Malaysian Prime Minister Abdullah Badawi is happily announcing one mega development project after another, e.g. the Iskandar Development Region (IDR), Northern Corridor Economic Region (NCER), and other billion Ringgit projects like the Trans-Peninsular Oil Pipeline and various railway projects etc.
It is easy to come out with a plan, but lots of questions remain uncertain… is it feasible to work on all those mega projects at the same time? Are Malaysians capable of funding the projects ourselves? How are we going to attract foreign investments? Who are going to benefit from the projects? What will happen to the projects if another economic crisis strikes Malaysia again?
Do we need these projects?
Perak state government has spent millions if not billions to develop various industrial areas over the past two decades; most of those areas are pretty much wasteland now. It is easy to draw a plan and build the infrastructure, but what happen if we could not attract people to invest at those areas?
AFAIK, MSC is not yet a success. There are still plenty of empty slots in Cyberjaya and Putrajaya; and from the current rate it seems that their potential will not be fulfilled any time soon. So, what makes the government think that we are able to fill in the ‘blanks’ for IDR and NCER?
Another good example is the Port Klang Free Zone (PKFZ); introduced in 2004 but not moving in any direction at the moment. Do we really need all these development at the first place? Where are the investment coming from? What’s the forecast? What’s the Plan B?
Who is going to benefit from the development?
People from north and south might be happy that they are not marginalized by national development projects, that they are at last getting some fair treatment from the BN government.
One good thing that I see from NCER is that agriculture is part of the plan. I am not sure if the small plantation owners and the small farmers are going to benefit though… I hope their businesses are not taken away by conglomerates instead.
The 1st group of people that will benefit from the plans are probably the land owners… follow by the foreign labours. The construction work will demand lots of workforce, but I doubt many Malaysians would want to work in the tough environment. Besides, the construction firms would probably hire foreign workers straight away without giving much chances to local labours.
I guess they will be another surge of foreign workers coming in… and it’s always easy to get them in and not easy the other way around; more social problems are coming ahead of it’s not handed properly.
The transparency of the government contracts will also be in question again. Will there be open tenders for government contracts, or will the money be going directly to the pre-selected companies? Even if there’s open tender for the contracts, will it be fair and square?
For common citizens, the IDR and NCER are supposed to create lots of working opportunities in long run if it’s successful as planned. We’ll see how it goes.
Private Finance Initiatives (PFI)
Lots of the projects will be funded by Private Finance Initiatives; two-thirds of the NCER’s RM177 billions investment will be funded by the private sectors, that’s ~RM109bil alone for NCER.
How many investors in Malaysia are capable to support all those development? In the end it’s likely that government-linked companies like Petronas etc. that are going to dump out large sum of money to fund the projects… should we still call these PFI if it happens?
Again, the Port Klang Free Zone is a good example of the failure for PFI funded projects… and seems like our government might be forced to bail out the project. To make it worse the issue is turning into a huge scandal, which reminded us of how easy these mega projects could be turned into mega corruption schemes.
I felt that the projects are losing cutting edge to attract massive foreign investments. I don’t think that IDR and NCER will attract new group of foreign investors… those investors that want to come to Malaysia will come regardless of the new development; they will find a place that is already developed if they want to and we are already providing enough options for them.
On contrary I think the IDR and NCER might be pulling opportunities away from other Malaysia region. In fact the IDR and NCER might be crashing with each other instead, and in this case competition is not necessary a good thing.