Governmental representatives and special economic zone (SEZ) leaders from more than 43 countries gathered in Kuala Lumpur, Malaysia for the inaugural Global Special Economic Zones Summit. Speakers stressed the significance of SEZs in catalysing a country’s economic growth through attracting FDI.
In his keynote address, Malaysia’s minister of international trade and industry, Sri Mustapa Mohamed, stressed the necessity of effectively managing an SEZ in order to boost a country’s competitiveness. Citing Malaysia’s ambitions to become a mature economy by 2020, Mr Mohamed said: “The past couple of years have been challenging, [however] Malaysia has done well. We are now on a very exciting journey, and SEZs will play a very important role. The setting up of an SEZ is a much contested model. While there may be differing views on what are the key drivers in the sustainability of SEZs, to succeed there must be political stability in the overall operating environment, consistency in the regulatory environment, and a sound infrastructure. These [are] the basic templates that SEZs require.”
Alluding to the 13 free zones and the 18 free industrial zones located in Malaysia, Mr Mohamed said: “We have been working hard to improve the business environment, [and] we are in the midst of implementing our economic programme. It is important that we succeed in services and in the knowledge-based sector. The Association of South-east Asian Nations [members are some] of the fastest growing [countries] in the world, and Malaysia is strategically located in the centre of [these]. There is plenty of infrastructure expenditure to boost the quality of [overall] expenditure, and [we have] many SEZs and several incentives under development.”
Iskandar was one example of a successful Malaysian SEZ cited by the speakers. Located at the southern tip of Malaysia, Iskandar was launched in 2006 to develop the economy in the southern state of Johor.
“The policy of the government is to spread out development to cover every [region], and Iskandar is one of Malaysia’s regional corridors of development,” said Mr Mohamed. “Going forward we are going to be more aggressive in attracting investments, in line with our objective of ensuring dynamic socio-economic development across states.”
Among the dignitaries in attendance at the summit was Ismail Bin Ibrahim, CEO of Iskandar Regional Development Authority, who told fDi: “Human capital development and FDI are among the key drivers of economic growth in [all] countries. For Iskandar, we are moving from a dominant manufacturing base towards a service-based industry. A sufficient supply of human capital might be an issue for now, but we [have] started several initiatives to address the talent gaps. FDI in Iskandar Malaysia grew from $7.52bn in 2006 to $11.11bn in 2011, and we remain cautiously optimistic for 2012.”