Speech by Lim Guan Eng to Old Boys of St Xavier Secondary School on the topic “Penang – The next economic growth centre of Malaysia” in Singapore on Tuesday, 28^th July 2009: 

The Penang State Government is willing to co-operate with the Prime Minister to ensure that the Key Performance Index(KPI) for the 6 Key Results Areas(KRA) are met and a success in Penang 

The standard developmental state literature lists 3 institutional characteristics necessary for promoting successful economic transformation:-

i) Capable, clean and efficient civil service;

ii) An over-riding commitment to economic growth; and

iii) Close public-private partnership(PPP).

By following closely this model, Penang was able to transform itself from an agricultural society with little or no natural resources to an industrialised state during the tenure of Tun Datuk Seri Dr Lim Chong Eu. However, after Chong Eu, Penang went into a state of decline, a fact pointed out by former Gerakan EXCO members such as Datuk Khor Gark Khim.

Progress of infrastructure development in Penang declined compared to other states. Family income growth in Penang was the worst amongst all the states in Malaysia at only 2.5% between 1999-2004, while the average for the whole country was 6.6%! No wonder there are so many Penangnites such as yourself in Singapore searching for equal opportunities.

After Chong Eu, Penang forgot the rules of economic success, and instead tolerated mediocrity, an inefficient civil service, allowed tens of millions of ringgit land scams and ignored private sector participation. Penang found itself in a middle-income country trap between the low-cost competitors in poor countries who are competitive in mature or sunset industries and high-wage innovators in rich countries who are competitive in new or sunrise industries.

If Penang is to leap into the high-income country category, we need to go back to basics in the three institutional characteristics stated above. But to reverse Penang’s decline and make Penang the next economic growth centre again, we have to do more. There are 5 key additional areas that Penang has to adopt if we are to transform ourselves into an international city that can compete globally.

1) A people oriented government based on 3Es to Enable the people with skills and knowledge, Empower the people with rights, opportunities and freedom and Enrich the people for an equitable share in the economic cake;

2) Development of human capital towards excellence, creativity and innovation;

3) Observing the rule of law to promote certainty and justice;

4) CAT (Competency, accountability and transparency) governance to establish a leadership with integrity; and

5) Branding for Penang to ensure quality, reliability and sustainable development

The Prime Minister Datuk Seri Najib Tun Razak did not include democratic rights and equal opportunities when he announced six KRA targets namely; crime prevention, combating corruption, providing greater access to quality and affordable education, improving the quality of life for the poor, improving rural infrastructure and upgrading public transportation in the medium term. However the Penang state government is willing to work together with the Federal government to ensure that the KPIs for the 6 KRAs are at least met or succeed in Penang. The people’s interest come first, and if the 6 KRAs can be met then the people’s lives can improve and we can have a better Penang.

Penang recorded its best ever performance in history with RM 10.2 billion in investments in 2008. With such confidence from the business community towards the new government, the Penang government is seeking similar support from all the excellent and successful professionals in Singapore.

The Penang state government is looking for the assistance from the Malaysian and Penang diaspora in Singapore to help Penang move into the next phase of economic development from a sweatshop to a smartshop; from a manufacturing based economy to a services-driven economy. Let us together restore Penang as the Pearl of the Orient. Let us all transform Penang to reshape Malaysia.

* Lim Guan Eng, DAP Secretary-General & Penang Chief Minister; Member of Parliament for Bagan