Tuesday, 13 February 2007

Perak’s Future – Part II

The second part of Charting Future of Perak: Why Heritage and Technology Matter.

Policy Imperatives: Where are we now?

Before exploring further on the proper development model to unleash the economic potentials of Perak, it is instructive to look at where we are now. According to the recent 9th Malaysia Plan, Perak is currently ranked at 7 in terms of development. It has one of the lowest household incomes in the nation. At a mere 69% of national average, an average household in Selangor earns more than 2.3 times than that of a household in Perak. Having the second largest land-mass and third largest population in the peninsular, Perak only managed to capture less than 5.3% of the total investment in the country for the period 2001-2005. In comparison, Selangor’s total capital investment for the same period was more than four times that of Perak.

Overall, the growth of the state in 2001-2005 was at an annual rate of 4.1% and it is expected to increase to 5.9% in 2006-2010. The corresponding national rate was at 4.5% and is expected to be 6.0%. The implications from these figures are dire. If you are climbing a ladder and are slower than the rest, you could only remain in status quo by matching the speed of those above you. In order to gain height and close the gap, you need to climb faster. From the 9th Malaysia Plan, expectation is that Perak will neither be matching speed nor climbing faster – it will be climbing slower and languish further behind. From one of the wealthiest states of the nation, it is now one of the poorest. Clearly, something has to be done; Perak needs a winning development strategy.

The government recognises the need for Perak to have a key and internationally relevant industry to reconnect the state to the global economic network. Outlined in both the 2006 Perak Budget and the comprehensive 9th Malaysia Plan, the Information and Communication Technology (ICT) sector is selected by the government to be the sector that will shape the future economic landscape of Perak. Germane to both changing international economic development and economic needs of Perak, the direction towards the emphasis on the ICT sector is both laudable and pragmatic.

Specifically, Perak will be included in the Multimedia Super Corridor (MSC), which involves promoting a new MSC cybercentre in Perak. New areas are gazetted for ICT-oriented businesses and industries, as well as research and development for ICT, including for agricultural and biotechnology sectors. The ultimate aim is to turn Perak into a true cyber state, perhaps akin to Bangalore in India. If successful, not only will Perak, but Malaysia will benefits tremendously out of it.

In the 2006 Budget, the intentions for using ICT were articulated. It included “leapfrogging economic development by using ICT as an enabler and as a sector” and “managing all ICT programmes to focus on economic and social development”. Very notable intentions, but details on implementations and how these aims can be achieved remained relatively ambiguous.

Particularly, two important emphases were not well communicated. The first is on the issues of knowledge workers needed to make the plan successful. For a knowledge intensive industry such as ICT, the availability of talents dictates success more than fibre-optic lines and fancy buildings. To have a thriving knowledge city, the first ingredient we need are knowledge workers. India didn’t create an internationally competitive ICT sector from infrastructures first – that came later. It was the large pool of globally trained talents that made it possible Paraphrasing the message of our Prime Minister’s famous Harvard Club keynote address, there is very little point in having first-class ‘hardware’ if there is no equally good “software” to go along with it.

Realistically, to turn the Perak into a cyber state, we need a sizable pool of talents that is more than what Perak can offer now. We need to attract quality workers from other states and countries. One of the crucial ways this can be done is by having more liberal employment requirements which emphasise and reward quality of talent above everything else.

The second crucial emphasis is on the exact industry model that Perak is trying to achieve. The stated aims includes creating a ‘cyber city’ which is more of a commercial city with shopping complexes and shops, to having high-tech industrial parks for manufacturing based industries, to emphasising on research and development for biotechnology. Diversity is important, but there is a risk being “jack of all trades, master of none”. We need an anchor industry.

It is this that the remaining section will focus on.

… to be continued…

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