Unemployment rates in Penang will reach an all-time high after March, when the full impact of the global economic crisis hits the country.

The Penang government anticipates retrenchment rates to soar as companies take urgent measures to cut down operational costs.

"Since the financial terms of many companies end on March 31, 2009 employers will only reconfigure their employment and wage structures after that," said the state government's investor relations co-ordinator, Jeff Ooi.

penang government lodge report against azhar ibrahim 090908 jeff ooi Penang is also expected to be flooded with retrenched workers from Hong Kong, Taiwan and Singapore, when locals head home after being laid off from their jobs.

"We are now looking into ways to providing them with employment opportunities," said Ooi, who was in Hong Kong last week to access the situation, which he said has become critical.

He added that multinational corporations and small and medium enterprises in Penang were currently implementing resource conservation plans to counter the impact of the global financial crisis.

Resource conservation plans include cutting down on working hours, reducing the number of shifts, reducing human resources via voluntary separation schemes and laying off foreign employees.

Although conservation plans aim to strengthen a company's financial muscle to counter the crisis in the next few months, the state government expects several companies to eventually retrench workers to survive the full brunt of the global crisis when it sweeps across the country next March.

"In the short term, we do not expect lay-offs. But after next March, several employers will retrench workers, especially at the low-end manufacturing sector," he told Malaysiakini today.

Penang has an estimated 700,000 workers, with 300,000 working in the industrial sector.

"It's a global, not regional phenomenon. No one can escape," said Ooi, who is also chief of staff in the Penang chief minister's office.

Pro-active strategies in place

On its part, the state government is currently planning short-term and long-term pro-active strategies to woo investors, stem the impact of the crisis and to stabilise and stimulate the state's socio-economic growth.

factory in bayan lepas penang 060208 Among strategies already in place are a special task force under Chief Minister Lim Guan Eng to woo major investments and an investor advisory panel in the industrial and services sectors to maintain and improve the state's competitive edge.

Other efforts include earmarking a special zone for SMEs and a halal industrial hub; reducing the leasehold price of land by 10 percent and using the 'build first approve later' incentive to lure investors.

According to the Malaysian Industrial Development Authority, Penang has secured RM6.1 billion in investments this year, far exceeding its target of RM3.8 billion.

When contacted, InvestPenang executive chairperson Lee Kah Choon was optimistic about the future, noting that certain industries, like manufacturers of medical equipment, would survive and even do well during the crisis.

"Manufacturers of consumer electronic products like cellular phones and MP3s would be badly affected, but not all," he added.

"Other resilient industries will either remain stable or even grow."