Good afternoon ladies and gentlemen. It is my pleasure to address this luncheon in the presence of such highly influential business leaders. I would like to extend my appreciation to Mr Justin Wood and the Economist Corporate Network for putting this together.<\/p>\n
Businesses these days grapple with different challenges emanating from fierce competition, technological advances, socio-political changes, the degradation of the environment and unpredictable climate. Whilst these are challenging issues on their own, they are compounded by financial markets volatility induced by the monetary policies in the developed world and the slowdown in the Chinese economy.<\/p>\n
So, let me share with you some ideas that Penang is implementing in helping businesses cope.<\/p>\n
Firstly, my government believes that the role of the government is to stay out of business. This is because over a long period of time, we can see that the track record of government backed businesses has been dismal if not scandalous, for example Perwaja Steel.<\/p>\n
Besides, businesses that enjoy implicit or explicit government backing usually enjoy preferential access to markets and cheaper financing. This does not create a level playing field between the private and the government-backed businesses. Such unfair advantage will stifle the development of the private sector, thus preventing these businesses from realising their full potential. Ultimately, government backed businesses will crowd out of the private sector.<\/p>\n
Secondly, it is not enough for the government to only stay out of business. The government needs to create a conducive environment. Needless to say, my government is committed to making the bureaucracy more efficient, policies clearer and the infrastructure better. These are the crucial ingredients for businesses to invest and be competitive. The Penang government has made improvements in all these and will continue to pursue these relentlessly.<\/p>\n
Ladies and gentlemen, to move on to the next level of development, Penang recognises that high margin, high profitability and highly innovative businesses thrive in a balanced society. This is an environment where the society is intellectually creative, socially progressive, politically empowered, environmentally sustainable, materially prosperous and culturally vibrant.<\/p>\n
This is because in a balanced society, brilliant ideas, resourceful private capital and smart human talent can co-exist, reinforce each other and thrive. The closer we are to attaining a balanced society, the more we are going to attract talent, ideas and capital. With critical mass in all these, we can then be more innovative.<\/p>\n
The application of these ideas should not be limited to just Penang, because the challenges that businesses face are equally valid in other parts of Malaysia. As we know, Malaysia is stuck in the middle income trap. Malaysia cannot compete on technology with the likes of Koreas; and cannot compete with the likes of Vietnams on labour costs. Hence, Malaysia, like Penang, needs a conducive environment where talents, ideas, capital and businesses congregate and innovate to escape the middle income trap. This means that for a start, Malaysia needs to emphasise merit above other factors.<\/p>\n
In Penang, we have explicitly put this concept into action in the Penang Paradigm, the 10 years development plan for Penang. Apart from implementing business friendly policies, Penang is the first State to introduce the no free plastic bags policy and has implemented this policy throughout the year.<\/p>\n
Penang has also been consistently rated one of the top 10 most liveable city in Asia. And Penang generates the lion share of medical tourism receipts in Malaysia. George Town, being a UNESCO World Heritage Site, certainly has added an impetus to the historical and cultural vibrancy.<\/p>\n
All these are aimed at creating a balanced society so that more talents and businesses will come to Penang; and elevate the degree and intensity of innovation and creativity.<\/p>\n
Thirdly, the State government is determined to root out \u201cpublic enemy number one\u201d. In December 2013, the World Bank President Jim Yong Kim declared corruption as the \u201cpublic enemy number one\u201d. I cannot agree more. My government recognises the scourge of corruption and immediately upon taking office in 2008, we decided to award all State government procurement by open tenders to eliminate corruption.<\/p>\n
This policy is not only an anti-corruption drive but also we want to increase business confidence in Penang. We want businesses to know that in Penang, they operate in an environment where putting across the best idea and the most competitive bid will secure the project. Deals are transparent and are struck by merit; and not through corrupt practices.<\/p>\n
I am pleased to share with you that the increased business confidence is reflected in higher Foreign Direct Investment numbers. Penang has enjoyed an economic resurgence that has seen investments increase.<\/p>\n
Besides, my government is embracing transparency whole heartedly. All State exco members and State assemblymen must make public declarations of their assets.<\/p>\n
Lastly, as touched on at the start of my address, the financial markets are likely to get more volatile in the coming months due to tapering of quantitative easing in the US and the slowdown in the Chinese economy.<\/p>\n
Such external shocks cannot be brushed aside naively as Malaysia is an open economy. Whilst it is impossible for anyone to predict the financial markets at any point, it is important to remember that:
\n1) a rising tide lifts all boats; and
\n2) only when the tide goes out, do you discover who is swimming naked.<\/p>\n
So as the government in Penang, we believe in preparing ourselves for the future, for one day when the tide turns, we want to be the best clothed swimmer amongst our peers.<\/p>\n
Therefore, the Penang government has strengthened its financial position by establishing budget-based administration and governing based on the competency, accountability and transparent principles.<\/p>\n
As a result, we have recorded yearly budget surpluses and have reduced the state government debt by 95%. Indeed, we are praised by the Auditor General and singled out by Transparency International for our transparent open tender government procurement system.<\/p>\n
With all these, we hope that we will not only be in the best prepared position, but also being able to demonstrate that good governance is important to secure the confidence of others, especially the financial markets who might one day be wary of high public debts.<\/p>\n
Ladies and gentlemen, in conclusion, Penang understands businesses and my government is committed to providing the best environment for businesses to thrive. We know what have been holding Penang and Malaysia back from realising their full potential. So, the policies in Penang are equally relevant to Malaysia and Penang is certainly a model for Malaysia to emulate.<\/p>\n
The Penang government\u2019s policies have liberated the business environment and have induced businesses to invest and thrive. So businesses should welcome the implementation of such policies on a national level for the benefits will be multiplied many folds over.<\/p>\n
Thank you.<\/p>\n
—–Mandarin Version—<\/p>\n
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Good afternoon ladies and gentlemen. It is my pleasure to address this luncheon in the presence of such highly influential business leaders. I would like to extend my appreciation to Mr Justin Wood and the Economist Corporate Network for putting this together. Businesses these days grapple with different challenges emanating from fierce competition, technological advances, …<\/p>\n