The impressive flow of foreign investments into Penang in recent times tells us undeniably that the state has things going for it. Most notably, it seems able to compete well for investments that do not feel comfortable being in China. Multinational corporations (MNCs) today are known to implement a “China + One” strategy, putting money into a secondary site to offset the disadvantages China suffers from. Penang benefits from this. But not all is going well. Among Malaysia’s major weaknesses is the lack of soft skills, and the culprit is more often than not, identified as the education system.
TO A FIRST-TIME VISITOR Penang can feel like it’s stuck in a time warp, caught between its colonial trading past and electronic manufacturing heydays; sandwiched between upper-tier cosmopolitan cities like Singapore and Shanghai and aspiring wannabes such as Phnom Penh and Ho Chi Minh City. According to the experts, the middle ground is a bad place to be – middleincome, middle-of-the-road, midlife crisis… The middle is not a destination but a pit-stop on the way to a high-income society, to moving up the value-chain and other aspirations. Or it can be the turning point for the journey downwards.
Penang may have established one of Asia’s first Free Trade Zones (FTZs) but now it has noisy neighbours muscling in, offering more manufacturing bang for less bucks. When it comes to brain power, Penang doesn’t even have the juice to meet the juggernauts of Singapore, China and India head on. Is it game over for the little island that could?
