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~ Jf INTEXTATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DEVELOPMENT ECONOMICS DEPARTMENT Public Disclosure Authorized URBA AND REGIONAL ECONOMICS DIVISION URBAN ANW-REGIONAL REPORT NO. 72-1 ) R-72-01 DEVE)PMIET ISSJES IN THE STATES OF KELANTAN, TRENGGANU Public Disclosure Authorized AND PA HANG, MALAYSIA' JOHN C. ENGLISH SEPTEMBER 1972 Public Disclosure Authorized These materials are for internal ulse on2;7 auid are circulated to stimulate discussion and critical coxmment. Views are those of the author and should not be interpreted as reflecting the views of the World Bank. References in publications to Reports should be cleared -iith the author to protect the Public Disclosure Authorized tentative character of these papers. DEVELOPMENT ISSUES IN THE STATES OF KELANTAN, TRENGGANU AND PAHANG, MALAYSIA Table of Contents Introduction 2. Economic and Social Conditions 2.1 Population 2.2 Employment Characteristics 2.3 Incomes 2.4 Housing 2.5 Health 2.6 Transportation 2.7 Private Services 3. Economic Activity 3.1 Agriculture 3.2 Fisheries 3.3 Forestry 3.4 Manufacturing 3.5 Trade 4. Development to 1975 4.1 Agriculture and Land Development 4.2 Forestry 4.3 Projection of Agricultural and Forestry Output 4.4 Manufacturing Page 5. Conclusions 87 5.1 Transportation Links 89 5.2 Industrial Policy 92 5.3 The Role of Kuantan 96 5 .4 The Significance of Development in Pahang Tenggara 99 5.5 Racial-Balance 103 Tables and Figures 106 ~. + A5Af2;DilXlt2¢:;uessor-c.iL?-v ylixi}Ck:. -. h.bit1!*9fwI-- 1. Introduction The following report is based on the findings of a mission to Malaysia from July 3 to 25, 1972- by Mr. English. -The principal objective of this study is to investigate the problem of regional balance in West Malaysia with particular reference to the east coast states of Kelantan, Trengganu and Pahang. it should be pointed out at the outset that did not deal at all with the states of East Malaysia i.e. Sabah and Sarawak. Generally speaking, national figures refer to West Malaysia only, except where explicitly stated. The study aims to: (1) assess the current situation, comparing the economic and social conditions in the three east coast states with those in the rest of West Malaysia; (2) assess the development potential. of the east coast states, utilizing available data on current production, resources and linkages with the rest of the economy; (3) assess the impact of current public and private development in the area relative to that in other states, taking into account proposals in the Trengganu, Pahang Tenggara and Johor Tenggara studies; (4) indicate possible policy measures which might be undertaken or problems which might be subjected to more detailed study. -2- Chapter 2 of the report sumnrarizes the data obtained on, economic and social conditions with particular reference to the east coast states. Chapter 3 indiacates the present scope of economic activity of the states and the linkages with the rest of the Malaysian economy. This is $ollowed in Chapter 4 by a review of information, obtained on the plans of major agencies for the Second Malaysia Plan (SMP) period, particularly for Kelantan and Trengganu. In Chapter 5 an attempt is made to project outputs in major sectors for the 3 states to 1980 and to assess the impact of the major Pahang Tenggara project. The concluding chapters discuss a number of problems raised by the earlier analysis. 2. Economic and Social Conditions 2.1 Population The most recent census was carried out in Malaysia in 1970. The previous count was taken in 1957. Full tabulations from the 1970 cen.zus for age and racial distribution are not yet to hand. A post-enumeration sample survey (PESS) was carried out after the 1970 census which investigated income, employment and educational attainments. Results of this survey are also not yet available, but it is hoped that they will be obtained in the near future. The Malaysian Statistics Department is hopeful of finishing these tabulations by the end of 1972. The populations for the states of West Malaysia in 1957 and 1970 are shown in Table 2.1. Total population grew from 6.279 million to 8.8 million an increase of approximately 40 percent (2.7 percent per annum). -3- Only 3 states had population increases of above this proportion, Selangor (which includes the federal capital of Kuala Lumpur), Pahang and Trengganu. The slowest rate of growth, 28 percent (2 percent per annum) was recorded in the west coast state of Perak. The population of the remaining states all grew by between 30 and 40 percent over the 13 year intercensal period. Detailed population figures by district are given in Appendix Table II.1. For purposes of exposition t-hese have been mapped in Figure 1. This shows a very interesting picture. Those districts which grew in population by more than 50 percent in the 1957-70 period, fall into two distinct groups. The first are larger urban areas experiencing significant industrial growth, namely Johore Bahru, Kuala Lumpur/Klang and Penanig Central (including the port and industrial area at Prai). The others are "frontier" but where development areas at present largely undevelopedkis now taking place. These are con- centrated in Pahang, Ulu Kelantan and Tanah Merah districts in Kelantan, Dungun in Trengganu, Padang Terap, Sik and Baling districts in Kedah, and Kota Tinggi district in Johore. The lowest increases, less than 25 percent took place mainly in districts heavily dependent on smallholder agriculture e.g. Pasir Mas, Tumpat and Bachok in Kelantan, Kuala Pilah and Rembau in Negri Sembilan, Pontian in Johore, Kuala Kangsar and Lower Perak in Perak and Bandar Bahru and Yen in Kedah or in districts dominated by rubber plantations or mining with few alternatives e.g. Kulnim in Kedah and Tapah in Perak. Particularly in the first group i.e. those dependent on small- holder agriculture there appears to have been a slower growth of population in districts nearer major urban areas compared to other similar districts e.g. Haar and Batu Pahat in Johore ihich are further away. Thus in Kelantan the figures suggest that there have been two movements first from rural areas to Kota Bharu, particularly from the adjacent districts and to the frontier areas of the state i.e. Tanah Merah and Ulu Kelantan Districts. Table 2.1: WEST MALAYSIA - POPULATION, 1957 and 1970, POPULATION . GROWTH AND MALE-FEMALE RATIO BY STATE Percentage Male/Female Population Growth Ratio State 1957 1970 1957-1970 1970 Johore 927,565 1,273,990 37.3 1.008 Kedah 701,6h3 955,374 36.2 1.012 Kelantan 505,585 680,626 34.6 .979 Malacca 291,,246 403,722 38.6 .957 Negri Sembilan 36h,331 479,312 31.6 1.009 Pahang 312,944 503.131 60.8 1.076 Penang & P.W. 572,132 776,770 35.8 .998 Perak 1,221,390 1,562,571 27.9 1.002 Perlis 90,866 121,062 33.2 1.000 Selangor 1,012,891 1,629,386 60.9 1.o52 Trengganu 278,165 hO5,751 45.9 1.012 Total 6.278,758 8,801.399 40.2 1,o14 I4qle-Female ratios have been computed and are shown in Tables 2.1, Appendix Table II.1 and in Figure 2. These give a broadly similar picture suggesting migration to the three main urban-industrial areas and the frontier areas. The slow growth of the mining-industrial area of Ipoh is apparent in these figures. -5 An estimate of the level of urbanization has been made, basing this upon population in incorporated places of over 5.000 inhabitants. The figures by state are given in Table 2.2 for both 1957 and 1970. Nationally the proportion of population in urban areas rose from just under 32 percent to 34 percent., The proportion fell .in only 2 states, Penang and Pahang. The former is probably a reflection of suburban type development, but the latter a result of major population increase following land development in previously unsettled areas, plus the existence of one or two slow growing mining towns. The other two east coast states are both below average in urban population, but that in Trengganu increased rapidly, mainly based on growth of Kuala Trengganu (this may partly reflect bourdary changes). Table 2.2: WEST MALAYSIA - URBAN POPULATION BY STATE, 1957 and 1970 Urban Population Percentage of Total State 1957 1970 1957 1970 Johore 263,899 398,955 28.5 31.3 Kedah 98,654 137,544 14.1 14. Kelantan 82,935 124,800 16.4 18.3 Malacca 69,851 106,791 24.0 26.5 Negri Sembilan 74,869 131,399 20.6 27.4 Pahang 84 ,883 111,084 27.1 22.1 Penang 336,026 433,935 58.7 55.9 Perak 407,552 582,157 33A1 37.3 Perlis 60o65 8,757 6.7 7.2 Selangor 505,019 837,748 49.9 51.4 Trengganu 52,834 117,021 19.0 28.8 Total 1,982,587 2,990,191 31.6 34.0 -6- Detailed data on racial distribution from the 1970 census are not yet to hand as noted earlier. Table 2.3 shows t.he estimates derived by the Socio-Economic Sample Survey of Households (MSSH) carried out in 1967. These figures are presented by region rather than by state-/ and because the sample was relatively small (about 2.4 percent) and small of error. proportions3 e.g. of "other rates" are subject to high probabilities This table shows clearly the major differences in racial composition of the east coast states and the rest of the country.