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The Economist Praises Penang


Penang chief minister Lim Guan Eng’s open tender policies are helping Penang regain its lustre as a ‘global city’ by lifting the state’s economy to beyond that of a sweat shop industry, The Economist reported last month.
In its latest issue dated August 13, the international weekly dubbed Penang “the first custom-made city of globalisation” and credited Lim for boosting the port city’s revival by axing a racial special treatment economic policy in the state to create a more level-playing field that appeals to foreign investors.
“He has become the first governor in Malaysia to open up all state tenders to competition. This has entailed dismantling the special preferences for ethnic Malays that have underpinned the BN’s rule since the early 1970s,” the influential magazine on business and international affairs said of Lim and his economic reforms.
“Adapted to the national stage, such policies could transform the way that the Malaysian federal government conducts business,” it added.
The Economist article titled “Getting back its mojo: After a slump, an early engine of globalisation is thriving again”, it reported that Penang had emerged as the top choice for investors out of Malaysia’s 13 other states, due to its strategic geographic location between Asia’s two rising economic giants and adhering to the rule of law as its trump card.
The article pointed out that “Penang’s own ‘Silicon Valley’ companies know that the rule of law in Malaysia gives them the sort of protection for patents and intellectual property they would not enjoy in China, and an ease of doing business that they could not find in India.”.
“Crucially, most of the new jobs are in research and development rather than assembly. An American chip-designer, Altera, has a new facility with 1,100 workers in Penang, 800 of them engineers. Its head says that almost all the engineers are locals — which is good for Malaysia,” it said.
It noted that Penang was also be varying its investments; while the manufacturing sector was expanding rapidly as scores more electronic firms and medical-device makers are setting up base in the port city, it had also emerged as a top destination for medical tourists in the region offering top-notch services at a fraction of the cost in first-world countries such as the US.
“Little wonder, then, that Penang has become a political weathervane as much as a lesson in economic development,” it concluded. – The Rocket