Allow me to begin by extending a very warm welcome to each and every one of you here today.
Globalization and technology allows us to be almost anywhere in the world just as I am here today. As the Chief Minister of Penang, I would like everyone here to know that Penang, beyond being a destination of choice for work, live learn & play, is among the best investment destinations in Malaysia and the region both for tourism and manufacturing.
Australia-Malaysia Bilateral Relations
First a bit on Australia and Malaysia’s history of bilateral cooperation. Last year marked the 60th anniversary of Australia’s diplomatic presence in Malaysia. Malaysia is Australia’s second-largest trading partner in ASEAN and ninth-largest partner overall. In 2014, total merchandise trade between Australia and Malaysia was A$17.5 billion, with Australian exports of A$6.1 billion and imports of A$11.3 billion. Total two-way services trade in 2013-14 was A$3.3 billion, with Australian exports of A$1.8 billion and imports of A$1.5 billion.
Major merchandise exports from Australia to Malaysia include, copper, nickel, coal and wheat. Major Malaysian merchandise exports to Australia include crude petroleum, monitors, projectors and televisions, computers and refined petroleum.
Combined, Australia-Malaysia two-way investment more than doubled over four years from 2010 to a value of A$30.6 billion in 2014. In 2014, Malaysian investment in Australia stood at A$21 billion. Australian companies continue to pursue opportunities in Malaysia, with the stock of Australian foreign investment in Malaysia at A$9.6 billion in 2014. The Australia Malaysia Business Council (AMBC) has been an important coordinating body for commercial linkages.
For the second smallest state of Malaysia, Penang contributes 7% to Malaysia’s GDP with 25% of Malaysia’s total exports and imports. With over 40 years of industrial experience evidenced by the presence of more than 300 multinationals companies, today, Penang is one of the most dynamic, progressive and competitive states in Malaysia. All the top names in the E&E industry are in Penang for example Intel, National Instruments, Robert Bosch, Keysight, Agilent and AMD.
Global Business Services (GBS) Ecosystem in Penang
Penang have well capitalized its manufacturing capabilities and is now ready to move further up the value chain by focusing on high value-added industries such as global business services (GBS). This is evident with the existence of almost 30 GBS companies in Penang providing more than 8,000 high income jobs to locals and serving both regional and global markets. These numbers are expected to increase by 60% in the next three years.
For instance in 2014, Citigroup global credit financial hub in Penang recorded 32 million transactions with an annual value of USD7.2 trillion. Citigroup employs a headcount of 1300, nearly 100% local. If Penang can fulfil the requirements of Citigroup, we can satisfy the needs of top GBS or Business Process Outsourcing or Shared Services Outsourcing BPO/SSOs companies.
For instance, Melbourne-based Toll Global Forwarding, before its acquisition by Japan Post, established their operations in Penang at the end of 2013. In just over 2 years, they have nearly 200 employees conducting BPO activities serving their customers worldwide. This shows that Penang is capable of providing world-class service to international companies.
Penang towards Generating Higher Pool of Knowledge Workers
Developing the state’s talented young people to move up the value chain has always been a priority to the Penang State Government. In Penang, there are over 40 public and private universities and colleges, in addition to the eight reputable international schools.
Penang has also embarked on the German Dual Vocational Training (GDVT) program by paying the tuition fees of students. Costing the state government RM2 million, the GDVT program in Penang is a valuable up-skilling programme that allows students to be trained by receiving on-the-job training by the company.
The GDVT students will receive a monthly salary of RM1,000 and be trained concurrently to apply their knowledge as a worker. This combination of theory and practice gives the students a real head start in their career. As their tuition fees are financed by the state government- they are in fact paid to study.
Penang is also successful in attracting talents from overseas. The Penang Career Assistance and Talent (CAT) Centre is assisting international internship training programme, in collaboration with universities in Japan & New Zealand.
We are helping to build the capability of the state as it moves toward a knowledge economy by maximizing local content, adding value through integrated industrial parks, and promoting economic diversification and entrepreneurship.
To scale new heights and progress towards a high-income economy, we need to encourage innovation and creativity. Penang possesses the 3Ts of Talent (Talent), Technology (IT) and Tolerance (Tolerance) for a creative cluster. Through mentorship programmes we hope our innovators can become entrepreneurs thereby creating the technopreneur through our Penang Science Cafe (PSC), Penang Tech Dome (PTD), Penang Learning Center that offers STEM(Science, Technology, Engineering and Maths) teaching.
We have also established @CAT to help tech start-ups through accelerators so that we can leverage on our core competencies in our electronic cluster to partake in the 4th Industrial Revolution of Big Data Analytics, cloud computing and Internet of Things ( IOT).
Livability & Work-Life Balance to Residents
Penang is the most liveable city in Malaysia and offers the best of both worlds, a competitive ground for business and an island famed for its tourist attractions. Knight Frank, the global property consulting firm, recently listed Penang as the best location for commercial property and investment with 67% surpassing Kuala Lumpur with 56% confidence from industry players.
Lonely Planet has ranked George Town, Penang as the 4th Top 10 Cities to visit in 2016 and is also on The Guardian’s list of Top 15 Best Street Art around the world. Culturally, the internationally acclaimed George Town Festival is in its seventh year running and is one of the most vibrant arts festival in Southeast Asia. I would like to invite all of you to take the opportunity to explore this world class festival from July 29 to August 28 this year.
Look no further, Penang is a place where you can do business, create great products, deliver great services, make money, and at the same time enjoy a desirable lifestyle.
When you do, you’ll find some of the world’s best talents and some of the world’s most innovative entrepreneurs. You’ll find a government, and a leadership team who is committed to help you create an international and intelligent city, where you and your family can prosper. We are proud to be the only government in Malaysian history to be commended by Transparency International.
Before ending, I would like to thank KPMG, investPenang, MDeC and the Australia Malaysia Business Council (AMBC), Victoria for making this seminar possible and once again, I thank all of you here for your presence and I wish you a fruitful seminar. Thank you.