By Lim Guan Eng.

PROGRESS! That’s what most people wish for. But real progress, progress that sees impressive improvements in the quality of life for everyone, cannot take place only at the personal level.

It has to happen at the social level as well.

That’s why you need politicians! And you need the civil service, you need the businessmen, you need the thinkers, you need the NGOs, and you need the people.

Now, no other state in Malaysia has done more than Penang in pushing itself forward. Penangites have worked hard for two centuries, and they have survived.

But surviving is not enough. Surviving is not the goal. What we need to do today is to put brains and muscles together to achieve a prosperity that transforms Penang from a sweat shop into a smart shop.

Once upon a time, not long ago, Penang was already a Brand Name that was instantly recognisable abroad. Penang’s progress signaled the coming progress of Malaysia.

Penang was ahead of other states. It was the state that defined Malaysia’s future.

But I am sad to say this so openly to a room full of proud Penangites: All that was a long time ago.

We have gone backwards since then. Do you know that Penang family incomes increased the least among all the states over the last ten years? I repeat, all the states, including Sabah and Sarawak!

Between 1999 and 2004, Penang family incomes grew by 2.5% annually, while the average for the whole country was 6.6%!

In 1999, our income was 85% of what people in Selangor were making. Only five years after that, in 2004, we are only 68% as rich as those same people in the Klang Valley.

Penangites have not only been losing in relative income; we have also been losing our relatives. Now, even if you do not trust statistics, you have to agree that Penang families have been sending their sons and daughters abroad, down to the Klang Valley, down to Singapore, and out into the great wide world.

These young people had to leave because there was a sorry lack of opportunities for them here at home.

Our talents leaked away, and one can imagine the family heartache behind every such leakage. It is because of the failures of the past that I am elected as the surprise choice of Penang Chief Minister.

Looking ahead, it is critical to reverse the trend. That is the point of this conference, and of many others like it that we are planning for the near future.

Before we act, we have to discuss things. We have to plan, and we have to visualise what the future is to be; and we have to visualise the path we have to take to get there.

And that is why we are gathered here today. The Penang Outlook Forum represents one further step towards creating a blueprint for the reshaping of Penang, a process already begun in many ways.

We will use the ideas aired over the next two days to decide the next steps to take to bring change to Penang. These are the first steps towards a Penang Blueprint, towards turning Penang into an International City and State.

We have been there before. We have had experiences with globalisation for over 200 years! Penang has the resources it needs to transform itself. I am sure you agree with me on that point.

But there is one thing I must stress this morning: we are not transforming Penang simply for Penang’s sake. Transforming Penang into an International City and State is simply the first step in our long-term strategy to transform Malaysia as a whole.

That is our vision – making Penang a model for others to follow.

We need intelligent and experienced people to realise this blueprint. This is why this Forum has brought together some of Penang’s smartest people, sons and daughters of Penang who are based either locally or overseas, who can help us define what this new blueprint should be.

Most importantly, this blueprint must rest solidly on a local system that is properly regulated and monitored, one that is transparent so that neglect and incompetence cannot hide within it.

Such a structure depends on certain cornerstones being properly laid.

The first cornerstone is the quality and integrity of the political leadership. Clean, efficient and effective governance must always remain our practice and our goal.

This must be a distinguishing factor of Penang as an International City and State.

Hence, change starts with a change in the substance of the political leadership and the state institutions.

The second cornerstone for our transformation is the economy. The economy of an International City and State will simultaneously be competing in and complementing the global economy. Penang’s economy must be ready to rise to the challenge.

Cities and entire regions are locked in stiff competition with one another today, creating a multi-layered playing field. If Penang wants a leading role in this new economy, it must restructure its economy accordingly.

The present crisis is affecting all nations big and small, developed and developing. But the dark cloud has a silver lining. It is during moments like this that we can seriously rethink old economic models and reassess our own capabilities. An economic restructuring could endeavour to free us from our exports-dependent role, and bring a healthy diversification to our economy.

A restructuring must boost local employment opportunities, raise the median income level and disposable income, and lead to greater purchasing power for the people of Penang.

Penang has been in the so-called middle-income trap, bordered on one side by low-cost competitors in poor countries who are competitive in mature or sunset industries and on the other by high-wage innovators in rich countries who are competitive in new or sunrise industries.

To get out of this trap, we need a new holistic approach that links Penang’s unique logistic position, its scenic beauty, rich and cultural heritage, social harmony, even good food with our talented human resources and strong work ethic.

The third cornerstone is definitely the most important one in the long run – the development of Penang’s human capital.

International Cities may boast high-tech and Space Age infrastructure, or obscene material wealth, but to be truly successful they must have one important resource: a dynamic and happy people.

To attract talent, Penang must be seen to be an attractive enough place to call home. It must be a great place to work, and a great place to live. Now, cities like New York and Tokyo may be expensive places to live in, but it is in those cities that human talents are allowed to thrive. That is why they continue to be talent magnets.

If we want to attract new blood to Penang, the environment here has to change as well. There must be a good environment where people feel comfortable expressing themselves, artistically or otherwise.

We must have healthy income levels in order to make their relocation here worthwhile. There must be affordable housing, good infrastructure, efficient public transportation, and good public services in general. Only then can we consistently revitalize our human and other precious resources.

And not only do we strive to train and retain local talent, we also want to bring in NEW talents to Penang. Penang needs to change for that purpose, too. Nothing kick-starts change faster than bringing in fresh new blood with new ideas and energy, and adding them to a growing talent pool.

To recap there are eight key measures that we need to look into:-

1. Institution building has been identified as the source of growth and there is a need to respect rule of law and good governance based on CAT (competency, accountability and transparency);
2. A sound education system promoting a culture of excellence that is relevant to the demands of industry and economy. Emphasis naturally centres on ICT and computer knowledge. To facilitate the creation of more computer literate knowledge workers, Penang has launched a new initiative to be the first wifi state in Malaysia where wireless services will be provided free and wimax at affordable rates in two years time;
3. A civil society encompassing the triple transformation of political transformation to achieve political equality, respect for human rights, supremacy of people’s power and democracy; economic transformation that provides equal opportunities and relies on the energy, expertise and enterprise of our human resources; ethical transformation that establishes integrity in public life, checks corruption and pursues socio-economic justice of an equitable share in the economy’s prosperity;
4. Encouraging creativity, innovation, research and development with new ways of thinking and new ways of doing things;
5. Establishing international benchmarks that makes development sustainable – where resources that are used today in a manner that are still available for our future generations. Penang was voted as the 10th most livable city in Asia amongst 254 cities throughout Asia;
6. Trusting in the ability of any state’s greatest resource – our human resources by investing in retraining and human development;
7. The need to reinvent government towards a government that works better but cost less. The explosion in the number of civil servants and public spending on the civil service without a corresponding rise in quality of services requires the adoption of best business practices. Such spending must be curbed not only to increase savings but ensure a value for money approach where as long as the civil service approaches international benchmarks they shall be provided with international rated pay scales;
8. Adopting a public-private partnership model of a win-win formula where public interest is upheld without sacrificing the private sector’s necessity for profits. Open tenders and capping the private sector profits at a reasonable rate of return will ensure the protection of public interest without sacrificing efficiency and productivity.

A Penang Blueprint based for sustainable development based on eight key measures on government, economy, society and environment to transform Penang into an international city. A blueprint only describes to us what can be a workable system. No matter how well crafted it is, it is only as good as the results it actually produces. This is the litmus test the Penang Blueprint must pass.

We must be innovative in all four areas simultaneously if we are to succeed. And the only way to do that is for us – all of us – to be stakeholders. We need smart and willing partnerships across the board. Let us begin this labour of love for Penang as equal partners where we learn together, grow together and enjoy the fruits of our labours together.

** Republished with permission. This was the opening speech made by Chief Minister Lim Guan Eng to officiate the Penang Outlook Forum 2009 on June 1. Entitled “Restructuring and Reshaping Penang”, the forum aimed at providing a platform for assessing Penang’s past achievements, present capabilities and future growth potential. The forum was jointly organised by the Socio-Economic & Environmental Research Institute (SERI) and the Institute of Southeast Asian Studies (ISEAS) Singapore, in collaboration with Penang Development Corporation, InvestPenang and Khazanah Nasional Berhad.

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