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My answers to 12 questions on the Penang economy

MP SPEAKS On Oct 19, 2016, in an effort to clear all doubts on my dispute with Penang Chief Minister Lim Guan Eng about the true picture of Penang's the economic performance under DAP, I had requested the Penang Institute, a state-funded think tank, to answer 10 questions. Subsequently, I added two more questions, making it 12 in all.

Since the Penang Institute and the Penang government have refused to answer any of my 12 questions for almost a month, I now give you the answers to my 12 questions.

If my answers are not correct, I welcome Penang Institute to correct me. Alternatively, the Penang government is also welcome to sue me.

I repeat that the DAP must stop engaging in political dishonesty and propaganda to cover-up or go into a self-denial mode of what the true economic situation in Penang is. The people on the ground in Penang are already sensing that something is wrong.

On Monday, Lim said we should respect the rule that "whilst opinions are free, facts are sacred".

Well, these are the answers and these are the facts:

Question 1: Between 2008 and 2015, what is the cumulative percentage growth in Penang's GDP per capita and what position does it stand among all 16 states and territories of Malaysia?

Answer: According to data given by Lim himself last month, it is 42.9 percent and Penang ranked third from bottom among 15 states and territories.

Question 2: Between 2008 and 2015, what was the average GDP growth for Penang and what was the average GDP growth for Malaysia? Did Penang under-perform or over-perform Malaysia during this entire eight-year period?

Answer: The average yearly GDP growth for Penang from 2008 to 2015 is 4.05 percent, which is an under-performance because the figure for Malaysia, as a whole, was 4.65 percent.

This under-performance is further confirmed when you consider that Penang has become less important to Malaysia as its share of the national economy has dropped 25.5 percent.

Penang’s share of the national economy was 8.83 percent in 2007 but under eight years of DAP rule, it has dropped to 6.57 percent.

Question 3: Based on the figures released by Lim on Monday, is it true that at the end of 2007 - just two months before DAP took over the Penang govt on March 8, 2008 - the GDP per capita for Kuala Lumpur was RM18,306 more than Penang while the GDP per capita for Selangor was RM5,022 less than Penang?

Is it also true that after eight years of DAP rule, at the end of 2015, the GDP per capita for Kuala Lumpur had widened to RM49,875 more than Penang while the GDP per capita for Selangor had narrowed by more than half to just RM2,236 less than Penang?

Answer: True and true.

Question 4: Based on official Department of Statistics figures, which was also quoted by Lim, we can confirm that when BN was in power in Penang, the state GDP growth for 2006 and 2007 was 10.8 percent and 6.5 percent respectively, while the GDP growth for 2014 and 2015 was eight percent and 5.5 percent - meaning that GDP growth in Penang in the last two years of BN rule was higher than in 2014 and 2015 under DAP rule?

Answer: True. The average state GDP growth for the last two years of the Penang BN government’s rule is higher than in 2014 and 2015.

Question 5: Using the same data, can you also confirm that the Penang GDP per capita growth for 2006 and 2007 was 10.4 percent and 5.93 percent respectively, while for 2014 and 2015 it was 9.5 percent and 6.5 percent - meaning, when taken as an average of the two-year periods, the state GDP per capita for 2006 and 2007 was higher than in 2014 and 2015?

Answer: True. The average GDP per capita growth for the last two years of Penang BN government rule is higher than the last two years of 2014 and 2015.

Question 6: In your Penang Institute article dated July 19, 2016, titled "Penang's economy: GDP Growth Rates and 2016 Projection", did you state that one of the top reasons for Penang's better growth for 2015 (and possibly 2014) was due to "ringgit Malaysia has depreciated against US dollar. Therefore, Malaysian exports will be more competitive globally. With an export-orientated economy, Penang will benefit more than Malaysia"?

If that is the case, is it true that on one hand, Lim and DAP frequently criticise the government when the ringgit is weak while taking credit for higher Penang state GDP growth for 2015?

Answer: Both are true.

Question 7: Based on the auditor-general’s report, what is the operating expense (perbelanjaan mengurus) for Penang in 2008 and what were the operating expenses in 2013, 2014 and 2015?

Answer: In 2008, the operating expense was RM283 million, before increasing to RM832 million in 2013 and RM746 million in 2014, or about three to four times higher.

The auditor-general has yet to release 2015 numbers for Penang. Perhaps the Penang government can share this with us?

Question 8: What was the source of the increased revenue to fund these big increases in the Penang state government’s operating expenses? If the source of the increased revenue was due to sale of limited state assets, is selling limited state assets to fund a multiple-fold jump in operating expenses a sustainable business model?

Answer: The source of revenue to cover the three-to-four times jump in Penang’s operating expenses is from a big jump in sale of limited state lands and state assets. A recent example was the sale of the Penang government's long-held 49 percent stake in Pulau Jerejak last week.

No. This is not a sustainable business model as the state will eventually run out of land and assets to sell, while its yearly expenses will remain high.

Question 9: Lim has frequently used the figures for manufacturing investment from the Malaysian Investment Development Authority (Mida) to claim that Penang is the top destination for investments in 2010 and 2011. What were the positions for Penang in 2012, 2013, 2014 and 2015, based on the same source?

Answer: Since being number one in 2011, Penang never regained top spot since and was sixth in 2012, fourth in 2013, third in 2014 and fifth in 2015.

Question 10: Since 2011, Lim has continually boasted that he had reduced state debt by 95 percent, a reduction of about RM655 million. Was this debt reduction in 2011 due to surpluses from the operating budget of the state government or was it due to the federal government taking over billions of ringgit worth of Penang state water assets and converting the outstanding RM655 million loan to a 45-year annual lease payment of RM14.56 million per year - which works out to be the same amount?

Answer: The above is true. It was the federal government that helped Penang reduce its state debt by 95 percent. This reduction was not due to increased surpluses from Penang to pay back its debt.

Question 11: Is it true that Penang had registered the lowest median salary growth since 2009 among all 16 states and territories?

Answer: Yes it is true that Penang is rock-bottom and was overtaken by Johor, Negeri Sembilan and Labuan.

Question 12: Is it true that Penang had registered the fourth lowest median household income growth since 2010 among all 16 states and territories?

Answer: Yes, it is true. Penang registered the fourth lowest median household income growth among 16 states and territories and was overtaken by Johor and Malacca.


LIANG TECK MENG is the MP for Simpang Renggam and Gerakan secretary-general.

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