8/5/2009 — The Straits Times
Malaysia on Tuesday launched its first special economic zone (SEZ) on the east coast of the peninsula, as part of efforts to stimulate a sluggish economy and create new jobs in the rural east.
Touted to be Asia’s biggest, the East Coast Economic Region (ECER) SEZ covers a massive 25km by 140km, and stretches from Kerteh in Terengganu to Pekan in Pahang. Located within the ECER, the SEZ will comprise four areas that will promote a range of industry sectors.
They include agriculture, gas and petrochemical, tourism, real estate, high- value manufacturing, education and information communication technologies and logistics.
In carving out the new SEZ, the government is aiming to create more than 220,000 jobs and attract RM90 billion (S$37 billion) worth of domestic and international investments by 2020.
‘The SEZ is a strategic government response,’ said Prime Minister Najib Razak as he launched the zone on Tuesday. ‘For the first time, investors will be offered incentives that can be customised specially for them.’
Unlike development corridors, Malaysia’s first SEZ is meant to focus more intensely on drawing investments by offering tax breaks and other incentives.
Modelled on the Shenzhen SEZ in China, it promises customised incentives such as allowing companies to hire more expatriates for management positions, 10-year tax exemptions, 100 per cent investment tax allowances, and exemptions from import and export duties.
But some analysts have expressed scepticism about how effective the new SEZ can be. They note the new zone could have been launched as an attempt to push up activity within the ECER – which, along with the economy as a whole, has not been attracting enough investments because of the global slowdown.
Launched by former premier Abdullah Badawi in October 2007, the economic region had aimed to hit RM112 billion in investments by 2020, and has so far drawn RM24 billion, about a fifth of its target.