Four or five multinational companies may be leaving Penang, but this does not render the state unattractive to investors, said Deputy Chief Minister II P Ramasamy.
“One swallow does not make a summer”, he quipped, urging the state’s critics to examine the waiting list for industrial lots in Batu Kawan, on the mainland.
“This alone would disarm those detractors from passing negative judgements of the Penang economy,” he said, in an interview with Malaysiakini.
“The economy of Penang is currently undergoing a rapid diversification process.
“In other words there is a concerted move to bring and nurture high end industries, industries that will attract more skilled personnel and assist Penang to overcome the problem of a middle income economy,” he added.
Ramasamy said Penang’s service sector looms large in the future, in terms of its contribution to the overall economy of the state.
Tourism and the location of outsourcing companies with global connections, could also be an important source of revenue for the state, as it brings employment, Ramasamy added.
He said some other states could be written off for being sluggish in attracting foreign capital, but certainly not Penang.
“A few shut-downs cannot reflect on the overall nature of the economy,” he said.
Ramasamy was referring to concerns by several quarters over the departure of several foreign companies, which are pulling out or closing plants due to cost and financial considerations in Penang.
Opponents of the Penang government questioned if the state is losing its competitive edge.
The New Straits Times reported on Sept 19 that in the last two months, three multinationals - Seagate Technology Plc, Western Digital Corp and Rubicon Technology Inc - were calling it quits.
This adds to Intel technology announcing early this year that it would be laying off 12,000 workers globally. This exercise would affect about 1,000 employees in Kulim, Kedah, the NST reported.
DAP critics are blaming the Penang government, but Ramasamy said the situation does not reduce Penang to “economic shambles”.
“Some prophets of doom cannot wait to attack or ridicule the Penang government for failing to stop these investors from leaving,” he added.
Ramasamy cited the case of Seagate, saying the state government tried its best through Invest Penang to salvage the situation.
But the slow response on the part of Mida to offer an alternative attractive package, was a factor that saw Seagate moving to Thailand on a reduced scale, Ramasamy said.
Ramasamy added it took the state and federal governments to work in unison to retain investors as “the state government alone cannot do wonders”.
He added if such these companies were to close shop, more than 3000 jobs might be affected.
But the good news is that those who found themselves unemployed, have a good chance of rejoining the work force, Ramasamy claimed.
He noted that the present unemployment rate in Penang is around 2.5 percent, while the national average is about 3.9 percent.
“Foreign investments in the state might not have peaked as in 2010, nevertheless there is a constant flow of investments to the state,” Ramasamy said.
“If only the federal government ceased discriminating against Penang on political grounds, developing its infrastructure could have spurred the economy,” he added.