Unleashing Potentials

Malaysia

Economic News

22 Jul 2010
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The Malaysian government recently launched the Northern Corridor Economic Region (NCER) aimed at developing a traditionally poor region of the country. The stated aim of the $50.6bn initiative is to make the northern corridor a world-class economic region by 2025 for people to invest, live, work, learn and visit.



Malaysia's northern corridor comprises the states of Perlis, Kedah, Penang and Northern Perak, and is inhabited by 4.3m of Malaysia's 27m people. According to government statistics, 17% of the nation's households live below the poverty line and 29% are considered 'hardcore poor households'.



Through the NCER, the government hopes to create 500,000 jobs by 2012 and 1m by 2018, making the project part of an overall move to promote balanced development across the country.



Of the $50.6bn of projects to be undertaken, two thirds will be financed by private sector investment.



The NCER is the one of four economic corridors that are part of the government's 9th Malaysia Plan. The Multimedia Super Corridor, located in the Klang Valley, in the capital region, is focused on turning the area into a centre of excellence for knowledge and IT based enterprise. The Iskandar Development Region (IDR), focused on the southern region of Johor, aims to turn the area into a hub for international manufacturing and service based investments. Finally, the Eastern Corridor (EC) development plan, encompassing Kelantan, Terengganu and Pahang, is expected to be unveiled by the end of the year with an emphasis on the petrochemical, handicraft and tourism sectors.



The government emphasised that the NCER will be different from the high profile Iskandar Development Region (IDR) project - unveiled earlier this year. Prime Minister Badawai said, "While the IDR was about huge mega developments, the NCER is about unleashing the potentials that already exist."



Another significant difference between the NCER and the other corridors launched to date is that the task of drawing up the master plan and blueprint has been awarded to Sime Darby, a publicly listed company. The other two prospects - the IDR and the EC - are being overseen by the government investment arm, Khazanah Nasional, and Petronas, the national oil corporation, respectively.



Sime Darby is one of South East Asia's largest conglomerates, with plantations, property, heavy equipment, motor, and energy & utilities as its core businesses. The company has successfully expanded into Singapore, Hong Kong, China and Australia.



Sime Darby Group CEO Ahmad Zubir Murshid justified the selection of his company stating, "We are a regional player that has successfully invested overseas. You are looking at a 'foreigner' coming back to invest in Malaysia.We believe that the government has given us the confidence. It is also in the sense that Sime Darby is a conglomerate and we have vast experience in agriculture."



The NCER has identified four growth sectors, with the thrust of the programme focusing on the transformation and expansion of the logistics, agriculture, manufacturing, and tourism industries. If Malaysia's northern corridor has resources and potential, the launch of the NCER will facilitate the unleashing of this potential, bringing the region to greater economic prosperity on par with that of the national level.

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