Speech by the Lim Guan Eng, Penang Chief Minister in the investPenang Industry Dinner at Penang Golf Club on 10th April 2014

Posted in Dari Meja Ketua Menteri

Speech by the Lim Guan Eng, Penang Chief Minister in the investPenang Industry Dinner at Penang Golf Club on 10th April 2014

Emerging Penang In An Emerging Asia: Escaping The Middle-income Trap

A very Good Evening,

It is indeed a pleasure speaking to you in this special occasion tonight on Business and Investment Updates in Penang.

Penang is one of the top three tourist destinations and investor location of choice in Malaysia. For the first two months of this year Penang airport domestic arrivals recorded a 33.4% increase compared to the same period last year whilst foreign airport arrivals recorded a 8.23%. Penang was the top foreign direct investment (FDI) state in Malaysia for the period of 2010 to August 2013 amounting to RM 19.7 billion or nearly 20% of Malaysia’s total FDI of RM 103 billion. 

Apart from being the investment location of choice of almost all of the top electronics, L.E.D., medical devices and aerospace companies in the world, Penang has been recognised as a cost-competitive location by the International Institute for Management Development 2012 World Competitiveness Yearbook. There is no doubt that Penang is slowly emerging in an emerging Asia.

However is this enough to escape the middle-income trap? Following the World Bank’s definition of middle-income status (countries with per-capita income of US$1,036-US$12,516 (RM41,052), there are eight countries that fall into this category in East and South Asia: Malaysia, Thailand, Indonesia, the Philippines, Vietnam, China, India and Sri Lanka.

In the simplest sense, the middle-income trap denotes a situation where developing economies that have achieved middle-income status find it challenging to compete with low-income economies whose resource-driven growth is backed by low-cost labour and capital, and advanced economies whose productivity-driven growth is supported by innovation.

Sandwiched between the two, prior economic strategies no longer remain effective at producing economic growth of yesteryears. Coupled with governance problems that impede the necessary institutional and policy changes needed to graduate into the ranks of advanced economies, the result is a steady decline and an eventual stagnation in economic performance.

Further challenges also emerged, such as social cohesion, a sizeable group of young population in search of employment, as well as the failure to eradicate poverty, primarily in lagging countries. Fundamentally, the middle-income trap is an economic governance issue. Undeniably, policy paralysis is the biggest impediment to growth, especially the failure to address issues of public integrity, Social justice, economic prosperity, democratic accountability, political dignity.

The Penang state government has worked hard to implement people-centric policies to address these socio-economic justice issues and recognising political rights to allow us to live with dignity. Most importantly we believe that national unity can only be achieved and social harmony can only exist when we celebrate our diversity and respect our differences.

A more inclusive and sustainable growth strategy will be needed, and this essentially means exercising economic reforms are crucial. Some key structural challenges facing emerging markets include; infrastructure investment, increasing innovation through research and development and promoting entrepreneurship, and investing in human capital by way of revamping education systems in order to produce highly-skilled workers and professionals, among others to effect productivity on a broader scale.

Preparing Penang For The Future.

External shocks will bear significant impact on Malaysia and Penang, being that our economy is still largely dependent on export-oriented manufacturing. Whilst it is impossible for anyone to predict the financial markets, it is important to remember two things:
1.       A rising tide lifts all boats; and
2.       Only when the tide recedes do you discover who is swimming naked.
As a responsible government in Penang, we believe in being prepared. For when the day comes that the tide turns, we do not want to be caught naked but instead be the best equipped amongst our peers. In other words, I am talking about strengthening our financial position.

Since taking over in 2008, the Penang state government established a budget-based administration and governance based on the principles of CAT (Competency, Accountability and Transparency). Through the implementation of open competitive tenders for all public procurements and tenders, requiring all state elected representatives to make public declaration of assets and full disclosure of government contracts signed with the private sector, making CAT governance of competency accountability and transparency our core values.

Thus Penang have been able to record budget surpluses every year without increasing any rates, increase our state assets by 50% from RM800 million to RM1.2 billion, rescue a local government(Seberang Perai Municipal Council) from bankruptcy within only one year and more importantly reduce our state debts by 95%. These achievements have been corroborated by Transparency International as well as the annual Auditor-General’s reports.

As we move forward, the government is upgrading from a budget-based administration that plugs leakages and cuts waste or inefficiencies to an outcome-based administration which stresses on positive impact and difference to the stakeholders that generates economic growth (pro-growth), creates employment opportunities (pro-jobs) and foster equitable justice (pro-poor).

Penang believes that economic growth alone is not enough if income inequality is not reduced through equitable distribution of wealth. 40 years after Arthur Okun’s book of “Equality and Efficiency:The Big Tradeoff”,International Monetary Fund’s economists have concluded that reducing inequality accelerates not reduces economic growth not in occasional spurts but sustained growth.

Hence, Penang is not only the first state in Malaysian history to wipe out corruption but also the first state to wipe out poverty. Adopting the unconditional cash transfer or UCT model of topping up all families whose monthly household incomes are below the poverty line of RM790 per month, Penang has managed to free itself from absolute poverty. Now, we are focusing on reducing relative poverty through cash aid and providing affordable home ownership by building 20,000 affordable housing units throughout the state in addition to another 20,000 units more from the private sector supply.

Penang has relied on the twin economic engines tourism whether medical, education or recreation in nature and manufacturing in electrical and electronic sectors, automation, medical devices and aerospace. However, the key to future economic success is not an over-reliance on one sector but to seek convergence of not only the manufacturing sector but also both the services and government sector.

Penang is investing in the shared services sector through a RM 3.3 billion Business Process Outsourcing and Information Technology Outsourcing(BPO-ITO) hub that will see the creation of tens of thousands of high-paying and knowledge-intensive jobs. Already, global financial services firm Citibank has opened their Global Citigroup Transaction Services centre here, employing more than 1,000 local employees with an annual volume of 20 million transactions worth USD5.8 trillion.

In addition to Citigroup, other companies that have set up their shared services here include Wilmar, Air Asia, HIS, Atmel, Toll Forwarding and Jurong Shipyard. In total, the IT-BPO Hub will comprise of 74 acres of IT-BPO Park in Bayan Lepas, a planned development of 7 acres BPO Prime in Bayan Baru for ICT companies and a 100,000 sqft Creation Animation Triggers (CAT) in the George Town heritage enclave.

In pursuit of our goal to become an international and intelligent city, we have taken the important steps of institutionalising the fundamentals of rule of law, good and clean governance, as well as integrity in leadership. Following on from that, we have established outcome-based administration that focuses on creating a rising tide that lifts all boats. However building and retaining human talent will be critical.
Decentralization Of Education To Give More Power To Schools To Decide How To Improve On Their Students’ Performance.

Malaysians should be "alarmed" that their children were doing worse in school than children in Thailand and Vietnam, which are poorer than Malaysia. The Programme for International Students Assessment or PISA 2012 ranked Malaysian students at 52 out 65 as compared to Vietnamese students ranking of 17 out of 65.

Malaysia's poor PISA results contradicted BN’s claim that Malaysia has a world class education system on par with United Kingdom highlighting instead the weakness of our school system despite education receiving the largest share of national budget annually. Global management consulting firm McKinsey suggested what schools need to do after studying 25 of the world's school systems, including the top performers in PISA tables.

As reported in The Edge, schools need to do three things:
•        get the best teachers;
•        get the best out of teachers; and
•        step in when pupils start to lag behind.

This is where the Malaysian Education Ministry needs to invest in if Malaysia wants to meet its objective of being in the top third in the PISA ranking. Based on the total amount spent on education per student in the six to 15 years age range, over a 10 year period(eduex) that is above the per capita GDP.
Almost all of the performers in the top third spend more than 100% in eduex above their pcGDP. The OECD average is 147%. Malaysia on the other hand is at the bottom of the PISA spectrum and spends the least amount compared with all the countries listed in the chart – a mere 12% on eduex above pcGDP. Even Thailand with a lower pcGDP than us, spends 43%. It is ironic that Malaysia's education budget allocates a huge amount for education, but lags behind. It is time we give some attention to students in the 6 to 15 years range.

Malaysia must be bold on decentralisation to give more power to schools to make their own decisions based on their local circumstances. There is no one six-fit-all education system. After you cannot teach a fish how to climb trees. Further, schools can be more efficient by grading them on performance and merit which will compel them to seek better trained teachers. Ultimately it is the school teachers that makes the difference and can inspire students towards excellence.

Education is our lifeboat to the future. Not only can it reduce inequality, it can provide mobility and opportunity to all. Only a sound education foundation can provide ladders of opportunity and escalators to mobility. Penang state government is adopting a 3-prong approach towards strengthening our education system:-

Giving annual funding to existing half-funded vernacular and religious schools;

Building Learning centers that focus of STEM teaching of science, technology, English and Mathematics; and

Attracting world class universities as well as adopting the German vocational school system within multi-national corporations.

These are huge challenges and success is yet uncertain. But we must be willing to try and invest in education. For only when we boldly invest in the future then can we win the future. In summary winning the future for Penang requires 5 critical success factors.

Good governance that is competent, accountable and transparent (C.A.T.);

Encourage human capital formation;

A functioning rule of law;

Building up communications infrastructure

A livable Penang with a dynamic art and cultural environment that is cleaner, greener, safer and healthier

Making Penang cleaner, greener, safer and healthier will be crucial towards realizing our vision to transform Penang into an international and intelligent city. Our ambitious plans will be reliant on our one and only resource, our human talent. We believe in your energy, expertise and entrepreneurship will help Penang escape the middle-income trap and provide high paying jobs.




Posted in Dari Meja Ketua Menteri

Rujukan Kami      :                      
Rujukan Tuan      :   KeTTHA:BPA(S) 666/6/31(22)
Tarikh                   :   07 April 2014
Yang Berhormat Datuk Seri Panglima Dr. Maximus Johnity Ongkili
Menteri Tenaga, Teknologi Hijau dan Air Malaysia
Kementerian Tenaga, Teknologi Hijau dan Air Malaysia
Aras 6, Blok E4/5
Pusat Pentadbiran Kerajaan Persekutuan
62668 Putrajaya
YB Datuk Seri Panglima
Dengan hormatnya kami merujuk kepada perbualan kami di ruang Parlimen minggu lepas berkaitan surat YB rujukan KeTTHA:BPA(S) 666/6/31(22) tanggal 18 September 2013 mengenai perkara di atas.
Kami ingin menegaskan bahawa dengan siap binanya projek pembesaran Empangan Mengkuang, bekalan sumber air mentah (total reliable yield) di Negeri Pulau Pinang tidak dapat memenuhi permintaan bekalan air menjelang 2020 dan bukannya 2026 atau 2030 seperti yang dimaklumkan dalam surat YB di atas. Malah permintaan  air yang kian meningkat dengan pertambahan penduduk dan pembangunan yang pesat, bekalan air di Pulau Pinang mungkin tertekan mulai 2020.
Laporan Masterplan Study for Portable Water in Penang 2050 (MSPWPP)menunjukkan dengan siapnya projek pembesaran dan perluasan Empangan Mengkuang, jumlah air mentah yang terhasil untuk memenuhi permintaan air pada akan bertambah kepada keseluruhan 1,325 million litre per day (mld) pada tahun 2020 berbanding dengan 1,053 mld pada 2010. Pihak PBAPP telah melaksanakan inisiatif-inisiatif berikut untuk mengujudkan kesedaran penggunaan air secara berhemah dan menguruskan bekalan air secara mampan.
Inisiatif 1 – Melaksanakan Pengurusan NRW secara Holistik.
Semenjak Perbadanan Bekalan Air Pulau Pinang(PBAPP) dikorporatkan pada tahun 1999, PBAPP telah berusaha untuk mengurangkan kehilangan air terawat di Pulau Pinang dengan memantapkan program pengurusan air tidak berhasil (NRW). Hasilnya peratusan NRW di Pulau Pinang adalah yang terendah di Malaysia iaitu pada paras 17.6% untuk tahun 2012 berbanding dengan purata nasional sebanyak 36.4%. PBAPP akan terus berusaha untuk mengurangkan lagi NRW pada tahun-tahun yang akan datang di mana dalam Plan Rancangan Perniagaan 30 tahun disasarkan kepada 12%.
Initiatif 2 – Peningkatan Nilai Air melalui Surcaj Pemeliharaan Air (WCS) dan Tarif Air
Kami memang bersetuju dengan pandangan YB bahawa Program Pengurusan Permintaan Air (Water Demand Management) yang komprehensif juga perlu diberi tumpuan sebagai usaha untuk memastikan penggunaan bekalan air mentah yang berhemat di Negeri Pulau Pinang. Penggunaan air per kapita yang tinggi ini mendorong kepada pengabstrakan air mentah yang berlebihan untuk dirawat oleh operator air.
Dalam usaha untuk mengurangkan Penggunaan Domestik per kapita (PCD) iaitu 291 liter sehari per kapita (lcd) yang dicatatkan pada tahun 2010, pihak PBAPP telah memperkenalkan Surcaj Pemeliharaan Air (WCS) sebanyak RM 0.24 untuk setiap 1,000 liter bagi penggunaan melebihi 35,000 liter sebulan berkuatkuasa November 2010. Dengan pelaksanaan WCS ini, PCD telah menurun ke 285 lcd pada tahun 2011. Walau bagaimanapun PCD pada tahun 2013 telah meningkat semula ke 295 lcd dan setakat akhir Februari 2014 telah mencatat 311 lcd.
Untuk menangani peningkatan ini, berkuatkuasa November 2013, PBAPP telah meningkatkan kadar WCS ke RM0.48 daripada RM0.24 sebelum ini. Ternyata disini bahawa ianya tidak mudah untuk mengurangkan PCD. Oleh yang demikian kerajaan negeri telah membenarkan pihak pengurusan PBAPP menaikkan tarif air secara komprehensif.
Dengan menerima syor YB Menteri untuk mengurangkan penggunaan air, tidak ada halangan lagi untuk pihak Kementerian melaksanakan SPRWS, termasuk mengambil inisiatif berbincang dengan negeri Perak, di mana kerajaan Pulau Pinang sedia membayarkan kos air mentah kepada negeri Perak. Pihak Kementerian akan menanggung perbelanjaan SPRWS sebanyak RM300 juta sahaja sedangkan RM1.7 billion untuk pembinaan loji rawatan air ditanggung oleh PBAPP menerusi pinjaman dengan Perbadanan Aset Air Bhd(PAAB) serta PBAPP menanggung juga pembayaran kos air mentah kepada negeri Perak.
Inisiatif 3 – Meningkatkan Tahap Kesedaran dan Penglibatan Orang Awam
PBAPP akan meneruskan kempen publisiti untuk meningkatkan kesedaran awam tentang pentingnya memelihara air dengan mengurangkan penggunaan air. Pihak SPAN sedang dalam proses untuk memperkenal dan mempromosikan alat penjimatan air atau Water Saving Devices(WSDs) untuk mengurangkan penggunaan air melalui pelaksanaan Efficient Water Product Labeling. PBAPP telah menandatangani satu Memorandum Persefahaman (MoU) dengan Universiti Sains Malaysia (USM) untuk membantu mempromosikan budaya penjimatan air kepada kampus USM Minden. Pihak PBAPP juga telah mengadakan sesi penerangan dan pameran untuk mempromosikan penggunaan WSDs dan membantu untuk menggalakkan budaya penjimatan air di sekolah-sekolah seluruh Pulau Pinang.
Inisiatif 4 – Pembangunan Sumber Air Tambahan
Dalam tahun 2012, Sungai Muda telah membekalkan lebih daripada 80% permintaan air mentah di Pulau Pinang dan sungai ini cuma boleh menampung penggunaan air di Pulau Pinang sehingga tahun 2020. Selepas itu penambahan sumber air mentah yang lain seperti SPRWS amat diperlukan.
Laporan MSPWPP telah mengenalpasti Skim Air Mentah Sungai Perak (SPRWS) sebagai sumber air mentah pada masa hadapan untuk Pulau Pinang. Kos projek pemindahan air mentah ini dijangka melibatkan kos RM300 juta yang akan dibiayai oleh Kerajaan Pusat seperti yang dinyatakan di dalam Water Services Industry Act 2006(WSIA).
Projek pemindahan air mentah yang melibatkan pembinaan terowong sepanjang 14.8 KM dijangka mengambil masa enam (6) tahun untuk disiapkan bermula dari peringkat kajian, pemeriksaan lokasi, rekabentuk dan pembinaan. Oleh yang demikian adalah amat penting bahawa projek pemindahan air ini perlu dimulakan serta-merta sebelum air mentah memenuhi kapasiti selepas 2020.
Walau bagaimanapun PBAPP perlu melabur sebanyak RM1,700 juta untuk membina Loji Rawatan Air, saluran paip, stesen pam dan tangki penyimpanan. Kerja-kerja pembinaan Loji rawatan ini akan dilaksanakan dalam empat (4) fasa untuk memenuhi permintaan air sehingga tahun 2050. Kami harap boleh mendapat pinjaman untuk jumlah ini daripada PAAB.
Anggaran kos untuk projek pemindahan air mentah yang dikendalikan dan dibiayai oleh Kerajaan Pusat ini adalah RM300 juta untuk membekal sejumlah 1,300 mld (RM0.27 setiap liter) untuk membekalkan air ke Pulau Pinang dan Perak Utara serta air untuk Skim Pengairan Kerian. Cadangan ini adalah kos efektif.
Pencemaran yang berlaku pada penghujung Ogos 2013 di Sungai Selangor yang mengakibatkan gangguan besar bekalan air di Lembah Klang telah menunjukkan betapa lemah serta mudah terdedahnya sumber air mentah kepada pencemaran. Seperti yang kita sedia maklum empat (4) Loji Rawatan Air di Sungai Selangor telah ditutup yang mengakibatkan gangguan bekalan air kepada lebih kurang 50% pengguna air di Selangor dan Wilayah Persekutuan.
Pentadbiran ini ingin merujuk kepada surat SPAN rujukan SPAN/KPA-700-7/4 KLT 2(27) bertarikh 2 Ogos 2012(dilampirkan bersama) di mana pihak SPAN telah menyatakan persetujuan untuk melaksanakan SPRWS serta-merta. Demi mengelakkan kekurangan air minuman menjelang tahun 2020 bila bekalan air daripada Sungai Muda memenuhi kapasiti, projek SPRWS hendaklah dilaksanakan dengan segera sebelum terlambat.
Jika projek ini dilaksanakan sekarang, kos pembinaan dan kos pengambilan tanah yang pasti meningkat masa depan dapatlah dielakkan. Pelaksanaan SPRWS dengan serta merta akan menjadi satu keputusan yang bijak berhubung dengan penjimatan kos untuk mengelak peningkatan kos dan juga mengurangkan risiko krisis air di Pulau Pinang mulai tahun 2020.
Kesimpulanya kami memang menghargai jaminan YB yang berkomited untuk memastikan air yang cukup dan berkualiti dapat dibekalkan kepada rakyat negeri Pulau Pinang. Untuk melaksanakannya, adalah perlu jaminan yang diberikan dalam Skim Penstrukturan Semula Industri Bekalan Air Pulau Pinang yang telah dimeterai di antara Kerajaan Persekutuan dan Kerajaan Negeri Pulau Pinang pada 2010 dapat ditegakkan.
Oleh itu besar harapan kami agar YB Dato’ dapat menimbang semula dan memastikan projek SPRWS ini dapat dilaksanakan dengan segera demi mengelakkan sebarang kekurangan air selepas 2020. Sekian, terima kasih.

-- CN version --

Rujukan Kami      :                      
Rujukan Tuan      :   KeTTHA:BPA(S) 666/6/31(22)
Tarikh                   :   07 April 2014


我针对我们上星期在国会走廊针对你志期2013年9月18日(KeTTHA:BPA(S) 666/6/31(22))来信的谈话内容,特此致函。


槟州供水机构在1999年成为机构以后,便致力于减少槟州的无收益水白白流失。槟州的无收益水是全马最低,在2012年达17.6%, 全国平均为36.4%。供水机构将会继续努力减少无收益水,经营大蓝图把未来30年的无收益水目标订为12%。




措施3 – 提升公众醒觉及参与
供水机构将会继续教育公众,以提升公众关于保护水源及节约用水的醒觉。水服务理事会(SPAN)也正在推荐及推广节水配备(WSDs),以通过有效水产品标签减少用水。供水机构也与理大签署了谅解备忘录,以协助在理大Minden校园推广节水文化。供水机构主办各项说明会及展览,以推广节水配备,以在全槟学校推广 节水文化。

措施4 – 附加水源的发展 







我们也要提及水服务供理事会志期2012年8月2日(SPAN/KPA-700-7/4 KLT 2(27))的来函。为了避免2020年饮用水减少,慕达河供不应求,SPRWS计划必须马上进行。



Penang’s Proposed Water Tariff Hike Is To Avoid Water Rationing, Whose Proceeds Goes Towards Government’s Water Projects, Is Different From Sugar Price Hike That Benefits Not The Government But Only Private Cronies.(EN/CN)

Posted in Dari Meja Ketua Menteri

Press Statement By Penang Chief Minister Lim Guan Eng In Komtar, George Town On 5 April 2014.
Penang’s Proposed Water Tariff Hike Is To Avoid Water Rationing, Whose Proceeds Goes Towards Government’s Water Projects, Is Different From Sugar Price Hike That Benefits Not The Government But Only Private Cronies.

Penang PR state government’s proposed water tariff hike is intended to avoid carrying out water rationing, where the proceeds goes towards government’s water projects. This is different from sugar price hike that benefits not the government but only private cronies controlling the sugar business. Pro-BN mainstream media has adopted the MCA and Gerakan line of attack on the proposed water tariff hike by equating the water tariff hike to the sugar price hike.
Equating the rationale for the water and sugar price hike is illogical and a specious fallacy because the proposed water tariff hike intends to avoid water rationing in the future. The sugar price hike is not to avoid any sugar rationing. When the Federal government decided not to subsidise sugar by removing the 20 cents subsidy, the private cronies controlling the sugar business did not lose a single cent but still recorded profits. These profits continued to be earned at the expense of the people who paid a higher price.
On the other hand, any proceeds from the water tariff hike would still belong to the state government and be utilised towards water projects for the people’s benefit. The Penang Water Supply Corporation or PBAPP continues to be the best water supply management I Malaysia with a Non-Revenue Water(NRW) at 17.6% as compared to the national average NRW of 36.4%.
I am puzzled by the self-contradictory remarks by Energy, Green Technology and Water deputy minister Datuk Seri Mahdzir Khalid in criticising the increase water tariff to curb water wastage because Penang can adopt the Ministry’s activities to save water. And yet he had admitted that the people are not heeding advice to save water.(see attached)
As the state government’s efforts towards curbing water wastage such as education and Water Conservation Surcharge(WCS) to penalise those who waste water over the last 6 years have failed, raising water tariffs is the last resort to avoid water rationing. The photos of consumers suffering from water rationing in Selangor, KL, Johor and Taiping should remind us their hardships, especially on women and the elderly.(see attached)

Climate change may result in a prolonged drought this year. Worse this drought may recur annually for an extended period for 5 years as had happened in Australia. We must remember that the prospect for a drought is very real with the ASEAN Specialised Meterological Centre in Singapore predicting lower rainfall in April to May and a dry spell between June to October this year.
The Penang state government stresses that even after we raise water tariffs, Penang will still enjoy the lowest domestic water tariffs in Malaysia. The PBAPP had subsidised nearly RM 70 million last year to maintain the domestic water tariffs to be the lowest in the country at 31 cents for the first 35,000 liters per month.(Trade tariffs are not subsidised) This 31 cents is more than half the national average of 66 cents, with the most expensive water being Johor at 105 cents.
I wish to reiterate that families with 8 or more family members, shall be given a 60% discount on WCS beginning 1 May 2014. These large families will need to go to the 9 PBAPP offices in Penang and produce their ICs or other proof of family members to qualify for this discount. PBAPP CEO Jaseni Maidinsa shall be handling the mechanics or kindly contact the following.
Contact :Puan Syarifah Nasywa bt Syed Feisal Barakbah
Corporate Communications Unit
Tel     :04-201 3231
Email   :  This email address is being protected from spambots. You need JavaScript enabled to view it.

-- CN Version --









Contact : Puan Syarifah Nasywa bt Syed Feisal Barakbah
Corporate Communications Unit
Tel     :  04-201 3231
Email   : This email address is being protected from spambots. You need JavaScript enabled to view it.