PRESS STATEMENT BY DATO’ SERI LEE KAH CHOON
11 JANUARY 2021
GEORGE TOWN, PENANG
Opportunity Amid Adversity: The Task Ahead for Penang in 2021
As we embarked on the new year, we continue to see challenges that have lingered on from 2020. Yet, we also see opportunities. This outlook is premised on the following:
1) The Covid-19 pandemic
While inoculation is available, there are still a multitude of issues that have yet to be settled, pertaining to the vaccines’ efficacy, the ability to scale up production, distribution logistics and priority of vaccination, to name but a few.
In the meantime, the speed of transmission is escalating unabated and new strains of the virus are emerging, raising concerns over the efficacy of the existing vaccines against the new strains.
In short, the following trends will continue, at least through the first half of 2021:
- Closure of international borders;
- Sluggish economic activities;
- Periodic disruptions to manufacturing production; and
- A deferment of direct investments.
2) US-China Trade War
Despite the transition in the US Presidency, the US-China trade war will continue, and potentially escalate with a more coordinated response against China from the industrialised world.
Meanwhile, China is likely to maintain its stance, and not allow its domestic policies and national security to be dictated by industrialised nations. China will continue to forge ahead on her own and the decoupling of the world economy will accelerate.
Against this backdrop, we are cognisant that the trajectory of the recovery will largely depend on policy responses. Toward this end, we must quickly adjust to the structural changes brought by the pandemic and geopolitical tensions, and look to capitalise on emerging opportunities for a sustainable, long term recovery.
The Covid-19 pandemic and US-China trade war have triggered a shift away from prioritising cost cutting manufacturing, in favour of practices that ensure reliability, consistency and security of supply. This, in turn, has prompted corporates to diversify their geographical footprint, including into locations such as Penang. Concurrently, the current trade and geopolitical dynamics have also created opportunities for Penang-based companies to penetrate supply chains that were previously closed to us, as well as emerging business blocks that were previously monopolized by multinational companies.
In all of this, time is of the essence. The State will need to capitalise on this new wave of opportunities, or face losing out to other countries in the race to fill the gap. And to ride the wave, we need talent.
The way forward
Penang will continue to focus on strengthening its competitive edge to attract high-quality foreign and domestic direct investments (FDI and DDI).
It is already well-established as a thriving, regional manufacturing hub for global companies in the electrical and electronics (E&E), automation and E&E-related equipment, and medical technology sectors. In addition to housing elite foreign corporations, Penang also boasts numerous homegrown companies that are thriving on the international stage.
This success is attributed to the State’s robust supply chain, good infrastructure and conducive living environment. Equally important is also the State’s high-quality talent pool, which is essential to further propel its advanced manufacturing and knowledge-intensive service sectors. With this in mind, to enhance Penang’s comparative and competitive advantages, the State will embark on a massive drive to grow its talent pool and increase its population of knowledge workers.
The availability of qualified talent is a critical factor in attracting FDI and DDI, and the State’s success in attracting strategic investments translates into thousands of new, high-quality job opportunities every year. This has made Penang the talent magnet in the northern region, mitigating the “brain drain” and loss of talent to other countries.
Nurturing talent pool is Penang’s utmost priority in 2021, and the State Government will endeavour to identify, nurture and develop local talent, and the economy, to its fullest potential.
DATO’ SERI LEE KAH CHOON
Special Investment Advisor to the Chief Minister of Penang