MAY 10 — In just four years, seven multinational electrical and electronics (E&E) factories have shut whereby 5,245 employees have lost their jobs while foreign direct investment fell sharply from RM10.81 billion in 2017 to RM5.78 billion last year. This plunge should give Penang a wake-up call. However, not only does Chief Minister Chow Kon Yeow not face up to the problem or actively invite other investments, he also ignores this investment freefall. With foreign investments departing with the closure of factories, the once renowned Penang electronics now turns into a sunset industry, Penang is left no longer attractive.
Since 2015 to March this year, seven multinational electronic plants have ceased their production lines in Penang or moved their production lines to other countries, resulting in 5,245 employees being laid off or accepted voluntary retrenchment. Apparently Penang has lost its appeal and its status as the “Pearl of the Orient” has been eclipsed.
Policies under the new Pakatan Harapan government are not pro-business, thereby undermining Malaysia’s wage growth and investments. These unfriendly policies, increase in foreign worker levy, insurance policies for foreign workers have increased the cost of doing business for local employers. Such conditions also resulted in the private sector being particularly caution in reviewing employee salaries or making new investment decisions. Additionally, the business community also faces many challenges. Uncertainties over policy trends also led to people being more cautious in their spending.
Foreign direct investment (FDI) in Penang was once ranked highest in the country. The then Chief Minister Lim Guan Eng and the DAP government showed some eagerness to attract investments. However, according to FDI figures released by the Malaysia Investment Development Authority (MIDA), Penang’s FDI from 2010 to 2013 fell by 82%. Presently, for the fourth consecutive year, seven multinational E&E factories have closed, resulting in 5,245 workers being unemployed. Penang’s ranking for FDI in the country also fell from the first spot to the fifth position.
Moreover, MIDA’s statistics also revealed that investments into Penang’s manufacturing sector in 2018 was RM5.781 billion, down 46.54% from RM10.814 billion in 2017, a dive by nearly 50%.
In Penang’s Industrial Free Trade Zone, Chief Minister Chow Kon Yeow sadly shirked responsibility. On the issue of FDI withdrawal, he responded that this was a “normal situation.” The Penang state government sadly refuses to own up to the fact that FDI has been continuously withdrawing from Penang, causing this northern state to lose its shine.
* Datuk Tan Teik Cheng is the MCA Penang State Liaison Committee Chairman and MCA Vice President.
**This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.