By Lim Guan Eng, Secretary of the DAP

Penang captured RM 3.1 billion in investments until May 2014, up from RM3.9 billion for whole year in 2013. Up to May 2014, Foreign Direct Investment(FDI) into Penang’s manufacturing sector amounted to RM2.34 billion, up from RM1.8 billion for whole year in 2013. However this MIDA’s figures of FDI of RM2.34 billion does not include Seagate’s RM 1.05 billion investment which I had announced 2 days ago.

As Penang is undergoing high income economic transformation; our focus is on sustainability to remain competitive in the long run. The state remains attractive to high technology and innovation based investors and there is a gradual trend of investors moving their higher knowledge content jobs especially research and development and design. Three to four new projects in the state will be announced in the course of the year which may not be recorded in MIDA investment figures.

In the process of moving up the value chain, there are expectations of lower value-added jobs made redundant and re-locating to lower labor cost countries. These are unavoidable industrial structural changes. There is also a surge of Shared Services Outsourcing or SSO investors in Penang – such as Wilmar, CitiGroup, Air Asia, IHS, First Solar Global Service and TOLL which offers high-income and high-value jobs to locals during the last 2 years.

Even though investments by SSO industries are not captured in MIDA figures, this industry provides average net salaries of RM5,783 per month (according to MDEC, 2014) versus average RM2,786 per month in manufacturing sector (according to DOS, April 2014). This sector currently employs over 7,000 jobs.

The Penang state government had signed a RM11.3 billion joint-venture agreement with Singapore’s Temasek Group to carry out the Penang International Technology Park in Batu Kawan and BPO projects in Bayan Baru that will create 21,000 high-value jobs.

Also not captured in the MIDA figures are investments in six new hotel projects with an approximate gross development value (GDV) of RM693mil materializing on the island between 2014 and 2017 (Malaysian Hotels Association, Penang Chapter). Using the multiplier factor of 4.75, 1,157 new hotel rooms is estimated to create 5,500 new jobs in accommodation and food services activities in next 3 years.