Published July 2, 2009

Penang CM spells out his vision for the state

In his assessment, Singapore is the toughest competitor around

By PAULINE NG
IN KUALA LUMPUR

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HIGH-WAGE jobs and quality investments are needed if Penang is to successfully transform from an electrical and electronics hub into a leading services player, its chief minister told an investor conference.

Mr Lim: Says state-federal ties might not always be cordial, but it could be workable

Singapore featured in his assessment as the toughest competitor around.

Despite attracting slightly over RM10 billion (S$4.1 billion) in investments last year - including notable ones by Honeywell Aerospace and National Instruments - Penang Chief Minister Lim Guan Eng ranked a decision by the US cardiovascular medical devices maker St Jude Medical to build a US$30 million facility in the state as one his most satisfying achievements in investment drawing in the year past.

'Singapore had almost clinched the deal but somehow we convinced them to come to Penang,' Mr Lim told investors during a panel session on Malaysia's Growth Centres: Johor, Penang & Sabah.

Minnesota-based St Jude Medical plans to put up a 300,000-sq-ft plant to make cardiac products including pacemakers, and upon its completion in 2011 is expected to provide 300 high-income jobs and close to 1,000 jobs later if its expansion goes according to plan.

Johor Chief Minister Ghani Othman said Singapore had always been one of the top three investors in Johor and that there was 'a huge amount of complementaries between the two', given Singapore's strategic location and Johor's vast hinterland and natural resources.

However, he added that Johor was also well located and becoming more competitive as a future destination for investments. Indeed, much has been made of the over RM40 billion in investments that the new growth corridor Iskandar Malaysia in South Johor has managed to attract in the past two to three years.

But it was Mr Lim's vision for Penang that the participants warmed to.

Elected the new chief minister of Penang following victory by the opposition coalition Pakatan Rakyat in five states during last year's general election, Mr Lim spoke of his vision of turning Penang into a vibrant and sustainable international city.

Over the past year, the state has been actively courting investors by highlighting its strengths: Strategic location, big pool of knowledge workers, great heritage, delicious food and hospitable people - all of which make for a grand lifestyle.

But Mr Lim alluded to the fact that Penang's transformation would have been easier if not for the many talents lost, including to Singapore. These include a number of Singapore judges who were Penang-born.

However, because all states are reliant on federal funds for infrastructure development, there are also doubters as to whether the state's political rivals in the federal-led Barisan Nasional coalition would stymie its ambitions.

'Can the federal government allow Penang to fail because if it does it would not serve its interest,' Mr Lim said in reply to a question from a participant. All tax revenues go to the federal coffers, he observed, noting the state accounted for nearly a quarter of Malaysia's total exports and 65 per cent of its medical tourism.

State-federal ties might not always be cordial, but it could be workable, he said, pointing to federal funding for the second Penang bridge and RM250 million for its airport expansion as acknowledgement by the national government that it could not afford to marginalise the state.