05 Jun Interview with Rt Hon. Chow Kon Yeow, Chief Minister of Penang State, Malaysia
What are some of the main achievements in the ‘Penang 2030’ program already, what are the four focus areas and what opportunities are you pursuing in the medium term?
When I took over as chief minister in 2018, I thought I should come up with a Vision plan to bring the State of Penang forward as one of the developed states in Malaysia. A while after I took office, we came up with this Penang 2030 Vision, aspiring to be a family-focused, green and smart state that can inspire the country.
Penang is the second smallest State in Malaysia, with a population of just 1.8 million, but in terms of social economic development, we can be proud that we are probably the top three states in terms of industrialization and economic development. I need to continue with the effort to develop Penang with this Vision “Penang 2030”, highlighting four major themes that we have to ensure they’ll achieve more balanced and holistic development while achieving economic growth and development. We must also not neglect social development. In Malaysia, interracial, inter-ethnic group disparity is a hot topic. We need to recognize what population we have.
Hopefully, by the end of the Penang 2030 Vision, we will be able to achieve some of the strategic initiatives under the four themes that come under the Vision. To increase livability to enhance the quality of life, looking into housing needs, municipal issues, welfare and care system and also diversify recreational sports, arts and other activities.
The next theme that we focus on is to upgrade the economy to raise household income. Disparity among various races is an issue that we focus on very much so that no ethnic groups feel marginalized by economic development. We have a history of about 50 years as an industrialized and manufacturing hub in Malaysia. We want to focus on advancing the readiness of local manufacturing industries for the digital age and green economy, to modernize our agriculture sector, create a variety of quality tourism products and to foster an ecosystem that nurtures creative industries.
We also focus on empowering people to strengthen civic participation. I found that in my many years as a State Executive Counselor, introducing many public policies and projects, it is important to engage the people, for them to buy in and accept this policy and to play their respective roles as well.
Another important aspect is to invest in the built environment to improve resilience. At the end of the first term as a Chief Minister last year we announced that we had achieved about 47% of the Vision initiative and we will continue to work towards a better performance with regard to the previous strategic initiative. It is not easy to get all the government machinery and the civil servants to buy in, with the industry, the economic sector and civil society community-based organizations.
We try very hard and there’s always room for improvement. Hopefully, by the end of this term I will be able to lay a stronger foundation for Penang to propel to the next level of development.
The Penang South Island (PSI) project is one of the flagship projects on offer in the region. Could you share more about the vision for PSI, how smart city concepts are being integrated and how investors can get involved?
The Penang South Island initiative started in 2015 as a financial model to support the implementation of the Penang Transport master plan projects, including the light rail transit project. It is a very challenging and difficult process because it is a reclamation project and people are very concerned about the environmental and ecological impact of such a reclamation project. All the more, because it is a government project, we have to ensure that we comply with all regulations, all laws and obtain all necessary approvals and permissions before we can embark on this reclamation project. The Prime Minister has requested us to scale down the reclamation project from three Islands to one island.
We have already started reclamations since October last year. Probably it would take six to eight years to complete 2300 acres of the first island which we now name the Silicon Island because Penang is known as the Silicon Valley of the East due to our semiconductor and sector here which started 50 years ago. The purpose of the island is to see a continuation of the electrical and electronics products sector in Penang. Out of the 2300 acres of the island, we have about 700 acres for a green tech park which is well planned. We would want to attract high-technology companies, global business services and a software hub to come to this island. We would be able to attract a higher category of investment to create high-value jobs. That is one of the objectives that we hope to achieve: the continuation of Silicon Valley; the Silicon Valley of the East 2.0. We want to upscale it further so that we can attract some of the best companies in the world to come and invest and be a synergy to bring other economic development as well.
From the very beginning, we acknowledge that any development project, in particular a reclamation project, would have an environmental impact. That’s why we have to obtain the environmental impact assessment approval which requires the government or any project developer to take remedial action to minimize the environmental impact of the project and also to ensure that the natural habitat and the ecology are given due attention.
Regarding the fishermen community, as part of the social impact mitigation program, we have not denied them access to the sea because the island is reclaimed 215 meters away from the shore, so there is a waterway. In fact, before the reclamation, it was shallow water and sometimes fishermen can only come in and go out during high tide situations. By carrying out this project and the dredging activity and giving them new boats and new engines, we ensure that they can continue with their fishing activities and they will not be deprived of their income. The reclamation provides additional job opportunities. We provide them with training as well, we look after the interests of their children by looking into their educational needs. We acknowledge it is a very sensitive project environmentally, socially and even politically. We recognize we need to address these issues so that this would become a project that can provide opportunities to all the people living around the vicinity.
Penang is at the heart of Malaysia’s flourishing tourism industry and attracted 6.9 million visitors in 2023. What role do you see tourism play in not only stimulating economic growth in Penang but also creating inclusive opportunities to help diversify the economy?
In Penang, we have a twin-engine of growth. One is manufacturing and another is the services sector, including tourism and each occupies equal importance in our economy. Tourism and manufacturing have been driving up the economy for the past 50 years. We were doing relatively well before the Covid pandemic struck but we recovered soon enough after the opening of the national and international borders. We had many direct international flights into Penang from other Asian destinations, from Korea, Japan, China and even from the Middle East. Since the recovery, we have been able to add many direct international flights to Penang to encourage more international tourists.
Before the arrival of international tourists there were and there are domestic tourists as well. Malaysians from other states and other regions of the country also come in big numbers to visit Penang, which has always been one of the top tourist destinations in the country. Domestic tourists also are very important to ensure that the tourism sector rebounds quickly after the pandemic. We are happy to see that, besides manufacturing, tourism is another important sector for us to nurture and grow. Of course, we are also mindful that tourists can be a nuisance as well in the sense that they create traffic jams and so forth, but we have to manage it so that our tourism can be sustainable as well.
With our audience of American tourists, businesses and investors interested in exploring new opportunities, how are you engaging with international audiences and partners in countries like the USA to promote Penang?
One of the reasons we are having this conversation today is the interest in Malaysia, in Penang, because of the geopolitical situation in the world today, the “China Plus One” strategy and the disruption to the supply chain. All this makes our investors look beyond their home country.
Many investors from the US and Europe want to relocate their manufacturing facilities, either to be nearer to their customers, nearer to the supply chain or to open up new potential markets. Coupled with the China-US trade war, it created disruption to the supply chain. As a result, we received a lot more inquiries. Malaysia and Southeast Asia benefited from this disruption. Investors are looking at how they can re-strategize their supply chain.
Malaysia is one of the countries that has started industrialization much earlier than our neighbors. In Penang, in particular, the semiconductor industry and E&E sector has been here for many years now and we have the right ecosystem, supply chain and support from small and medium enterprises. We have a talent pool to support this investment.
Penang and Malaysia have very strong historical ties with US investors. Many US investors have been here for the last 50 years. They continue to be here through their expansion plans and also to be a testimony to other investors that Penang is a preferred place, a preferred location, for investment in particular in the semiconductor and E&E sector.
With Penang State looking to support 500 tech startups by 2030, what opportunities exist for partnerships and investment in Penang’s digital economy?
The digital economy is a sector that the national government and all the State governments are trying to promote. The national government is giving out a lot of incentives to attract investment in this area. In terms of infrastructure, there has been an initiative to improve and roll out 5G connectivity throughout the country and we are achieving great progress. I believe that by the end of the year, the whole of the country will see 5G connectivity.
We are also promoting startups in the digital economy. We have a strong foundation in manufacturing but to ensure we grow and upscale the economy, it is important that we also diversify into technology-related sectors. We can leverage on the strength that we have to encourage startups in probably R&D activity and IC design. All this would strengthen and deepen our economy so that we would be able to withstand changes in the world economy, be resilient and diversify so that we don’t put all the eggs into one basket. As a whole, Malaysia leads in this digital economy. Penang would also be able to tap into these policies and incentives to grow our state economy as well.