Penang and Selangor emerging as the top two manufacturing investment location of choice in Malaysia for 2011

Speech by Lim Guan Eng during the DAP Petaling Jaya Utara Election Fund-raising dinner on Wednesday, 22^nd February 2012:

Penang and Selangor emerging as the top two manufacturing investment location of choice in Malaysia for 2011

Penang and Selangor emerging as the top two manufacturing investment location of choice in Malaysia for 2011 with RM 9.1 billion and RM 8.7 billion respectively proves that PR can provide clean and good governance that inspires confidence from investors. This is the second time that Penang has come out as No. 1 in manufacturing investment as in 2010 Penang emerged as top for the first time in history drawing RM12.2 billion in investments.

For 2011, three out of the top 5 manufacturing investment sites came from the PR states of Penang(1), Selangor(2) and Kedah's RM 6.1 billion at No. 5. Sarawak came in at No. 3 with RM8.5 billion and Johor at No.4 with RM6.6 billion. Good governance based on Competency, Accountability and Transparency as well as open competitive tenders and public declaration of assets by Penang government leaders have inspired confidence amongst investors that they need not worry about any "hidden costs".

PR believes that this commitment of zero tolerance of corruption and integrity in leadership are amongst the critical success factors of Penang continuing to be the top investors' choice for the second year running. The PR states have not only attracted investors but have also displayed impressive financial management skills with yearly budget surpluses that has won accolades from the Auditor-General's Report.

Penang's Debt Reduction Of RM600 Million Or 95% From RM630 Million To RM30 Million Is The Highest In Malaysian History. Debt reduction in Penang by RM600 million or 95% from RM630 million to RM30 million has been dismissed by BN as debt restructuring. Again BN tries to deny PR Penang's achievement in the highest debt reduction in Malaysian history by saying that the Penang's debts were restructured by being transferred to the Federal government. Debt restructuring is different from debt reduction.

Under standard financial literature, debt restructuring is a process that allows a private or public company or a government facing cash flow problems and financial distress, to reduce and renegotiate its delinquent debts in order to improve or restore liquidity and rehabilitate so that it can continue its operations. Replacement of old debt by new debt when not under financial distress is referred to as refinancing.

There is no debt restructuring in Penang's case as Penang has no delinquent debts that are in arrears, suffers no cash flow problems and is not under financial distress. Neither is there refinancing as Penang is not replacing the old RM630 million debt with new ones. This lis simply just a case of debt reduction from RM630 million to RM 30 million, where the state government now no longer needs to pay RM600 million.

BN claims that the same transfer of debts is done in other states ruled by BN. Then why is it that the debts of BN states are not reduced by 95% like Penang after the debt transfers are completed?

Malaysia has lost hundreds of billions in US dollars from corruption. In the latest Global Financial Integrity Report, a shocking RM 1,077 billion of illicit(mainly corruption money) was estimated to have been secretly taken out of Malaysia from 2000-9. The trillion ringgit losses made the first 10 years of the 21st century the lost decade of corruption. No action has been taken on the RM 52 billion bumi share scandal that was supposed to be distributed to poor bumis but just disappeared nor the Perwaja scandal and the Bank Negara forex losses amounting to nearly RM20 billion.

No wonder Malaysia's ranking in the Transparency International Corruption Perception Index plummeted to its worst ever in history of No. 60. The refusal of the BN Federal Government to follow Penang state government's historical initiative of publicly disclosing the assets of the Chief Minister and EXCOS, does not lend confidence to BN's commitment to integrity in leadership and public accountability.

BN has also failed to implement an open tender system resulting in crony capitalism. For instance the recent RM7.07 billion West Coast Highway for the longest concession period of 60 years and the refusal to abolish toll for North-South Highway and Penang Bridge even though the toll operators have earned more than 100% profits over their capital investment, shows how crony capitalism benefits the few at the expense of 28 million Malaysians.

*Lim Guan Eng, DAP Secretary General & MP for Bagan