Under Pakatan Harapan, DAP offers a winning future for Malaysia that is prosperous, free and fair to all our 30 million citizens. Penang is a model of how we can win Malaysia’s future through inclusive economic growth, celebrating diversity, reducing income inequality and investing in education.
When we first took over in 2008, our first order of priority was to prove that a clean government can perform better than a corrupt government. That is implemented through our CAT governance based on Competency, Accountability and Transparency. Hence, while financial scandals and Malaysia have become almost synonymous, Penang is proud to maintain its unblemished record.
One of the first things we implemented was, believe or not, an open competitive tender system. All this while, government procurement in Malaysia has been notoriously opaque, with those with “political cables” favoured over genuine contractors. By making our tender process completely online and accessible to everyone, we replaced political cables with computer cables, thus ensuring there was no avenue for corruption to take place.
Because public officials in Malaysia are known to enrich themselves and their relatives, we also took a strong stand against the scourge of nepotism and cronyism by institutionalising periodical public asset declarations for all elected representatives in Penang, including the Chief Minister. In addition to that, we also expressly forbade all elected representatives and their family members from having conducting business with the state government.
We have been commended by the annual Auditor-General Reports as the most financially efficient state government and even praised by Transparency International, the first time that any state or federal government in Malaysian history has been so lauded.
All these measures resulted in our cash reserves increasing by 50% and our debt has been reduced by 90%. We recorded budget surpluses for every year since we took power in 2008. From 2008 to 2013, our total surpluses came up to RM453 million, from which we have spent RM287 million on social welfare programs to help the needy and other vulnerable groups within the state. In fact our RM453 million accumulated surpluses over 6 years far exceeded the surpluses accumulated over the previous 50 years from 1957-2007 under the previous BN government of RM373 million.
The RM287 million distributed in the form of cash welfare aid has reduced poverty to near zero levels. The poverty line indicator is RM790 monthly per household. All households earning below RM790 monthly will be given unconditional cash transfers to “top up” to RM790 monthly. For instance if your monthly household income is RM600, you will get RM190 every month to “top up” to RM790.
As a direct result of these programs, we were able to reduce our Gini Coefficient, which is the measure of income inequality, by 12% over a period of 3 years, from 0.42 in 2009 to 0.37 in 2012. Of course, we have exceeded our targeted minimum wage of RM1100 monthly by ensuring that all state government staff earn this minimum amount. This is enriching the people to ensure that the fruits of economic success are also distributed to all.
We also have to deliver on basic services. To do that we have to be able transform the civil service. Again through CAT governance and a policy of promoting and rewarding competent staff, Penang is now cleaner, greener, safer and healthier. As a comparison, why is it that Johor continues to suffer from water rationing when Penang has never conducted any water rationing? Worse, for Johor residents, despite suffering from water rationing, they have to pay water rates that is 4 times more expensive with the lowest domestic tariff at RM1.30 per 1,000 liters compared to Penang at only RM0.32 per 1,000 liters!
Thanks to our CAT model of governance, international investment has increased. From 2008 to 2014, we managed to attract RM48.2 billion worth of investments, which is 93% higher than the RM24.9 billion invested on a similar 6 year period from 2001 to 2007.
We recorded GDP growth of 7.4% in 2014 in Penang; and the 11th Malaysia Plan estimates Penang’s GDP growth this year to be equally robust at 6.2%. We also have full employment with Penang recording the historic low 1.2% unemployment rate last year. Or a shortage of 20,000 workers. Such good employment market is translated to households in Penang enjoying household income growth of 7.6% annually between 2012 and 2014.
Penang would have been a high-income economy this year if not for the fact the ringgit dropped 30% in value due to the RM 42 billion 1MDB financial scandal and RM2.6 billion donation scandal involving the Prime Minister. The performance of the ringgit, which has dropped by 28% over the past one year to over 4.3 to 1 US dollar. This effectively means that Malaysians are poorer by 28% in US dollar terms.
Penang has paid the price by dropping back to middle-income status when we are supposed to graduate to high-income economy this year. The World Economic Forum Human Capital Report defined a high-income economy as one whose Gross Domestic Product or GDP per capita reaches USD$12,467 or RM 40,841 based on the exchange rate of RM3.27 for USD$1.(based on early 2014 exchange rates)
Instead of RM40,841 as the benchmark to achieve high-income status, the 28% drop in the ringgit means that the benchmark has been increased to RM52,000. Penang was expected to achieve a GDP per capita of RM42,251 based on a population of 1,681,922 people and a GDP of RM71,063 million by this year 2015. Penang’s GDP per capita of RM42,251 would have exceeded the benchmark of RM40,841 to become a high-income economy.
However, based on the current exchange rate of a 28% drop in the value of the ringgit, Penang’s 2015 estimated GDP per capita of RM42,251 is still far off from the new revised high-income benchmark of RM52.000. This goes to show the cost to Penangites in terms of price inflation due to the drop in the ringgit, but also Penang missing out from being a high-income economy.
Talent is universal but opportunity is not. The state government hopes this initiative will provide our talents with the opportunity. We are willing to invest in the future by investing in education. Only when we invest in the future, can we win the future.
Penang have invested heavily in talent, especially as a center of excellence for science and technology at all levels. The Penang Future Foundation Scholarship scheme with a contribution of RM 40 million, where talented Malaysians are given scholarships based on merit. This is open to all Malaysians, including Johor. The only condition is that these scholars serve their bond in Penang for a stated period either in the public or the private sector.
After 3 years of hard work, the Penang government has finally succeeded in launching Malaysia’s first German Dual Vocational Training Programme on 1 September 2015. This German vocational training is world-class and unique because students study and work in the factories at the same time. The Penang state government is donating RM2 million to pay school fees, whilst the students have the benefit of an allowance of RM900 monthly by the participating companies. In other words, the students are paid to study.
From the present 500-600 places available from our RM2 million contribution, we intend to open up more places for not just Penangites but for all Malaysians. We are willing to spend another RM2-4 million more if necessary to build new talent. Talent must be enabled with rights and responsibilities. To do that we have to grant them freedom, freedom of equal opportunity, freedom to be the best they want to be and realise their potential.
All this successes are achieved without threatening racial or religious riots, pitting Malaysians against each other or clamping down on freedom. Penang is an oasis of diversity, celebrated through our UNESCO World Heritage site of George Town. Why should different language and cultures divide us? Calling for single stream education and indirectly closing down Chinese and Tamil schools makes us all losers when there are more and more non-Chinese in these schools.
Penang is recognized internationally of how we all can benefit from celebrating diversity through mutual respect, embracing technology and tolerance of new ideas. DAP believes we can unite Malaysians through good ideas, moral principles and public integrity.
The next general elections will be won on who can offer a better economic future. All the rhetoric about having clean leadership would not be relevant if we become bankrupt or there is no competent economic management to improve the people’s lives, whether to help the poor, assist flood victims, provide better services and better education.
The Pakatan Harapan state government’s performance in Penang have shown that we can unite the people around competent economic management through inclusive economic growth that benefits all. If we can do it in Penang, Pakatan Harapan can definitely replicate that success throughout Malaysia to save our troubled economy and restore dignity to us all.