economic corridor development for competitive and

Economic Corridor Development for

Competitive and Inclusive Asia

“The Experience Of Northern Corridor

Economic Region (NCER)”Putrajaya, Malaysia

23rd August 2016

By: Hasri Hasan, Northern Corridor Implementation Authority

(NCIA)

What is an economic

corridor?

• Connects economic

agents along a defined

geography

• Connects economic

nodes or hubs, usually

centered in urban

landscapes

• Links supply and

demand markets

Stemming from RMK-9 (2006 – 2010), 5 Regional Corridors

were established across Malaysia between 2006 – 2008 to

address uneven development across the nation

5 Economic Corridors Were

Established In Malaysia

Regional Economic Corridor

initiative commenced

RMK-9 (2006-2010) RMK-10 (2011 – 2015) RMK-11 (2016 – 2020)

Focus on selected clusters

based on geographical and

sectoral advantages

Accelerating regional growth

for better geographic

balance 2

Why

Corridors?

Boost economic potential by providing

important connections between economic

nodes or hubs

3

Address uneven social development across

the country and create positive impacts for

society by boosting job creation, increasing

living standards, accessibility to healthcare,

education, etc.

Close the urban-rural skills gap by raising

the levels of productivity and use of new

technology in less developed areas

1

2

3

The Corridors Are Designed To

Achieve Balanced

Socioeconomic Development

Regional Corridors Are Strategic

Enablers To Enhance

Inclusiveness

4

Source: RMK-11RM174.5 bil investment realised

and 427,100 jobs created up to 2014

NCER Envisions To Be A World-

Class Economic Region Of

Choice By 2025

5

KEDAH

PERAK

PERLIS

P.PINANG

KEY THRUST AREAS

AGRICULTURE

MANUFACTURING TOURISM

LOGISTICS

Support Eco-System

Social Development

ENABLERS

Human Capital Development

NCER Vision

To be a world-class economic region by 2025 for

people to invest, live, work, learn, visit and bring up

families in a safe, clean and sustainable environment

NCER is a Brownfield area that leverages on the

strengths of its economic activities

Total area: 32,315 km2

Population: 6.5 mil (2015)

NCER Is A Key Socio-economic

Powerhouse & An Important

Corridor In Malaysia

6

A Regional Approach To

Economic Development

7

Agriculture

• Leverage on the region’s biotechnology expertise

• Implement the Shared Value Concept

Manufacturing

• Augment the region’s support eco-system

• Opportunities for local private sector participation

• Value-added opportunities from private sector (eg BPO)

Tourism

• Develop key areas (Langkawi, Health Tourism, Taiping Bandar Warisan and the Belum Temengor area)

• Implement the Shared Value Concept

Logistics

• Move activities up the value chain

• Leverage on the region’s experienced trade network

• New logistics initiatives to augment connectivity

The responses

instituted by

NCIA had to be

tailored to the

unique value

propositions of

the region

The Role Of Regional Corridor

Authorities As Set Out In 11MP

8

Enhancing inclusiveness towards

an equitable society

• Efforts will be implemented in collaboration with

regional corridor authorities to provide a more

conducive business environment to attract higher

value added investment to rural areas.

• Regional corridor authorities will continue to spur

economic growth to address inter-and intra-

regional imbalances and increase inclusivity.

• Regional corridor authorities will continue to

accelerate investments by enhancing facilitation

for investors, improving connectivity and mobility;

and intensifying R&D and commercialisation.

Encouraging more

private investment in

rural areas

Accelerating regional

growth for better

geographic balance

Focus Area

D of 11MP

Regional corridor

authorities will facilitate

investors to ensure

committed investments

are realised.

1

This investor facilitation

model will ensure that

authorities continue to

facilitate investors once

businesses are in

operation, to address

implementation issues

and encourage future

reinvestment.

2

Focus Area

D of 11MP

Realised Investment

Job opportunities

Key Outcomes

Setting Up Northern Corridor

Implementation Authority

99

NCIA’s Mandate:

Created under Act 687,

NCIA is mandated to

drive regional strategies

in the context of the

Government’s economic

development agenda

Minister in

The PM’s DepartmentDeputy

PM

Chief

Secretary

Menteri Besar

of Perak

Menteri Besar

of Kedah

Chief Minister

of Penang

Menteri Besar

of Perlis

Prime Minister

Of Malaysia

(Chairman)

CEO,

Sime DarbyDeputy Chairman

Khazanah

NCIA As A Regional Enabler

10

NCIA’s Objectives

To accelerate the growth of

Koridor Utara to be a world-

class economic region of

choice for investment, work,

living and learning by 2025,

through the agenda of

Growth with Social Equity

NCIA’s Role as a recognised ‘Regional Enabler’

NCIA has been positioned by numerous Government

Ministries and Agencies (including State and Local

Governments) as a regional enabler for their

respective programmes focusing on high impact and

catalytic initiatives to drive the growth of the economic

sector

Plan Promote Facilitate

• Identify and develop strategies

to drive the sector through the

development of required

enablers and social

infrastructure

• Undertake broad-based

promotion to attract investors

for the growth of the sector

• Act as the principal

coordinating agent and

monitor the progress of the

sector.

• Facilitate investors to ensure

committed investments are

realised.

1 2 3

What The First Phase Entailed:

A Regional Approach To

Economic Development

11

• Phase 1: 2007 – 2012

Secure anchor investors and

build priority infrastructure

• Phase 2: 2013 - 2020

Broaden private sector involvement,

including establishing networks of

businesses, foreign and domestic

linkages

• Phase 3: 2021 – 2025

Achieving regional leadership

via sustainable, market-led growth.11

The First Step – Enhancing

Connectivity

2

3

1

1 Upgrading of Penang

Airport

RM250 Mil.

2 2nd Penang Bridge

RM4.5 Bil.

3 Rail Electrified Double

Track

RM12.5 Bil.

These developments have

caused a change in regional

dynamics

RM 17.25 Bil. infrastructure investment by Government on big ticket infra items

Legend:

Airport

Bridge

Rail Line

12

What The Second Phase Entails:

Embarking on Phase 2

13

• Phase 1: 2007 – 2012

Secure anchor investors and

build priority infrastructure

• Phase 2: 2013 - 2020

Broaden private sector involvement,

including establishing networks of

businesses, foreign and domestic

linkages

• Phase 3: 2021 – 2025

Achieving regional leadership

via sustainable, market-led growth.13

14

KEDAH RUBBER CITY

23,244

Job opportunities

created as of

2030

RM57.4b

Economic impact

up to 2030

14,471

Job opportunities

created by 15th

year

RM14.7b

Total GDP in 15

years

LEMBAH CHUPING

12,674

Total number of

jobs created as

of 2025

RM2.58b

GNI contribution

per year as of

2025

GREATER KAMUNTING

RM30.5b

Total

investments by

2030

109,000

Job opportunities

created by 2030

RM12.96b

Total GDP

contribution by

2030

90,263

Job opportunities

created by 2030

KORIDOR

UTARA

PHASE 2

(2013-2020)

New Growth Nodes

Enhanced elements

of inclusiveness

KEDAH SCIENCE & TECHNOLOGY PARK

WILAYAH PERAK SELATAN

Phase 2: The Implementation

Of New Growth Nodes

Three Clusters To Promote

Chuping As A “Green Valley”…

15

Solar Energy

Generation

Green

Manufacturing

(Green Materials

& Green E&E

Manufacturing

Halal Industries

Automotive Industrial

E&E Property

There are varied industry applications

for Green Materials

Perlis exhibits high levels of solar radiation

There has been growing international

demand for halal products

Average Annual Solar Radiation

in Malaysia (MJ/m2/day)

0

20

40

60

80

100

120

2010 2013 2020

RM

billio

n

Malaysian Halal Exports 2010-2020e (expected)

(CAGR)

~ 12.9%

(CAGR)

~ 16.3%

Total Area of Lembah Chuping 2,481.91 acres

1

2

3

Rubber City - To Elevate The

Global Competitive Position Of

The Malaysian Rubber Industry

16

The areas in which the Rubber City is

proposed to be built currently has

minimal existing economic activity,

with:

No significant GDP contribution

No significant tax revenue

generated

Few job opportunities

The Rubber City will stimulate the

overall socio-economic development

of the area by:

Encouraging public infrastructure

development

Attracting private investments

Creating employment opportunities

Improving qualifications of local

workforce

The Rubber City will lead Malaysia to

be a global leader in the rubber

industry by:

Leading in niche and

downstream rubber sectors

Creating greater resilience with a

diversified portfolio of products

Achieving higher position in the

global value chain, extracting

more value in Malaysia

Generating a larger knowledge-

based workforce

Developing local innovation and

R&D capabilities

The Rubber City is a strategically located project situated in the heart of the Natural Rubber Economic Belt,

close to the Malaysia-Thailand border. The socio-economic development of this border region is strongly

supported by both the Malaysian and Thai governments.

Current state of proposed

sitesDevelopment of Rubber City

Global Leader in

the Rubber Industry

KSTP Combines Global Research

With A Modern Industrial Park

“To be world-class in the promotion and commercialisation of applied scientific research and technology”

KSTP’s Vision

World-Class Facilities,

Equipment and Support

Service

Effective Linkages

between Research

Institutions & Relevant

Industries

Creative, Innovative &

Intellectual

Community

• High-end research

laboratories & equipment

• Business incubation

centres

• Technology business

incubators

• A research institution with

shared facilities, led by

industries and formed

based on academia,

government and industry

collaboration to lead

research and

commercialisation

projects

• Communal space for

socialising to

encourage

intellectual

interaction

• Technical &

management

business support to

improve market

uptake

Science and Technology R&D

on-site

A park for long-term

sustainable growth

Right tenants – value

through focused clusters

Researchers & Industry

work together17

GKC Aspires To Be High Income,

Vibrant, Smart & Sustainable

18

66 initiatives identified

leveraging from

pivotal positioning of

GKC within Koridor

Utara

VISIONGKC2030 –

HIGH INCOME, VIBRANT, SMART AND SUSTAINABLE

Accelerate Growth Enhance Inclusiveness Improve Sustainability

Heritage, Family,

Green & Eco

Tourism

Tourism

Industries based on

Industrial Raw

materials and Gas

Manufacturing

Modern agricultural

activities and supply

chain

Agriculture

Skills &

Entrepreneurial

trainings

Education &

Human Capital

Spatial Transformation

Eco Town

Road Upgrading Public

Transportation

Total Area:

449,252.21 ha.

(4492.5221 sq km)

Total Population:

424,700 (2010)

NODE 1 : BAGAN DATOH

5 ECP’s are located in Node 1, which are:

Bagan Datoh Port

Perak Heavy Industrial Park (PHIP)

Logistics Hub

Bagan Datoh Water City

RESCOM (research-commercialisation

project located within RWC)

NODE 4 : TELUK INTAN

3 ECP’s are located in Node 4, which are :

Palm Oil Industrial Cluster (POIC)

Organic Cluster (Plastics, Chemicals,

Rubber, Fertilisers)

Agro-based industries

NODE 3 : TAPAH


New townships – Educity

R&D Hub (Commercialisation) with

SME Park

NODE 2 : TANJUNG MALIM


NEXGEN AUTOCITY

1MYC

Satellite City

Tanjung Malim Golf Resort

Ulu Slim Wellness Resort

4 nodes have been identified within WPSInvestments until 2030

Source: Developing Perak’s Southern Region Study by PKNP

Indicative Investments (Public + Private):

RM30.5b

Indicative Job Creation:

109,000

19

South Perak Development

Plan

20

KEDAH RUBBER CITY

CHUPING VALLEY

GREATER KAMUNTING

KEDAH SCIENCE & TECHNOLOGY PARK

WILAYAH PERAK SELATAN

Linkages between Growth

Nodes will be created via:

• Ecosystem and

industry linkages

• Industrial Symbiosis

• Provision of enablers to

enhance connectivity

• Leverage on big ticket

infra items e.g.

highway network and

public transportation

Extending The Reach Of

Initiatives Across The Region

Leveraging On The Excellent

Logistics & Connectivity

Infrastructure

1. Double Tracking

2. Fast Intercity Train

Service

3. Reliable Commuter

Train Service

4. Integrated

Transport Terminal

5. Inland Container

Terminal

6. Proposed Light

Rail Transit

Legend:

Container

Terminal

International

Airport

Domestic

Airport

Seaport

LRT

1 Changlun – Kuala

Perlis Expressway

North – South

Expressway2

3Butterworth Outer

Ring Road

4Butterworth – Kulim

Expressway

5East – West

Expressway

6 Penang Bridge

2nd Penang Bridge7

Integrated

Terminal

West Coast

Expressway (in

progress)

8

Logistics Infrastructure Road Connectivity

21

Further Enhancement Of The

Connectivity Infrastructure

22

Penang Sentral Padang Besar Perlis Inland Port

An integrated transit hub that

provides comfortable

intermodal exchange to

increase public transport

modal shifts.

Upgrading of Padang

Besar Container

Terminal

• Consolidation and distribution

centre

• New rail connection

• Custom checkpoint and

clearing house

• Cargo handling

• Container yard capacity –up

to 1,000,000 TEUs

NCIA As A Strategic Partner

In IMTGT

23

Koridor Utara has an advantageous

position in SEA with close proximity

to China and India

… and can be a true logistics corridor in IMTGT

What do we need?

1. Double Tracking

2. Fast Intercity Train

Service

3. Reliable Commuter

Train Service

4. Integrated

Transport Terminal

5. Inland Container

Terminal

Legend:

Container

Terminal

International

Airport

Domestic

Airport

Seaport

Integrated

Terminal

Penang Port

Padang

Besar / PIP

Lumut

NCIA As A Strategic Partner

In IMTGT (cont’d)

24

Trade & Customs Facilitation

• Streamlined custom policies and

processes to facilitate trade

Transport & Logistics Effectiveness

• Assessible and connected logistics

location

Supply of Logistics Human Resource

• Steady supply of talent with Logistics

experience

Multi-modal transport structure

• Effective multi mode transportation

network

Koridor Utara has an advantageous

position in SEA with close proximity

to China and IndiaFurther Enhancement Needed

1

2

3

4

… and can be a true logistics corridor in IMTGT

Capitalising On The

Complementary Relationship Of

Malaysia And Thailand

25

Both countries have benefited from a

historical relationship and friendly ties

Bilateral trade between Thailand and

Malaysia is balanced and growing

092008 10

0

10

40

30

20

201211

50

60

70

80

Export

Import

Year

Trade value

MYR, billion

51%

49%

▪ Historical relationships and linkages among people

continue even today

▪ Border security cooperation and joint border

patrols on-going

▪ Collaborative trade activities

– 2/3 of Southern Thai exports leave the country

through Malaysia

– ~40% of Penang port TEUs come from Thailand

– Malaysia relies on Thailand for fresh fruit,

vegetables, seafood

– Thailand imports electronics from Malaysia for

domestic retail consumption

– Thai automobile industry relies on components

manufactured or packaged in Malaysia

▪ Cross-border tourism

– Thailand is a popular destination for mass

Malaysian tourists (shopping and other

entertainment)

– Higher-value Thai tourists tend to visit Penang

and KL

Cross-border Economic

Programmes Focuses On The

Competitive Advantages

26

Ex

am

ple

sT

yp

ica

l e

lem

en

ts

Wholly Integrated

▪ Oresund Region (Sweden-

Denmark)

▪ Effectively a single,

‘borderless’ region

▪ Governed by a

transnational body with

permanent representation

from both countries

Complementary

▪ United States – Mexico

Border Economy

▪ Singapore-Batam

▪ Hong Kong-Shenzhen

▪ Iskandar Malaysia-

Singapore

▪ Capitalises on cross-

border investment

opportunities and

consumer demand

▪ Prioritises lifestyle and

leisure dimensions as well

▪ Separated governance,

with formal collaboration

frameworks

SynergisticInput-driven

▪ Designed to leverage

competitive advantages

along value chain (lower

cost, labour-intensive

activity)

▪ Free flow of goods across

border

▪ Separate governance

structure supported with

collaboration frameworks,

e.g., NAFTA

China SEZs in areas border-

ing its neighbours, e.g.,

▪ Guangxi/Dongxing-Mong

Cai (Vietnam)

▪ Mohan – Boten (Laos)

▪ Yili – Horgas (Kazakhstan)

▪ Erenhot - Zamiin Uud

(Mongolia)

▪ Located at border to be

close to source of raw

materials and labour

▪ Designed primarily to

capitalise on one-way, low

cost flow of factor inputs

into manufacturing centre

▪ Driven by the country

conducting the

manufacturing

Malaysia-Thailand Borders Are

Complementary In Nature, With

Opportunity To Be Synergistic

27

Wholly IntegratedComplementary

Over time, opportunity to

develop more synergistic

collaboration (e.g., trade &

logistics, manufacturing) in

selected, high potential

border areas, e.g., :

▪ Bukit Kayu Hitam (Special

Economic Zone)

development with Sadao)

▪ Padang Besar (intermodal

logistics hub)

SynergisticInput-driven

Across all border areas,

relationships today are mainly

complementary, e.g.,

▪ 2/3 of Southern Thai trade

passes through Malaysian

border to access Penang

port (40% of volume)

▪ Malaysians make up the

bulk of tourists in Hatyai,

Betong, Sg Golok

▪ Family ties and retail trade

relationships go back a

long way

In the much longer term,

potential to develop border

development and

administration partnership

based on common starting

point and goals, e.g., Bukit

Kayu Hitam-Sadao

Least desired mode of

collaboration - should not

be the model for Thailand-

Malaysia border

collaboration

Progress & Key Milestones

Of NCER

28

2007 2008 2009 2010 2011 2012 2013 2014 2015

Unveiling of NCER

Blueprint by Datuk

Seri Abdullah

Ahmad Badawi

Establishment of

NCIA Act 2008 (Act

687)

RM1.4 bil private

investment secured

COE E&E established

Intensify private

sector participation

RM6.1 bil investment,

15,898 jobs

Commencement of

Strategic Studies

CREST & Biotech

Centre launched


16,335 jobs

Langkawi Tourism

Blueprint

Implementation of C&C

Lab


10,369 jobs

Start of Phase 2

Shared Value

Programme

started


18,603 jobs

Planning &

Implementation of new

growth nodes


11,835 jobs

Manjung is

included in

NCER

Greater

Kamunting

Blueprint

launched

RM18.8 bil

investment,

18,831 jobs

2015 Achievements:

Investment & Job Creation

29

2015 has generated RM12.5 billion of private

investments

10.7

18.812.5 10.0

0.0

5.0

10.0

15.0

20.0

2013 2014 2015 2015 Target

Investment

1.4

7.48

17.39

29.67

40.34

59.14

71.62

0

10

20

30

40

50

60

70

80

NCIA’s Cumulative

Investment in Koridor

Utara (RM’bil)

18,403 18,38111,835 12,000

0

5,000

10,000

15,000

20,000

2013 2014 2015 2015 Target

Jobs Creation

11,835 new jobs created in 2015

Cumulative Private

Investment

RM 71.6

billion

Cumulative Jobs

Creation

91,221

Other Impact And Outcomes

30

Median household income in NCER has grown

by 10% (CAGR) from 2009 – 2014 compared to3% from 2002 to 2004.

The Government’s proactive measures in reducing poverty

have affected large proportion of rural populace through

infrastructural development

NCER experienced higher annual GDP growth rate of

5.8% compared to Malaysia’s 5.4% during the periodof 2010 – 2014.

NCER’s manufacturing sector contributed to 21% of

Malaysia’s Manufacturing GDP, with growth rate of 5.5%from 2010 to 2014.

THANK YOU

economic corridor development for competitive and

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