Story and Pix by Chan Lilian
INDUSTRY leaders from various sectors had a dinner and Q&A session on April 10 with Chief Minister Lim Guan Eng.
Organised and hosted by investPenang, the event saw more than 200 people from the finance, accounting, housing development, electronics and electrical and various corporations and associations in attendance.
Also present were Deputy Chief Minister I Datuk Mohd. Rashid Hasnon, Jelutong MP Jeff Ooi, exco members Phee Boon Poh and Datuk Abdul Malik Kassim, Seberang Perai Municipal Council (MPSP) chief Maimunah Shariff, Penang Development Corporation general manager Datuk Rosli Jaafar and other state leaders.
The focus of the Chief Minister’s speech was ”Emerging Penang In An Emerging Asia: Escaping The Middle-income Trap”.
Lim gave a list of Penang’s many achievements over the past six years. But he questioned: “There is no doubt that Penang is slowly emerging in an emerging Asia. However is this enough to escape the middle-income trap?”
Following the World Bank’s definition of middle-income status (countries with per-capita income of US$1,036-US$12,516 (about RM3,300 to RM41,000), there are eight countries that fall into this category in East and South Asia: Malaysia, Thailand, Indonesia, the Philippines, Vietnam, China, India and Sri Lanka.
“In the simplest sense, the middle-income trap denotes a situation where developing economies that have achieved middle-income status find it challenging to compete with low-income economies whose resource-driven growth is backed by low-cost labour and capital, and advanced economies whose productivity-driven growth is supported by innovation,” Lim said.
“Sandwiched between the two, prior economic strategies no longer remain effective at producing economic growth of yesteryears. Coupled with governance problems that impede the necessary institutional and policy changes needed to graduate into the ranks of advanced economies, the result is a steady decline and an eventual stagnation in economic performance,” he added.
Further challenges also emerge, such as social cohesion, a sizeable group of young population in search of employment, as well as the failure to eradicate poverty, primarily in lagging countries.
Fundamentally, the middle-income trap is an economic governance issue. Undeniably, policy paralysis is the biggest impediment to growth, especially the failure to address issues of public integrity, social justice, economic prosperity, democratic accountability, political dignity.
In the dining hall at the Penang Golf Club in Bukit Jambul, the 200-over CEOs, presidents, managing directors and other industry leaders listened attentively.
This was the crowd of who’s-who and the movers and shakers of the economy.
An air of serious contemplation and eyes and ears were focussed to what the Chief Minister had to say.
His words define the future of the industries in Penang.
They want to know what Penang has to offer in terms of ”Preparing Penang For The Future” as their businesses rely on those factors too.
“As a responsible government in Penang, we believe in being prepared. For when the day comes that the tide turns, we do not want to be caught naked but instead be the best equipped amongst our peers. In other words, I am talking about strengthening our financial position.
“Since taking over in 2008, the state government established a budget-based administration and governance based on the principles of CAT (Competency, Accountability and Transparency).
”Through the implementation of open competitive tenders for all public procurements and tenders, requiring all state elected representatives to make public declaration of assets and full disclosure of government contracts signed with the private sector, making CAT governance of competency accountability and transparency our core values.”
“Thus Penang has been able to record budget surpluses every year without increasing any rates, increase our state assets by 50% from RM800 million to RM1.2 billion, rescue a local government (Seberang Perai Municipal Council) from bankruptcy within only one year and more importantly reduce our state debts by 95%. These achievements have been corroborated by Transparency International as well as the annual Auditor-General’s reports.”
At the dinner, investPenang also held an exhibition on the BPO hub.
To explain the BPO hub, Lim told the industry leaders: “Penang is investing in the shared services sector through a RM3.3 billion Business Process Outsourcing and Information Technology Outsourcing (BPO-ITO) hub that will see the creation of thousands of high-paying and knowledge-intensive jobs. Already, global financial services firm Citibank has opened its Global Citigroup Transaction Services centre here, employing more than 1,000 local employees with an annual volume of 20 million transactions worth US$5.8 trillion.”
In addition to Citigroup, other companies that have set up their shared services here include Wilmar, AirAsia, HIS, Atmel, Toll Forwarding and Jurong Shipyard.
In total, the IT-BPO Hub will comprise 74 acres of IT-BPO Park in Bayan Lepas, a planned development of seven acres BPO Prime in Bayan Baru for ICT companies and a 100,000 sq ft Creation Animation Triggers (CAT) in the George Town heritage enclave.