Changing Penang In A Changing World: Transforming Penang

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 am extremely proud to be given the opportunity to govern the beautiful vibrant state of Penang and delighted to have the opportunity to speak to you. 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 Singapore. We have so much in common, shared history and people. Our bonds are deeply intertwined, culturally, politically and economically. I would like to highlight some of our common features. We are both small states that have punched above our weight economically through the hard work and creativity of our people. We have both been successes despite our size and obstacles we share. Today, more than 25% Malaysia’s exports in terms of value and volume 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 Singapore, we appreciate the importance of planning, a favorable market environment for investors and fiscal responsibility. 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 Singapore’s adaptability, how it has managed to respond to financial crises such as those in 2003 and 2008 and continues to be a role model for promoting economic growth in Southeast Asia. I am also deeply interested in the reforms that Singapore will introduce to address the social concerns that were brought to light in the recent May election, as the challenges Singapore faces in addressing inequalities and promoting integration are common across the region. I am looking forward to learning more from Singapore and deepening ties here.

Penang has recently rebranded itself as a location of choice for investors and destination of choice for tourists. We are one of the top 3 tourist destinations in Malaysia. We are the top investment state in Malaysia in 2010 drawing investments from all over including Singapore. Penang contributes towards 36% of Malaysia’s FDI despite having only 6% of the country’s population.

There are 7 key factors that account 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, non-corrupt, governance and effective leadership
6. Building creativity and innovation in science and technology, and
7. Livable and safe city environment

For these reasons, in our quest to be the smartshop of the Software Valley knowledge-based economy, we are mindful of being a livable city and creating a vibrant urban environment. ECA International listed Penang as the most livable city in Malaysia on par with KL. Penang is world-famous for our street food and CNN recently placed our Penang asam laksa as the 7th best food in the world. KPMG International listed us as one of 30 global Business Process Outsourcing Centre for the future. We are proudly a UNESCO World Heritage City for our outstanding universal value of cultural diversity and living heritage.

But what then for the future. As I thought about my trip to Singapore, I realized it was important to highlight the need for adaptation, to adjust to new circumstances. Events over the last week in the market place highlight how vulnerable we are to sudden changes in economic fortunes and developments in the global economy. To survive and thrive, we need to adapt. Singapore did this in 2003, more recently after the 2008 financial crisis and continues to do so in response to the uncertain evolving global economy.

We believe that in order to be sustainable and thrive it is necessary to balance economic growth with greater equitable development for all. We know Penang must find its own niche as an international and intelligent city. Branding for Penang is important that is synonymous with quality, reliability, safety, sustainability and integrity. Equally important is social cohesion and inclusion towards a shared society that allows democratic participation, respect for diversity and individual dignity, equal opportunity and prohibition of discrimination. But most crucial of all is equal opportunities for the young and talented to grow and fulfill their potential.

A Changed World:

Ladies and gentlemen, I would like to take the marker of 2003 as a shared one to begin the discussion, over eight years ago. For Singapore this was a difficult year, one in which SARS and the region slowdown acutely affected your economy and brought home some of the vulnerabilities of the closer global links with China and the slowdown of the US economy.

This year was also significant in Malaysia, in that it marked the year which former premier Tun Dr. Mahathir Mohamed stepped down from office. New leaders have come into office since then, with new ideas. I am part of the new generation of leaders. We share an appreciation of the need to reform and adapt. Gone are the days when hardware – new HDB flats, new roads and clinics – can satisfactorily meet the needs of our people.

We face the common task of bringing the more difficult software to our citizens, the tangible but intangible concerns with quality of life, while simultaneously strengthening institutions to bring about these changes.

This brings me to the first main point about today’s changing world – the advent of crisis. In our region we have now seen two major financial crises and a series of natural disasters, most recently illustrated by the tragic March 2011 earthquake and tsunami in Japan. We do not yet know the impact of the developments in the financial markets over the last week. It has now become normal to expect the unknown. None of us are fully ready for a crisis, but we have learnt that we have to put in place conditions to be prepared. We need to plan for uncertainty.

In Penang I have adopted measures to help Penang be prepared for the unknown within the confines that a chief minister can implement. We have improved the state’s financial position with three years of consecutive record surpluses and rescuing a local town council, that lost RM230 million, from bankruptcy.

I believe strongly in financial responsibility. A financial base is not enough, however. It is vital to strengthen the political institutions. Professionalising the civil service, establishing some of the institutions of civil society such as setting up the first Speaker’s Corner in Malaysia and enacting the Freedom of Information Act. This new model of governance that is tied to a recognition of the need to think toward the future – is a vital step not only today, but for than rainy day when conditions change. If anything we have learn in the past decade or so is that change is inevitable, and we must be as ready as we can to face the new horizon.

Part of today’s changing world involves a need to forge links and networks regionally including China. We must give recognition of our special relationship with these countries including Singapore where we are bonded by blood, tested by time and driven by shared values of excellence, competitiveness and integrity. From early on, as part of the Straits Settlements, Singapore and Penang have shared strong bonds. Many a Penangite has migrated to or works Singapore, and many a Singaporean visits Penang. The nearly 20 flights daily to and fro between our two islands are full.

Thirdly we should never put our eggs in one basket we need to diversify. Despite our close linkages with our traditional investors in electronic industry from Japan, Europe and US, we are deeply engaged in working with China and India as well as our regional neighbors Singapore, Indonesia and Thailand as well. The focus is not just on investment, but broadening tourism and cultural exchanges.

Our MYPenang campaign featured in June-July in Dhoby Ghaut illustrated graphically common historical and personal ties. It highlighted the many tourist attractions of our state. This initiative, along with our other outreach efforts, reflects a rebranding of our state, one in which we inspire those who have not visited Penang for many years to return or come for the first time. I cannot emphasize enough that we are indeed a new Penang, and aim to strengthen our international profile in this every changing global context.

The global changes in the world are not also taking place within in Asia. In the last six months we have seen what scholars are already labeling the fourth wave of democracy, the powerful political revolutions that others have labeled the Arab spring in the Middle East. From Tahril Square in Cairo to the more disturbing recent confrontations in Syria and Yemen, the demands for political change highlight the fact that people want fairer better political systems.

Even in Singapore the call for change had greater resonance in May. This brings me to the fourth point; 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. In the Middle East and elsewhere, corruption, greed and self-interest have eroded public confidence and destroyed public faith in leadership. Political institutions from the judiciary to the police have been weakened by vested interests aiming to protect the few, the elite, rather than the people at large.

The lessons from the Middle East are clear – that elites that do not serve the people and are more interested in power and their own pocket book will be opposed. Malaysia’s contemporary Bersih movement draws from many of the same concerns in today’s Middle East. We want stronger political institutions, fairer opportunities for all and clean government.

Penang’s mantra from the day I took office has been the same – absolutely no corruption. None. The large investments in Penang for infrastructure is by open tender, committed to good governance and open to all. Penang is proud to be the only state in Malaysian history to be praised by Transparency International. 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.

My final point though obvious is crucial for small states dependent on the world economy like Penang, 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. Partisan politicking in the US and an unwillingness to make tough decisions on the Euro debt crisis in Europe are now having their affects. It is thus our responsibility as leaders to minimize these negative effects on our people.

Changing The World:

I am a young leader in this new challenging and changing world. Our success as today’s leaders will be judged by how we transform our countries and use our most important resource to develop – our people. To use an economic analogy, our success depends on our people moving up the value chain, a context where the needs – physical and psychological – our people are being met and maximized. This brings me to the second section of my remarks, the steps needed to change the world, our world here in Asia, but especially my world in Penang and Malaysia.

In this day and age where financial interest and materialism is a driver in the economy and alas sadly sometimes for others in politics, I cannot emphasis enough the need to have a moral core and set of ideals that guide our action in government. Malaysia’s opposition of Pakatan Rakyat– whether it is my party the Democratic Action Party, the Islamic Party of Malaysia, PAS, or Anwar Ibrahim’s party Parti Keadilan Rakyat – is guided by a set of common ideals – broader democracy, fairness, human dignity, hard work and mutual respect. We are bound together by a shared goal, to make Malaysia a stronger and fairer nation for all of our citizens of every community and background.

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 and I understand daily challenges to find a uniform for your child, to provide the best education for your children, to know that you have enough income to provide for your loved ones, and importantly, to be able to live a life with dignity and security. 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. I draw inspiration from the many people – across ethnic communities – who walked the streets last month in a call for Bersih, a cleaner electoral system and better Malaysia.

As a people-centric government, the most important goal is provide equal opportunities for all especially the opportunity for our children to realize their potential. Nothing can be sadder than to destroy the confidence of a child with obsolete and dangerous racist ideology that one’s child is never good enough and must be forever depend on the tongkat or the wheelchair, and they will never be rewarded for their good performances no matter how deserving they are.

To attain peace Malaysians must stand united and reject those who wish to divide us by preaching racial and religious hatred. If we want to benefit from equal opportunities and realize our human potential we must stop extremists from continually degrading others as inferiors so as to uplift ourselves.

We can only achieve harmony together. Despite our differences and diversity, Malaysians can make our common aspirations of freedom, justice, democracy and truth come true if we remember key values.

That it is not who we are that is important, but what we are that is important. Not the colour of our skin that is important but the content of our character and not our past ancestry that is important but how we connect with the present and with each other to face the future.

We cannot be locked in the past and allow the past to close off possibilities of a better future. Ladies and gentlemen, here in Singapore, when the 2003 SARS crisis happened, you embraced a new future together. No matter the political differences in the recent May general elections, Singaporeans were unified in wanting a better country and a better future for Singaporeans. In 2008, in Penang and other Pakatan Rakyat-run governments, we also embraced the future and we continue to do so. Change is an ongoing process, one in which as leaders we must nurture.

To be honest, sometimes it can be quite frustrating, and often I am overtired in my dedication to making results happens as soon as possible. We know that the time has come to leave behind policies that are not working and adopt new initiatives. We know that we cannot let the anguish and hurt of the past blind us to a new future. Our country is strong because of our ethnic and religious diversity, where all communities can practice their faith and know that they have a secure place in our nation’s future. We know that we have to embrace the young, and learn from the wisdom of the old.

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. This blueprint was drafted by the state’s think tank Socio-Economic and Environmental Research Institute (to be renamed Penang Institute this year) and is the result of dialogues across the state. 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. In the past we have been known as the Pearl of the Orient and our policies are framed around bringing back the luster of the past. We are a living heritage city, a UNESCO World Heritage site, and we have been working to promote and enhance our heritage monuments. We know that livability is not just about the buildings and new land developments – and we have quite a few exciting property and commercial developments coming – but also about the maintaining the quality of the physical environment and affordable housing.

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. We have offered more public transportation options, such as a free bus from the mainland for factory workers, and are exploring plans to diversify road transportation options. We also appreciate the cultural and psychological dimensions of livability, and have actively worked to encourage the arts and create open spaces. Last month we held a very successful 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. A marker of the infrastructural upgrades is Penang’s new airport, where the substantial renovations are expected by next year that will allow for more flow of tourists and investors. Reducing costs to business and creating a working environment that is conducive to success is essential for the brighter future for Penang and Malaysia as a whole.

Part of the revitalization process has been to invest in the city core of Georgetown, knowing that the synergies between the city and other parts of Penang are strong and extend outwards. The 2009 World Bank Report on Globalization stressed that the city is an economic unit and as such can serve as a lynchpin in promoting multifaceted growth and development. We in Penang believe that building cities not only serves national development, it has important positive spillovers for the state as a whole.

Let me highlight a third "R" – "Reclaiming Responsibilities". The state governments have been overshadowed in Malaysia by the federal government. There is a limited range of areas where I as a chief minister have jurisdiction. We are working to reclaim these responsibilities. We believe that decentralization of decisions and resources is absolutely necessary to effectively reach communities. As such, 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.

We know that as state leaders that the local is important, and that every citizen sees their government from their everyday experience. We are taking responsibility for what the constitution allows us to implement and building on our deeper knowledge of local conditions.

These ideas are part of a broader strategy of moving Malaysia out of what the World Bank has labeled the "middle-income" trap. Livability, economic revitalization and political decentralized with more efficient and fairer governance.

Steps Toward Success

Yahoo Travel recently listed Penang as one of the 10 top islands in the world you must explore before you die. For those who have come to Penang we can all die happy.

Ladies and gentlemen, I have shared with you some of contemporary Penang’s story, how we are going about transforming Penang in a changing world. We ask you to come to Penang, to see for yourself the success where we build the future for our youths as well as our youths for the future.

Speech by The Honourable Lim Guan Eng Chief Minister of Penang At Foreign Correspondents Club, Singapore on 12 August, 2011