A SFZ for Penang can reverse the drop in approved investments for Penang that has dropped out of the top 5 states for both the first half of 2022 and 2023. Malaysian Investment Development Authority (Mida) reported that Malaysia has attracted a total of RM132.6 billion (US$28.3 billion) worth of approved investments from January to June 2023.
These investments in the services (RM82.4 billion), manufacturing (RM44.9 billion) and primary sectors (RM5.3 billion) involve 2,651 projects and are expected to create 51,853 job opportunities. Mida said the 2,651 projects approved from these investments in the first half of 2023 represent an increase of 34.8% compared to the first six months of 2022.
There is no doubt that the services sector will be the primary source of approved investments in the future for Malaysia, comprising 62% of total approved investments. The top five states that have recorded significant investment value to the total approved investments are Kuala Lumpur (RM31.7 billion), Selangor (RM29.7 billion), Kedah (RM14.6 billion), Johor (RM14.2 billion) and Sabah (RM9.0 billion).
Penang has dropped out of the top 5 states for the first half of two consecutive years in 2022 and 2023 due to the lack of investments in the services sector and declining manufacturing investments resulting from Penang’s depleting industrial land bank. Even Kedah is in the top 5 due to their large industrial land bank and close proximity to Penang.
A SFZ for Penang similar to that announced by Prime Minister Anwar Ibrahim for Johor Baru will help to boost the services sector in Penang and reverse the declining trend of approved investments. The Penang state government and Penangites regardless of political affiliation, must come together to apply for Federal government approval of a SFZ for Penang in the coming 2024 Budget.