Speech by Lim Guan Eng at Foreign Correspondents Club, Hong Kong on Friday, 17^th June 2011: 

Changing Penang in a changing world: Transforming Penang into an international and intelligent city 

Ladies and gentlemen thank you very much for inviting me here to speak. I come here as the Chief Minister of Penang, one of four states led by Pakatan Rakyat or the People's Pact, the opposition coalition in Malaysia. I am from the Democratic Action Party, one of three coalition partners. I hope by the end of my remarks you will consider coming to visit and invest in Penang, as it continues to be an attractive location for business and pleasure alike.

It is wonderful to be in Hong Kong. We have so much in common; small states that have punched above our weight economically through the hard work and creativity of our people. Today, nearly a third of Malaysia's exports come from Penang - more than half of the country's electronics are produced there - and we are among the top tourist destinations in Malaysia with a record numbers of visitors. Like Hong Kong, we appreciate the importance of good food and open discussion. We both have worked hard to put ourselves on the map internationally, and done so successfully.

We both know that in order to progress, we need to adapt and transform. I have long admired Hong Kong's adaptability and innovation, how it has managed to stay a leader in the financial sector and serve as a hub for economic growth in Northeast Asia. I am looking forward to learning more from Hong Kong and forging new ties here.

Penang has recently rebranded itself as a location of choice for investors and destination of choice for tourists. There are 7 key factors that accounts for our success as a location of choice for investors:-

1. Ready availability of human talent;

2. Effective and efficient supply chain management;

3. Competent and reliable logistics and communications hub;

4. Strong Intellectual Property protection;

5. Good governance and effective leadership;

6. Building creativity and innovation in science and technology, and

7. Livable city.

For this reason, in our quest to be also the Software Valley knowledge-based economy, we are mindful of being a livable city and vibrant city. ECA International recently selected Penang as the 8th most livable city in Asia, on par with Kuala Lumpur. Penang is world-famous for our street food, KPMG International listed us as one of 30 global Business Process Outsourcing Centre for the future and a UNESCO World Heritage City for our outstanding universal value of cultural diversity and living heritage.

There are 7 elements of change towards retaining Penang's premier position as the most livable and vibrant city in Malaysia that makes Penang the destination of choice for tourists.

1. public security and order with one of the lowest crime rates and political stability,

2. capable delivery of services and actively managing change,

3. economic vibrancy and competitiveness,

4. quality of life and diversity,

5. environmental friendliness and sustainability,

6. heritage conservation, and

7. intelligent city.

Branding for Penang is important that is synonymous with quality, reliability, safety, sustainability and integrity. But most crucial of all is equal opportunities for the young and talented to grow and fulfil their potential. We believe that this is the way forward for Penang to be both the sweat shop of the manufacturing and services sector and the smart shop for the future knowledge-based economy.

A Changed World:

In Penang, I have adopted measures to help Penang be prepared for the unknown within the confines that a chief minister can implement. For me, an accountant by training, I value the need to improve the state's financial position with three years of consecutive surpluses and rescuing a local town council that lost RM230 million from bankruptcy.

A financial base is not enough, however. It is vital to strengthen the political institutions. Working with the civil service - often with mindful oversight and admittedly ups and downs - we have aimed to strengthen the institutions at the state level. The main thrust this has followed has been to engage broadly in civil society and provide feedback on policy.

The Penang state government is well aware of the need to revamp our infrastructure in order to maintain our competitiveness. All investment in Penang for infrastructure is by open tender. We look forward to having new investment partners, and richer collaboration. Here in Hong Kong we want the financial sector to understand the reasons we are an attractive investment location, namely a new commitment to economic revitalization and quality governance.

Global political realignment since 1997 has also taught us of the need to never put all of one's eggs in one basket, to diversify. This is why in Penang, while we are deeply engaged in working with China and Hong Kong, we also are eagerly engaging Indonesia, India, Thailand and Singapore, our regional neighbors. I will also make a trip to India later in the year. Within Southeast Asia, the focus is not just on investment, but broadening tourism and cultural exchanges.

The need to anchor what we do in our people - to be people-centric. Everything we do as leaders should be driven by a desire to serve the people. Penang's mantra from the day I took office has been the same - absolutely no corruption. None. We must create opportunities for everyone. The people must be served by having a government that protects their interests, rather than one that is self-interested.

Yet, for me, as a leader in office, I am concerned with the underlying worrying global trends that cannot be easily managed, the macroeconomic trends of inflation and jobless growth. This is my fifth point, the need to effectively manage globalization. Rising oil prices and rising incomes in China have contributed to inflationary pressures that are being felt throughout Asia. It is thus our responsibility as leaders to minimize these negative effects on our people.

Changing the World:

I am part of Malaysia's fourth generation of leaders. Our success as fourth generation leaders will be judged by how we transform our countries and use our most important resource to develop - our people.

I am very proud to be a Malaysian, and everything I do is directed at making our country stronger and better. I have personally witnessed the struggle of ordinary Malaysians to make ends meet in these difficult uncertain times and the hardship that some families endure. My own family comes from humble means. When the politics in my country is full of personal attacks, many fabricated by newspapers that engage in storytelling of hatred, I draw strength from my knowledge that what I do is for Malaysia, for all Malaysians.

We cannot be locked in the past and allow the past to close off possibilities of a better future. Ladies and gentlemen, here in Hong Kong, when the 1997 turnover happened, you embraced a new future. In 2008, in Penang and other Pakatan Rakyat-run governments, we also embraced the future and we continue to do so.

Our Policy Direction

I wanted to take a moment to share with you some of the concrete policy frameworks we are adopting in Penang. This foreshadows some of the ideas in the forthcoming Penang Blueprint from 2011 to 2015 which drafted by the state's think tank Socio-Economic and Environmental Research Institute. From the onset we have recognized the need to think of new innovative approaches and ideas to move Penang and Malaysia forward, and welcome further inputs. Allow me to share some of the core ideas in the forthcoming Penang Blueprint. We have grouped them under the "Rs":

The first point I want to emphasize is "Reviving Penang's Livability" by being sustainable. Penang is the first green state in Malaysia. We are a living heritage city, a UNESCO World Heritage site, and we have been working to promote and enhance our heritage monuments. In Penang, we led Malaysia in the introduction of green initiatives such as the "no plastic bag campaign" and we are actively exploring housing programs for lower income and middle class residents. One of our most challenging policy areas has been improving traffic and transportation. Next month in the Georgetown Festival of the arts highlighting dancing, film and cuisine. Artists know that Penang is a place where creativity is valued and showcased.

A parallel "R" is "Revitalizing the state's business environment." We are streamlining the process for permits and licenses to reduce the red tape. We have removed the biggest obstacle of all, the alleged payoff. We have created a special unit to support small and medium enterprises and upgrading infrastructure.

Let me highlight a third "R" - Reclaiming Responsibilities. We are introducing social safety net policies such as our program for the elderly at the state level. We have also empowered and energized the local councils, and the results are obvious to any visitor. Penang is cleaner and safer.

In summary join us in this exciting journey we are taking to change our world by transforming Penang into an international and intelligent city. What do we mean by an intelligent city? An intelligent city consists of:

a) human intelligence as the basic unit;

b) collective intelligence on how we synergize and harness the individual intelligence together;

c) digital intelligence to ensure broadband penetration for all;

d) institutional intelligence so that government, private industry and NGO are "clever" enough not to drive away the best and brightest;

e) integrity intelligence to avoid from being robbed by smart crooks; and

f) residual intelligence which Penang has the advantage of the experience built up from being exposed and interacting with top cutting edge technology companies over the last 40 years.

Penang has all 6 intelligences what we need to reinforce and strengthen them and demonstrate a viable alternative towards a more successful Malaysia.

Steps toward Success

Ladies and gentlemen, I have shared with you some of Penang's story, how we are going about changing the world in a changing world. We ask you to come to Penang, to see for yourself the success we are building.

*Lim Guan Eng, Penang Chief Minister