science political of professor was he politics, entering Before Penang. and editorforthePenangEconomicMonthly. Singapore, Newspaper,Today for columnist a is He Asia. Eastern in Timeand , WarZi’sof , Sun Art Mahathir, after Malaysia Transition: of United Nations, Badawi; lah University. His books include Kong’sCity the Hong at Social Administration and Public at of Department professor associate visiting also and Singapore of University ate professor at the Southeast Asian Studies Programme at the National a doctorate in Sinology. He is a Fellow at ISEAS, and is adjunct associ- eral years studying Practical Philosophy, he concluded his studies with University, with Public Administration being his first degree. After sev- of Management,PurdueUniversity. Development Rural book he edited was edited he book recent most the and Edge The for regularly writes also He economics. public and theory game applied organization, industrial in been have interest of areas His Associates. Innovation of Director Associate an was and Berhad Darby Sime at stint brief a had he Khazanah, joining Malaysia, Yayasan Pelajaran MARA and the National Library. Priorto Pertanian Bank of member Board a also was he organizations, tional Besides representing the Malaysian Parliament in a number of interna 1995. in Seat Parliamentary a winning before Malaysia Utara versiti is a PhD student in Sociology at the University of University the at Sociology in student PhD a is Lin I Sin Ms P.Prof. Ramasamy Dr Ooi Kee Beng’s entire tertiary education was done at Stockholm Continent and Coast and Ocean: Dynamics of Regionalism of Dynamics Ocean: and Coast and Continent March 8: Eclipsing May 13, May Eclipsing 8: March Lost in Transition: Malaysia under Abdullah; The Era (2005). He holds a PhD from the Krannert School Krannert the from PhD a holds He (2005). New Challenges Facing Poverty Eradication and Eradication Poverty Facing Challenges New The Reluctant Politician: Tun Dr Ismail and His and Ismail Dr Tun Politician: Reluctant The is currently Second Deputy Chief Minister of Minister Chief Deputy Second currently is Arrested Reform: The Undoing of Abdul- X Chinese Strategists: Beyond Strategists: Chinese Malaya’s First Year at the at YearMalaya’s First Studies in Studies - Contributors - - - - - XI the Asian and PacificMigration . Journal She and Mr Ajit Singh Jessy, Advocate and Solicitor, has over 30 years Dr Wong Poh Kam is Professor at National University of Sin- Higher Higher Education studied for an MSc in Sociological Research at the University of Man- of University the at Research Sociological in MSc an for studied National Australian the at Sociology in (Hons) BA a and (2007) chester - Sociol of Department the at worked previously She (2005). University ogy in the National University of Singapore, assisting in research on indicators in Singapore. and social migrant integration of Personnel-Industrial Relations experience. Prior to going into legal Advisor Legal and Manager Resources Human Group was he practice, of Palmco Holdings. He is ranked Industrial Relations among the Top multination and corporate leading both advising Malaysia, in Lawyers of Chairman is He clients. litigant senior representing and companies al advises which Committee, Liaison Resources Human State Penang the the State Government on labour and industrial relations issues and is also a member of the Bar Councils Industrial Court Practice Commit tee. He is a past Chairman of Malaysia Employers Federation (North- ern Region), Malaysian Institute of Personnel Management (Northern Association. Branch) and Electrical Industry Employers gapore (NUS)’s Business School and concurrently serves as Director of the NUS Entrepreneurship Centre. He also holds joint professor ship appointment at the LKY School of Public Policy and the Engi- Management Division of Technology Engineering & neering School’s (DETM). He obtained two BSc.s., an MSc. and a Ph.D. Prior to from joining NUS in 1988, MIT. he co-founded two IT companies and a consulting firm As in director Malaysia. of the NUS Entrepreneurship Centre, he spearheads entrepreneurship the education university’s and outreach programs and various university technology spin-off support programs including incubator facilities, seed funding and mentoring. He also directs the research centre’s program on technology entrepre neurship and innovation strategy. He has published in numerous in- ternational journals on high tech industries, innovation strategy/policy Journal the others, among including, entrepreneurship, technology and Entrepreneurship of Theory Business & Venturing, Practice and Jour nal of Management. Pilot Studies for a New Penang Sabah andSarawak! including states, the all repeat, I years? ten last the over states the all among least the increased incomes family Penang that know you Do ites: All that was a long time ago. We have gone backwards since then. the statethatdefinedMalaysia’s future. coming progress of Malaysia. Penang was ahead of other states. It was that was instantly recognizable abroad. Penang’s progress signaled the shop intoasmartshop. sweat a from Penang transforms that prosperity a achieve to together muscles and brains put to is today do to need we goal. What the not is Surviving enough. not is surviving But survived. have they and ries, centu two for hard worked have Penangites forward. itself pushing and youneedthepeople. you need the businessmen, you need the thinkers, you need the NGOs, at thesociallevelaswell. everyone, cannot take place only at the personal level. It has to happen for life of quality the in improvements impressive sees that progress But I am sad to say this so openly to a room full of proud Penang- Once upon a time, not long ago, Penang was already a Brand Name in Penang than more done has Malaysia in state other no Now, Progress isacollectiveundertaking. service, civil the need you politicians! And need you why That’s progress, real But for. wish people most what That’s Progress! SustainableDevelopment XII (Penang OutlookForum2009) A Blueprintfor [ FOREWORD] Speech byLimGuanEng Penang ChiefMinister - Contributors XIII Between Between 1999 and 2004, Penang family incomes grew by 2.5% Penangites have not only been losing in relative income; we have Looking ahead, it is critical to reverse the trend. That is the point And that is why we The are Penang gathered Outlook here today. We have been there before. We have had experiences with glo- That is our vision – making Penang a model for others to follow. annually, while the average annually, for the whole country was 6.6%! In 1999, our income was 85% of what people in Selangor were making. Only five years afterthat, in 2004, we are only 68% as rich as those same Valley. the Klang people in also been losing our even relatives. if Now, you do not trust statistics, you have to agree that Penang families have been sending their sons and daughters abroad, down to down the to Klang Valley, Singapore, and out into the great wide world. These young people had to leave because there was a sorry lack of opportunities for them here at home. Our talents leaked away, and one can I that past imagine the of failures the the of because is It family leakage. such every behind heartache choice for Penang Chief Minister. was elected as the surprise of this conference, and of many others like it that we are planning for the near future. Before we act, we have to discuss have things. We to plan, and we have to visualize what the future is to be; and we have to there. visualize the path we have to take to get Forum represents one further step towards creating a blueprint for the reshaping of Penang, a process already begun in many will ways. We use the ideas aired over the next two days to decide the next steps to take to bring change to Penang. These are the Penang firstBlueprint, steps towards towardsturning Penang a into an International City and State. balization for over 200 years! Penang has is there But point. the that on me with agree you resources sure am I itself. transform it needs to one thing I must stress this morning: we are not transforming Penang simply for Penang’s sake. Transforming Penang into an International trans- to strategy long-term our in step first the simply is State and City form Malaysia as a whole. We need intelligent and experienced people to realize this blueprint. This is why this Forum has brought together some smart- of Penang’s est people, sons and daughters of Penang who are based either locally Pilot Studies for a New Penang Cities may boast high-tech and Space Age infrastructure, or obscene or infrastructure, Age Space and high-tech boast may Cities International capital. human Penang’s of development the – run long good foodwithourtalentedhuman resourcesandstrongworkethic. harmony,beauty,social scenic heritage, its cultural tion, and even rich posi- logistic Penang’sunique links that approach holistic new a need are competitive in new orsunriseindustries. To get out of this trap, we dustries and on the other by high-wage innovators in rich countries who in- sunset or mature in competitive are who countries poor in petitors com- low-cost by side one on bordered trap, middle-income the so-called in been has Penang Penang. of people the for power purchasing greater to lead and income, disposable and level income median the diversification tooureconomy. en- healthy a bring and role, exports-dependent our from us free to deavor could restructuring economic An capabilities. own our reassess and models economic old rethink seriously can we that this like ments mo- during is It lining. silver a has cloud dark the But developing. and economy, itmustrestructure itseconomyaccordingly. new this in role leading a wants Penang If field. playing multi-layered gions are locked in stiff competition with one another today, creating a re- entire and Cities challenge. the to rise to ready be must Penang’seconomy economy. global the complementing and in competing be simultaneously will State and City International an of economy The tions. change in the substance of the political leadership and the state institu a with starts change Hence, State. and City International an as Penang of goal. factor our distinguishing and a practice be our must main This re- always must governance effective and efficient Clean, leadership. on certaincornerstonesbeingproperlylaid. glect and incompetence cannot hide within it. Such a structure depends ne- that so transparent is that one monitored, and regulated properly is Most importantly, this blueprint must rest solidly on a local system that or overseas, who can help us define what this new blueprint should be. The third cornerstone is definitely the most important one in the in one important most the definitely is cornerstone third The raise opportunities, employment local boost must restructuring A affectingis crisis present The developed small, and big nations all economy. the is transformation our for cornerstone second The thepolitical of andintegrity the quality is cornerstone first The XIV - Foreword - - - -

XV erate knowledge workers, Penang has launched a new ini- tiative to be the first wifi state in Malaysia where wireless rates affordable at wimax and free provided be will services in 2 years time; A civil society encompassing the triple transformation of respect equality, political achieve to transformation political democ and power people’s of supremacy rights, human for opportu- equal provides that transformation economic racy; nities and relies on the energy, expertise and enterprise of establishes that transformation ethical resources; human our Institution building as a source of growth; there is a need to respect rule of law and good governance based on CAT accountability and transparency); (competency, A sound education system that promotes a culture of ex- cellence that is relevant to the demands Emphasis naturally centers economy. on and ICT computer of industry and knowledge. facilitate To the creation of more computer lit 3. 1. 2. We must have healthy income levels in order to make their reloca their make to order in levels income healthy have must We key measures that we need to look into: recap, there are eight To material material wealth, but to be truly successful they must have one impor tant resource: a dynamic and happy people. To attract talent, Penang a be must It home. call to place enough attractive an be to seen be must York New like cities Now, live. to place great a and work, to place great and may Tokyo be expensive places to live in, but it is in those cities that human talents are allowed to thrive. That is why they continue to envi- the Penang, to blood new attract to want we If magnets. talent be environment good a be must There well. as change to has here ronment where people feel comfortable expressing themselves, artistically or otherwise. tion here worthwhile. There must be affordable housing, good infra- structure, efficient public transportation, and good public servicesin general. Only then can we consistently revitalize our human and other local retain and train to strive we shall only not And resources. precious talent, we also want to bring in NEW talents to Penang. Penang needs to change for that purpose, too. Nothing kick-starts change faster than bringing in fresh new blood with new ideas and energy, and adding them to a growing talent pool. Pilot Studies for a New Penang holders. We need smart and willing partnerships across the board. Let board. the across partnerships willing and Wesmart holders. need stake- be to – us of all – us for is succeed. that do to way only the And test thePenangBlueprintmust pass. litmus the is This produces. actually it results the as good as only is it is, it crafted well how matter No system. workable a be can what us to city.international an into Penang transform Adescribes only blueprint to environment and society economy, government, on measures key We must be innovative in all four areas simultaneously if we are to eight on based development sustainable for Blueprint Penang A 8. 7. 6. 5. 4. sacrificing efficiencyandproductivity. without interest public of protection the ensure will return and capping the private sector profits at a reasonable rate of tenders Open profits. for necessity sector’s private the sacrific- ing without upheld is interest public where formula win-win a of model partnership public-private a Adopting pay scales. rated international with provided be shall they benchmarks international approaches service civil the as long as where approach money for value a ensure but savings increase to only not curbed be must spending Such practices. business best of adoption the requires services of quality in rise ing correspond- a without service civil the on spending public costs less. The explosion in the number of civil servants and that but better, works that government a towards Moving velopment; de- human and retraining in investing by resources human our – resource state’sgreatest any of ability the Trustingin able cityin Asia amongst254citiesthroughout Asia; liv- most 10th the as voted was Penang generations. future our for available still be to them allow will that manner a in today used are that resources where – sustainable ment develop make that benchmarks international Establishing doing things; of ways new and thinking of ways new with ment develop and research innovation, creativity, Encouraging economic justice. integrity in public life, checks corruption and pursues socio- XVI XVI - - Foreword XVII With that, I With declare the Penang Outlook Forum 2009 open. Let us us begin this labour of love for Penang as equal partners where we learn learn we where partners equal as Penang for love of labour this begin us together. fruits of our labour and enjoy the grow together together, views. now air our Pilot Studies for a New Penang olwn te ac 20 gnrl lcin i Mlyi hv made have Malaysia in elections general 2008 March the following dynamics The relationship. the strengthen to approaches new on ing Old Boys. Ling Chung and Xaverians Old Frees, Old as such Singapore, in tions schoolboys’ old associa- many find also you Indeed, fathers. founding Singapore’s modern of one Rajaratnam, S. on book a finishing just who is Parliament of Member a Ng, Irene Ms and Health, of Minister Wan,Boon our Khaw Mr are pore’sTwoindividuals in Singa- parliament. such prominently figuring Singaporeans Penang-born with day Hon SuiSenfromBalikPulau. Mr Finance, of Minister late the as such development, early gapore’s Sin- to greatly contributed and Singapore in worked Penangites of ber with theStraitsSettlements. starting ways, general more many in close are Penang and Singapore that forget not us let ties, personal such Besides Singapore. and ang Pen- between existed have that ties intimate the of cognizant naturally am I historian, a As School. WestlandsSecondary the at 1960s the in this pioneereventthatweareallparticipatingintoday. organizeto Penang of (SERI) Institute Research Environmental and ic Notwithstanding the old ties, both Singapore and Penang are work- present the to continue ties geographical and historical Cultural, The people-to-people relations have always been intimate. A num- here teacher young a as time my of memories fond many have I ISEAS has been happy indeed in working with the Socio-econom Two IslandswithSimilarExperiences Speech by Ambassador K.Kesavapany XVIII XVIII [ FOREWORD] (Penang OutlookForum) Director ofISEAS - Foreword - XIX In the economic sector, I believe that Singaporean companies – Per the just mean not do I And deep. go ties our well, as Culturally Ladies and gentlemen; There is much that we can learn from each other, and in many SERI with to collaborate pleased we are forum, particular For this Thank you. this possible. Singapore had the pleasure of receiving a visit by YB Lim Lim YB by visit a receiving of pleasure the had Singapore possible. this such in increase an to lead soon will this Hopefully, recently. Eng Guan both sides. visits from such as the township-building Surbana company, – are involved more intensively in Penang’s economy than is normally assumed. That in- to increase further in these changing times. volvement is bound anakan culture that defines so much of both Penang and Singapore. Our Our Singapore. and Penang both of much so defines that culture anakan and our historical position as role in the pre-war economy was similar, favoured ports-of-call for traders, missionaries, adventurers, and po- litical exiles such as Sun and Yat-sen many others were also similar. experiences are similar. Indeed, many of our ways, we do act as mirrors for each reminding other, each other about up caught losing, of danger in be may we that and share we that values global age. as we are in the political economy of the times challenging the with cope to strategies new of formulation the in ahead, Pilot Studies for a New Penang Penang”. Reshaping and “Restructuring entitled was convention Tellingly,that conference. the at debated those complement to discussed, topics the of salience the of because added been have others few APenang. in Hotel &O E the at 2009 June 1-2 on held 2009, Forum Outlook ang ration andInvestPenang. Corpo- Development Penang the Property,Nasional, BSG fromKhazanah support with Penang and the Institute of Southeast Asian Studies of Singapore, and was sponsored by 1 for 1819, in Singapore of founding the after status pioneer its lost it other.the on markets European with hand, one the on Indonesia While the between link Malay Peninsula and resource-rich countries like Burma, Thailand and international the also was it 1970s, early the until port free a as Furthermore, activities. trading international and gional re- to linked strongly was economy Penang’s 1957, until colony ish the majorplansthathelpedtoshapeitseconomy. let us briefly revisit the history of development planning of Penang and So context. its understand to is plan development a of preparation the Penang StrategicDevelopmentPlan(PSDP2),endsonlyin 2010. Second the namely plan, existing the that fact the despite velopment, Penang’sof de- review a for reasons good provides 2008, 8, March of This was organized by the Socio-economic and EnvironmentalResearchof and Institute Socio-economic the organizedby was This Most of the chapters in this volume are first presented at the Pen- the at presented first are volume this in chapters the of Most As a settlement of the British East India Company and later a Brit- As any student of planning learns in Planning 101, the first step in Indeed, the change of government following the General Elections 1 Political MastersandMasterPlans XX XX [ INTRODUCTION] Goh BanLee&OoiKeeBeng Foreword - XXI From being the major port and trading centre on the China run, Penang – having ousted Malacca – has itself yielded place, to pride successively, Singapore and Hong of Kong and, in recent years, has been bypassed through centralisation of development Valley. Klang the and Swettenham Port in investment capital and Port development, industrialization and within priority vital little granted been have and communications delayed, been all have the National the sphere. Free Island’s Finally, Port status is now a such of products end inevitable The extinction. with threatened unemployment, spiralling depression, are: circumstances of train 132 labour unrest and political instability (p. When Malaya achieved independence in 1957, the focus of atten By the early 1960s, it was abundantly clear that Penang’s eco- The Munro Report called for a structural shift in the economy lead did it although acknowledged widely not is Report Munro The almost almost 170 years, it was generally economically healthier than other Sarawak. mention Sabah and peninsula, not to states on the tion was the new national capital, Kuala Lumpur. It was only natural that Port Swettenham, since renamed Port Klang, would become the main port of the country and receive all the attention and all the - finan to continue not could Penang government. federal the from support cial status for its growth. depend on its free port Penang Master Plans Munro, A.M. advisor, Plan Colombo A way. bad a in was health nomic was engaged to prepare a master plan. The Penang Master Plan (com- monly referred to as the Munro Report) was completed in 1964. In it, conditions were made very clear: poor economic the state’s of Penang. More specifically, it called for an intensive programme of industrialization, focusing on the mainland portion of the state. This recommendation to locate factories on the mainland used Seberang to Perai, be formerly the known as Province Wellesley, was a first as food basket for the islanders. back-water of the state, despite being the Butterworth in Estate Industrial Mandin Mak the of development the to and the setting of import substitution industries, such as textile, cables factory sugar a Furthermore, laminates. and mattresses flour, wires, and Pilot Studies for a New Penang made intheRobertNathanReport.Itsuggestedfollowing: economic activitieswithrobusteconomiesoutsidethecountry. its linked Penang that suggested Report Nathan Robert The Report. tuting manufacturing industry as had been recommended by the Munro import-substi the on concentrated merely it if development economic high unemployment. This meant that Penang would not be able achieve to coupled productivity low of trap” “poverty the break to able be not its economic doldrums. Most importantly, it argued that Penang would cational, health, and research facilities was needed to pull Penang out of edu- and fisheries tourism, industries, manufacturing of promotion the specifically,More state. the of structure recommended economic it the in shift basic a for called also plan this (1970), Report Nathan Robert the as known Popularly administration. earlier the by initiated was it whether or government state new the of request the at done was this Chong Eu,whothusbecametheChiefMinisterofstate. newly formed Gerakan Rakyat Malaysia (Gerakan), led by Tun Dr Lim dismal (Engel,1968). actually was it Commerce, of Chamber Malaya of State the of Branch According to a Memorandum prepared by the Chairman of the Penang bad. remained Penang of situation economic the Nee, Pow WongSri Wharves inButterworth. and a steel mill were also built in Perai. There were also the Deep Water Here, it is useful to quote substantially the insightful observations insightful the substantially quote to useful is it Here, whether clear not is It prepared. was plan master new a 1970, In The the to elections general 1969 May the in Penang lost Alliance Despite serious efforts by the Alliance state government led by Tan 1. break the self-perpetuating circle of low income, deficient income, low of circle self-perpetuating the break panding world markets. In effect, the strategy is designed to ex- rapidly with industries growth to resources its in” ging “plug- by realized be to growth for potential considerable Penang’sfor very calls Plan the Therefore, employed. been have resources its which of production the in services and goods traditional for demand of deficiency the by limited been have to considered is Penang in mar Development regional kets. and national local, by afforded those than demands expanding rapidly more broader, with linkages market establish to economy Penang’s of redirection The XXII XXII - - Foreword - - - - XXIII This is by no means a novel approach to accelerated tion and attitudes that have evolved in response to circum exist (1970: 37). stances that no longer demand, stagnant production, unemployment, low incomes, incomes, low unemployment, production, stagnant demand, func- a not are that demand of elements introducing by etc., in Penang. tion of incomes economic economic growth; it is precisely the approach that has been successfully applied in other Asian Countries beset by la- bour redundancy and limited natural resources, such as Ja- Hong pan, Taiwan, Kong, South Korea and, more recently, Singapore. which influences constraining of removal, or mitigation, The These economy. dynamic more a of development the inhibit include some physical elements of the resource base, but perhaps more significantly, economic policies, administra

2. The significance of both the Munro Report and the Robert Nathan Both plans stressed that in order to ensure the successful implemen successful the ensure to order in that stressed plans Both The Gerakan state government also set up a vehicle to spearhead Report was not only in development strategies and policies, but also in also but policies, and strategies development in only not was Report infrastructure in development planning. For instance, according to the Munro Report, “One of the greatest dangers to the successful imple mentation of any such policy lies in the current lack of planning con- trol within the boundaries of the State and the consequent, widespread speculation in land ” (1964: 133). plan use land good a have to need serious a was there policies, of tation and development control procedures. Among other things, the Robert Nathan Report recommended that a State Development and Planning policy-making and “plan-formulating a as act to established be Council bod- Quasi-Government and Local State, from representatives of body The State 111:233). Government ies” did (1970, actually Vol. set up a State Planning and Development Planning Committee (SPDC). It is interesting to note that in making the recommendation for a state-wide planning committee, the master plan was ahead of its time. The pres- ent powers and functions of the State Planning Committee which are similar are 1976 of Act Planning Country and Town the in for provided to those of the SPDC. stae development. The Penang Development Corporation (PDC) was Pilot Studies for a New Penang uct area into a vibrant industrial centre with electronic factories taking factories electronic with centre industrial vibrant a into area uct Island was transformed from a sluggish commercial and primary prod- Penang years, 10 than less in words, other In Zone. TradeFree Lepan be 43.0percent). to 46.0 percent (PSDP: 1-9) (This figure was subsequently corrected to increased had figure the that estimated was it 1990, by GDPwhile the of 20 years. In 1970, manufacturing accounted for only 12.7 percent of span a within dramatically changed Penang of structure economic the recession 1985-1986 (PSDP: 1-2). the after percent” 12 “almost to impressively rebounded it However, 1980s. the of half first the in growth percent two a only registered sector manufacturing the down, slow economic growth of29.2percent(PSDP:1-2). a recorded which sector manufacturing the by led again percent, 11.2 of average annual an by grew GDP The remarkable. equally also was percent respectively (PSDP: 1-2). For the period 1976-1980, the growth storage and communication sectors also grew by 14.9 percent and 13.2 tor which grew by an average of 18 percent. The utilities and transport, annually by 8.3 percent in 1970 to 1975, led by the manufacturing sec- and Council Municipal Seberang PeraiMunicipalCouncil. Island Penang to changed local were two authorities the of nomenclature the 1976, In authority. local single a a singlemunicipaladministration. after a lapse of 86 years, the whole island Thus, was once Island. again brought Penang under of Management of Board administration, the called municipal was which single a under placed was island the and parties fromSabahandSarawak. of the Alliance, made up of Umno, MCA, MIC, PPP, PMIP and several Gerakan also became a component of the , a coalition then the State Financial Officer. It is also important to note that in 1972, established in 1972 under the leadership of Datuk Chet Singh, who was Physically, the development was largely confined to the Bayan the to confined largely was development the Physically, industries, manufacturing the of growth robust the of result a As worldwide a with tandem In sailing. smooth always not was It 70’s.the in development rapid underwent Penang GDPReal grew form to merged were councils district three the mainland, the On In 1974, the two local authorities in were abolished XXIV XXIV Foreword - -

XXV But there were other problems facing the island. Despite the gen- Despite the economic success, the Barisan Nasional component prep- the with coincided government state new the of installing The Although the plan maintained that manufacturing should contin the lead. More specifically, the South-eastern part of the Island changed changed Island the of part South-eastern the specifically, More lead. the goods producing estate industrial an into area coconut and paddy a from fishing small island, the of coast northern the In world. the over all used villages were replaced by facilities catering to local and international tourists. In other parts of the island, particularly on the outskirts of the housing estates city, were replacing agricultural areas with indigenous attap/zinc-wooden houses. erally high per capita income, it was found that about 30 per cent of households had less than $500 household income per month. Housing for the poor was still in The short physically supply. handicapped and design. building and strategies planning in ignored often were aged the Transportation was still a problem and so was the occurrence of flash floods in the city. Environmental destruction and pollution were be- and were being painfully felt. coming very visible 14 won DAP The Elections. General 1990 the in well do not did parties out of the total 33 state constituencies. More Chief importantly, Min- ister Tun Lim Dr. Chong Eu, the man generally credited for the rapid growth of the state into Silicon Island, lost his seat. However, despite the total candidates, loss the of Barisan all Nasional the still MCA had the majority and Tan Sri Dr of Parti Gerakan Rakyat became the chief minister. Penang Strategic Development Plan Development Strategic Penang the plan, development new a of aration Plan (PSDP), to chart Penang’s development efforts for 1991-2000. It was jointly prepared by the Institute of Strategic and International Corporation (PDC). Studies (ISIS) and the Penang Development ue leading the development of Penang, it also proposed that the state broadened its economic base. More specifically, it recommended that the state placed emphasis on the service higher order services sector such as finance, education, information through technol promoting ogy and medical services. It also called for deepening and intensive the technology intensive, skill of promotion industrial the through base Pilot Studies for a New Penang plan callsforthe following“developmenttrusts”: earlier” (PSDP2:1-4). years ten target the 2020 reaching Vision of confident be can “Penang plan, the in Mohamad). noted Tunminister Mahathir by As prime former country whole the for 1990 in set target (a 2020 Vision in stated than earlier years ten status” “developed a achieved have would ang 1990 prices) (PSDP2: 1-4). According to the plan, this means that Pen- bitious targets is achieving a per capita GDP of RM25,631 by 2010 (in 1-1). (PSDP2: governance” good and vibrancy cultural am- its Among on “economic competitiveness, ecological balance, caring and sharing, first paragraph of the plan, the emphasis of development for the state is the in stated As 2010. to 2001 from strategies development charting Second PenangStrategicDevelopmentPlan(PSDP2) 2-2). for 49.5 percent in 2000, down one percent from that of 1990 (PSDP2: accounted It sector. service the was 2000 in GDP overall the to tion contribu of terms in sector biggest single the that note to important is garment industries. of the employment was in the electrical and electronics and textiles and 1999, an increase of nearly two percent from the 1990 figure. The bulk in percent 39.4 was sector manufacturing the by employment of tion contribu The 2-2). (PSDP2: GDP the in percent 45.7 to cent per 43.0 from growth a registered even sector this fact, In manufacturing. still PSDP (PSDP2:2-1). num which was higher than the 7.3 percent growth rate provided for in an- per percent 8.2 of rate growth average an registered it whole, the Southeast and East in countries On many Asia. indeed and country the was impressive, despite the 1998 Asian financial crisis that hit the state, trepreneurship andthegrowthofsmallmediumscaleindustries. en- local promoting and workforce the of skills training the upgrading for called also plan the Towardsindustries. end, added this high-value In order to achieve “developed status” with an ecological twist, the for is (PSDP2) Plan Development Strategic Penang Second The Although Penang could boast of its robust manufacturing sector, it was sector century,leading 20th the the of decade last the During On the whole, Penang’s economic performance from 1991 to 2000 XXVI XXVI - - Foreword - XXVII Enhancing economic competitiveness; economic Enhancing productivity growth; Improving economy; a Knowledge-based Developing sector; the manufacturing and e-enabling Consolidating sector; the quality of the service Enhancing cluster; Strengthening the tourism sector; Revitalizing the agricultural environment for development; Providing an enabling Expanding the usage of information and communication technology; development; Enhancing human resource transport system; Ensuring a sustainable Providing quality infrastructure; Sustaining ecological balance; Building a caring and sharing society; Encouraging the participation of Bumiputras and other dis- advantaged groups in the economy; Enhancing the quality of life; Promoting cultural vibrancy; Practising good governance. • • • • • • • • • • • • • • • • • • A detailed analysis of A the PSDP2 will have to wait for some post- the in time second the for Elections, General 2008 8, March the In Nevertheless, it would be a mistake to conclude that it was the graduate student eager to do a thesis of the subject. Here it is useful to provide not does thus and bases all touch to tries plan the that out point concentrate on. a focus on certain areas that the state should , Penangites voted for a change of state government. As a result, the , under the Chief Minister Lim Guan . Eng, replaced the Barisan Nasional as the mismanagement of the economy of Penang that caused the people to truth some be may there While polls. the at Nasional Barisan the reject devel of pursuit the in wobbling was government state Penang the that opment and a better quality of life for the people, it is more correct to say that the voting pattern of Penangites was more strongly influenced Pilot Studies for a New Penang relatively far away from Putrajaya, it has to be at the forefront of in- of forefront the at be to has it Putrajaya, from away far relatively percent and6.9from 1999 to2004. 4.1 of rate growth a register did Selangor and Lumpur Kuala both all, said the above, the low growth rate should be a matter of concern. After pur and 23.0 percent for Sabah and 15.4 percent for Trengganu. Having was the lowest in the country, compared to 1.5 percent for Kuala Lum- percent 0.3 The 378). (9MP: 1999 in percent 0.7 from 0.3 down percent, only of rate a registered it 2004, In poverty. hard-core of cation as thatfor1999. high as figure base a with especially annum, per percent seven to five of rate a at grow to continue to Penang in income household average the anticipate to much too expecting from be would up It RM3,531, 1999. in of RM3,128 income household average an with 2004, in that wasloweronlytothoseofSelangorandJohore(p.359). number a 69,146, was Penang for 2001-2005 from Penang for ment crease? Furthermore, it should also be noted that the potential employ in- population sudden a Wasthere incongruence. this for explanation 4.5 per cent. Those involved in producing the data should provide some was figure national the when period same the for cent rate growth average per 5.0 a recorded state the that note to important is It Penang. for income household monthly cent per 2.5 of figure the of robustness with 10.2percent. hore which registered a growth of 3.1 percent. The highest was Pahang Jo- was lowest next the while percent 5.6 was country the for average 2.5 percent, the lowest among the states in the country (9MP: 378). only The was 2004 and 1999 from Penang of income household monthly the of growth of rate the (2006-2010), Plan Malaysia Ninth the to ing compared to the past or to the rest of the country. For example, accord- not doing well in the first halfwas of the firstPenang decade ofthat the newshowing millennium, evidence some is There conditions. nomic ang’s economy. by what was taking place in Kuala Lumpur and Putrajaya than by Pen- There is cause for worry about Penang. Being a small state and state small a Being Penang. about worry for cause is There It is also useful to note that Penang did relatively well in the eradi states richer the of one still was Penang that noted be should It the question to not part our on negligence be would it However, At present, there is no authoritative study on Penang’s current eco- XXVIII XXVIII - - Foreword - Rancangan Struktur , 1964. . Pulau Pinang, 2007. Rancangan Negeri Pulau Pinang Pinang Pulau Negeri Rancangan XXIX - Urban Tem Planning in . Malaysia Petaling Jaya: man of the Penang Branch of the States of Malaya Chamber Malaya of States the of Branch Penang the of man of Commerce, 1968. po Publishing, 1991. ang”, Memorandum to the State Government by the Chair Negeri Pulau Pinang 2020 Strategic and International Studies (ISIS) and Penang De- velopment Corporation (PDC), 1991. . Unit Perancang Ekonomi Negeri Pu- Negeri Ekonomi Perancang Unit (2001-2005). Pertama lau Pinang, 2001. tan Perdana Menteri, 2006 Goh Ban Lee. Jabatan Perancangan Bandar dan Desa. Engel, B. “Notes on the Economic Situation in the State of Pen- Kerajaan Negeri Pulau Pinang. Pulau Negeri Kerajaan Penang Strategic Development Plan 1991-2000. Institute of . Unit Perancang Ekonomi, Jaba- Ekonomi, Perancang Unit 2006-2010. Plan Malaysia Ninth Munro. The Penang Master Plan Success in development efforts depends on having a good plan and plan good a having on depends efforts development in Success only not well so did Penang why on study no been has there far, So novation novation to keep its development momentum going. The fact that it is government national the to opposition the in is that coalition a by ruled to that burden. only adds Conclusion funds, of availability as such factors Other leadership. effective having are workers, productive and land of availability servants, civil efficient factors. these are mitigated next to the first two also important, but in achieving very respectable growth rates in 1970 to 1990 but also in transforming the economy from a basically business and agricultural one into a manufacturing this giant. Was thanks to good planning, - es pecially the Robert Nathan Report or a leadership very in effective the person of Dr Tun , or both? Indeed, could a very - effec is of mediocre quality? tive leadership succeed even if the plan References Pilot Studies for a New Penang State Government of Penang (undated) Robert Nathan. – Penang (undated) Corporation Development Penang tegic DevelopmentPlan2001-2010 ers. Looking Back, YearsAhead Progress.of The PenangMasterPlan XXX XXX The Second Penang Stra- . , 1970. GeorgetownPrint- Looking