Interim Report-Executive summary

EXECUTIVE SUMMARY

The Northern Corridor Implementation Authority (NCIA) is assisting the Perlis state
government to realize its vision of transforming Perlis into a developed state on par with the
other states in Peninsular Malaysia via a strategic development planning study.

This interim report, still a work-in-progress, will discuss, inter-alia, on the following topics:

Macro-economic status, socio-economic profile and the regional context of Perlis;

Key challenges, gap assessment and preliminary ideas for a strategic development
framework;

Global trends, sectoral developments in Malaysia and status in Perlis as well as

potential projects with regards to the following sectors: agri-food, manufacturing,
trading and services, tourism, transport, and infrastructure;

Physical development framework, corridors and urban development nodes;

A summation of proposed projects, and GDP estimates of their contribution; and

Implementation issues and directions forward.

The key objectives of the study are (as a reminder): to analyse the factors that constrain
the development of Perlis, identify key sectors and industries that can transform and add
value to its economy, examine mechanisms and strategies that could enable the
transformation to take place, propose changes to the spatial structure, and recommend
policies, plans and programmes that would help speed up the transformation process in the
short, medium and long term.

Key activities were carried out since the Inception report (8 November) include
consultations with the state and federal agencies with regards to reaffirming the key issues
as well as discussions regarding potential projects and programmes that would make a
difference to Perlis. The consulting team developed some preliminary project concepts and
briefs, using this feedback. The output of this exercise was presented and shared with the
stakeholders in Perlis on 20 December 2011 at Workshop I. Participants gave their views on
these preliminary directions and ideas for the proposed strategic plan.

The socio-economic status of Perlis is described in detail. Perlis is a small state (810km 2)
with a small economy (RM3 billion GDP), and a small population (0.25 million) and labour
force (83,000). Even though it experienced out-migration 10 years ago, it has recently
“gained back” some of the youth because of several tertiary educational institutions. Although
Perlis does not have unemployment, it has a poverty rate of 6%, above the national average
of 3.8%, and it has the highest poverty among states in Peninsular Malaysia. 1,327 poor
households are registered in Perlis, of which 587 are hard core poor. Among the districts,
relatively more poor households are found in Simpang Empat, and Kuala Perlis, Kayang,
Bintong and Chuping. In terms of income distribution, it has highest Gini among the states in
Peninsular Malaysia as well.

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Among the SMEs, almost 60% are in services (i.e. retail and personal services, coffeshops,
household goods), 35% in agriculture and 6% in manufacturing. Most of the SMEs in
agriculture are the farmers. A survey of industrial firms showed that firms, predominantly
SMEs, are concentrated in the four main urban areas; three-quarters are mainly in 3
industries: textile and apparel, food products and beverages, metal and metal products.

About three quarters of the registered businesses are owned by bumiputera but non-bumis
own most of the commercial units and shoplots.

The government has a set of BCIC development programmes are designed to assist in
three main areas: capacity building, equity ownership and creation of high income jobs. The
two most popular programmes are the AIM and TEKUN. About a dozen of these
programmes have been set up and they reach out to about 10,000 entrepreneurs in the
state. Some of these would operate through cooperatives (SKM), KEMAS, and MARA. The
agricultural-based ones include RISDA and FELCRA, but also FAMA and MADA. Several of
them are focussed on training and capacity building in entrepreneurship (INSKEN),
Kraftangan Malaysia. Others in finance include SPED, SME Bank, Bank Rakyat, while those
involved in equity are: PNS and PUNB.

Perlis is surrounded by neighbours that offer an opportunity for regional cooperation.

Although not much has been done under the IMT-GT, some private sector collaboration is
assumed possible in tourism, education, transport and distributive trades, and manufacturing
(e.g. halal products). For example, the options for regional cooperation include tourism links
with Langkawi and Satun and even with Penang and other parts of southern Thailand.

In terms of the key issues and challenges, a gap assessment was undertaken and a
refined list of issues was identified. The eight (8) areas of concern are: urban development
and social concerns, facilitating private sector investment, promoting tourism and
recreational activities, developing an educational hub, improving upstream production,
improved capacity to govern and improve on service delivery, increased accessibility and
infrastructure development, as well as preservation of nature. The proposed vision
statement for this Strategic Development Plan is “an urbanised and developed State by
2020, and a high income State by 2030”.

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The 10 key challenges and strategic directions for Perlis are: shown below.

Key Challenges Strategic Directions

1. Land with encumbrances is a barrier to Focus on higher-impact sectors by
development adopting an integrated approach moving
up the value chain
2. Lack of technology in upstream
agricultural production Building an understanding of the
3. Weak linkages of industries across the dynamics of technology adoption and
value chain diffusion

4. Lack of investments (domestic or foreign) Creating local clusters to create

in Perlis competitive edge in a global economy

5. Limited contributing of SMEs and BCICs Enhancing investments through foreign

to Perlis economy investments as well as balancing the
participation of SMEs and BCICs while
6. Lack of awareness about skills availability strengthening the linkages with IMT-GT
in Perlis and GMSR
7. Weak promotion of tourism products and Optimising existing education and
destinations and lack of tourism service entrepreneurial base for innovation
and facilities
Attracting private sector participation and
8. Inefficient delivery system due to
involvement to leapfrog economic growth
government’s lack of capacity for
implementation Increase of liveable housing and urban
development
9. Lack of accessibility to Perlis, especially
proper road linkages infrastructure Leveraging on regional collaboration on
attracting tourist arrivals through mass
10. Lack of private sector participation to
promotion and community participation
transform the economy of Perlis
Enhance capacity of government to
improve efficiency in the delivery system
Strategic public sector investments in
enhancing strategic accessibility and
infrastructure

The priority industries are identified and re-grouped into economic drivers as: agri-food,
manufacturing and processing, trading and services, tourism, education and training, and
finally urban development. A list of about 50 (strategic) projects has been identified, and
together they are targeted to helping Perlis achieve the vision of the state, which is an
urbanised and developed State by 2020 and a high income State by 2030.

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These economic drivers are located in different locations and will be developed as clusters to
maximise the viability of each sector. This is supported by the proximity of these sectors to its
raw materials to ensure ease of transportation and accessibility to optimize yield, productivity
and processing. Other sectors like the education sector is also clustered into an area like the
Edu-City while manufacturing are planned in industrial estates.

The agrifood sector covers crops, livestock and fisheries, and sub-clusters of economic
activities. Agriculture is an important sector, accounting for 48,127 hectares or 58 per cent
of the total land area. Currently, it faces several constraints that impinge on its efficiency,
productivity and competitiveness, viz. uneconomic farm size, limited access to technology
and capital, lack of entrepreneurship and management skills and poor linkage to markets. In
order to modernise the agri-food sector, it should be modernised and restructured. Following
from the National Agri-Food Policy, the following initiatives are proposed: (a) consolidation of
small holdings to become larger mini-estates or nucleus estates, (b) professionally managed
farms, (c) establishing marketing linkages with the private sector through the food supply
chain.

Various cluster development strategies are proposed for the crop sector (rice, fruits,
mushrooms and herbs), viz.: increasing efficiency and productivity through technology
adoption and innovation, development of specific crops in certain zones, participation of the
private sector as anchor along the supply chain, enhancing food quality and safety,
improving the marketing system, and strengthening the institutional support services.

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Five proposals are being explored for agriculture: (1) scaling up and strengthening
productivity of padi farming in MADA and (2) non MADA areas, (3) developing the fruit
cluster with emphasis on mangoes, jackfruit and watermelon, (4) developing the herbal
cluster for herbal products, and (5) developing the entire value chain of mushroom from
farming to downstream processing.

With regards to livestock, Malaysia produces less than 5 per cent of its fresh milk needs,
and imports almost all of its beef requirements. The key challenges and issues are: lack of
suitable land, poor basic infrastructure, lack of knowledge and skills, high feed cost, poor
breeding systems and endemic diseases. Even so, dairy farming has good potential in
Malaysia. The other potential area is production of kampong chicken, due to a rising
consciousness of eating healthy natural food. With regard to both projects, the proposal is to
establish anchor farm operators who will support and energise satellite out grower farmers.
In this system, the farmers’ dependence for technical knowledge and markets are transferred
to the anchor operator. This will can provide economies of scale and be part of the supply
chain for downstream activities.

As for fisheries, there are three major clusters: marine capture fisheries, aquaculture and
recreational fisheries. In 2010, the marine fisheries sector landed 178,247 tons of fish worth
RM805 million. Analysis shows that most of the fish landings are coming from fishing outside
of the state territories. About 85 per cent of the catch is landed in Kuala Perlis. In addition,
Kuala Perlis is also a transhipment hub for fish, primarily from Thailand. Due to growth in
demand, most of the fisheries go to urban consumers with little left over for fish processing.
Aquaculture is a minor industry with total production (brackish and freshwater) estimated at
below 900 tons valued at RM7.5 million. Constrained by available area, Timah Tasoh being
off-limits, the potential is therefore very limited. Anecdotal information indicates that
recreational fisheries have potential, although hard data is lacking because this activity is not
regulated. Five project initiatives are proposed: upgrade the Kuala Perlis fish landing area,
(reconsider the decision to) allow an Aquaculture Industrial Zone in the Timah Tasoh
Reservoir, establish marine finfish seed production zone, a spirulina farm, and to develop a
recreational fish centre.

Manufacturing and processing has a 10 per cent share of the Perlis economy, and is third
behind services and agriculture. Between 2006 and 2010, RM167 million of foreign
investment commitments were made to Perlis. In 2010, it attracted domestic investments of
RM31 million. The five main industrial areas in Perlis have a total area of 200 ha with 66
industrial firms, employing 4,533 workers (2008 estimate). The firms are in: food (32%),
logistics (15%), mining and quarrying (15%), and trading and services (12%). The rest of the
firms are in: rubber products, wood and furniture, herbal products, metal-based industries,
and electrical-electronics. The largest firms in this sector are: rubber glove manufacturing,
cement production, sugar refinery and processing. There are also several non-mineral
mining operators, such as quarrying and dolomite. The main characteristics of the industrial
firms point to a service economy and resource-based processing of raw materials from
Perlis.

The key issue seems to be a small SME industrial economy, a lack of industrial
agglomeration that could pull other industries into Perlis, poor promotion by state agencies,
and until recently the lack of a skilled workforce.

Nonetheless, the additional key potential for industrial development in Perlis is skilled labour,
i.e. graduates from the 12 tertiary educational institutions, numbering about 8,000 graduates
annually. Higher value added manufacturing is needed in order to effect the economic
transformation envisaged for Perlis.

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In this regard, the key programmatic proposals for this sector are: to use cluster approach in
developing the manufacturing sector, extending industrial linkages further upstream and
linking with the resource-based sectors, increasing food production to meet potential food
shortages through supply chain development, leveraging on regional industrial spill-overs,
and leveraging on the ETP and NCER manufacturing driven programs. In this regard, 11
project initiatives are proposed which include: fragrant rice and rice processing, a swiftlet
program, food processing catering to the health and halal markets (health beverages, milk,
snackfood, halal gelatine, and halal meat processing), renewal energy as in solar farms, bio-
technology processing, rubber product manufacturing, mineral and resource-based
processing and manufacturing, and also downstream sugar processing. Justification and
rationale for these initiatives have been developed.

“Services” is the largest economic sector (58% in terms of GDP) in Perlis, but it is largely
dominated by SMEs. Of all the services sub-sectors, financial services would among the
higher paid ones while those in personal and household services would be much lower. In
Perlis, the distributive trades, i.e. retail and wholesale, restaurants, transport and
communications are predominant. Education is the only other service sub-sector that has
significant economic impact in the state, and will be discussed later. Other sub-sectors are
relatively small, e.g. finance, health, hotel and real estate services.

Padang Besar is a major service sector area, with the ICD and the cross-border trading
activities. More than 100,000 TEUs (possibly up to 150,000) passes through the ICD in
Padang Besar, containing mainly rubber and rubberwood products from Thailand, bound for
Penang. There is considerable potential for further development of the ICD because the road
congestion in Penang is expected to become worse over time. Due to these activities,
logistics service providers are located in Padang Besar.

Kuala Perlis has potential for redevelopment into a multi-purpose terminal in order to better
serve existing activities: ferry terminal to Langkawi and other destinations, fisheries landing
jetty, barter trade. If the other proposals under this strategic plan are realised, then more
throughput can be expected, especially the sealink to Satun (Pak Bara). In that regard, a
barge potential for Perlis if possible, if there is sufficient demand for such a service.

Except for the ICD and ferry activities to Langkawi, the services sector caters mainly to the
domestic needs of Perlis.

In this regard, the strategic direction and project initiatives for the sector are to pursue the
IMT-GT trade facilitation framework, to develop Kuala Perlis as a gateway to Langkawi, to
expand the Padang Besar ICD operations, and finally to consider a proposal for a
hypermarket in Perlis. The hypermarket proposal could address two key issues: reduce the
spending leakage from Perlis and to build the supply chain for Perlis’s resource-based
products to reach the urban markets of Malaysia.

With regards to the educational sector, Perlis has twelve institutions of higher learning that
produces 8,000 graduates every year. They comprise 3 universities, 2 colleges, 2
professional training institutions, 4 general training institutes and 1 post-secondary institution.
About a quarter of these are degree graduates, about half are diploma holders and another
quarter are certificate graduates. The students in these institutions represent an economic
resource for the state but it would appear that there is very little retention among the
graduates. Other issues include the relative isolation of the tertiary educational institutions in
the state, and the feasibility of private tertiary education institution.

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The study proposes the setting up of an education hub, where the defining characteristics
are: teaching, research and development linkages, knowledge production, innovation,
advisory and consultancy services, and centre for entrepreneurship development and
promotion. The benefits of such a hub are several and they would truly contribute to the
development of a knowledge base society. In addition to these benefits, an educational hub
would also have multiplier effects for Perlis. It is important that such a consideration should
not only be limited to Perlis but it should extend to cover the areas in northern Kedah.
Building the hub would also be enhanced if twinning programmes can be developed with
foreign universities. Possible options include linking with well-renowned Thai universities,
such as Chulalongkorn University or the Prince of Songkhla University. In particular, it would
be important to consider twinning in areas where they have strengths and to complement
areas where Perlis does not have knowledge base.

Several project initiatives are proposed are (1) developing the Perlis Education Hub which
include diversifying its features, (2) setting up a academic-industry nexus to ensure greater
innovation amongst industries, and (3) establishing a strong culture transformation in this
sector.

Malaysia received 25 million tourists in 2010 and is the ninth top tourism destination in
terms of tourism receipts. Perlis is situated at the confluence major tourism hotspots, viz.
Langkawi, Penang, and south Thailand. Unfortunately, Perlis has not been able to attract
tourists to its borders, registering 0.7 million tourists in 2008, of which 78% are from
Thailand. Almost 70% of them come in from Padang Besar. Perlis has about 810 hotel rooms
of various star ratings and officially the occupancy rate is 65 per cent. However, hotel
operators say the actual rates are much lower. There are various points of view of why there
are such low visitations: no iconic product, lack of variety in accommodation facilities, and
lack of product maintenance. While all are possible, it seems that Perlis does not have a
clear image as a tourist destination and generally its positioning has been a problem. It is
also excluded from the mainstream tourism circuit and lacks a clear image.

Perlis is not short of tourism products, even though it is a small state. There are many assets
with natural beauty including the biodiversity of its unique limestone features, a man-made
lake and it even has a signature fruit, the harumanis mango. The tourist attractions within
Sungai Batu Pahat have the potential of being the honeypot for Perlis tourism. The federal
government has allocated RM19.6 million to finance its projects but they have not addressed
major shortcomings such as the congestion around Kuala Perlis, poor maintenance of
tourism assets, lack of interpretation, uncoordinated promotion that have prevented Perlis
from offering a more satisfying tourist experience.

Some of the strategic directions for tourism in Perlis are: developing partnerships with
industry players in Langkawi to attract long stay tourists for overnight/day trips is one;
creating or nurturing SMEs to produce high quality handicraft, chocolate for high end tourists
in Langkawi; re-developing Kuala Perlis into a vibrant gateway, more professional promotion
via a large campaign, building the capacity of agencies in Perlis to maintain and promote the
state; and developing a wellness resort and water recreation centre at Timah Tasoh lake.
Capacity building of the tourism industry in Perlis would go a long way to improving tourist
experience as well as serve as a marketing tool for repeat tourism.

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Physical development of Perlis is important for the well-being of its residents. The major
components of infrastructure are generally well developed. There is sufficient water supply
and electricity to serve current needs. The central sewerage services are almost complete
around Kangar. As for solid waste management, anticipated improvements are expected as
a concessionaire has been appointed, and a sanitary landfill is being planned. And natural
gas will be available to consumers. However, the issue that has captured the public’s
attention is the floods. Lately, Perlis has suffered from major floods that have inundated large
parts of the state incurring huge economic losses.

To meet future expectations, there is a need to rectify current problems (floods) and to plan
ahead to serve the people’s interests. The government has completed a flood mitigation
study that foresees two diversion channels (Eastern and Western Diversions) to reduce
future floods; the western one has been approved for implementation. The Timah Tasoh lake
will be upgraded for flood mitigation and proposals for increasing the treatment capacity has
been made. Other water treatment plants are also being upgraded. The present solid waste
dumpsite will be closed when the sanitary landfill is in operation. New sewerage treatment
systems are being proposed for other towns/key development areas in Perlis. Proposals for
extending the natural gas supply pipelines are in the works.

In so far as ICT is concerned, there is already a major blueprint, the Perlis State ICT plan
2010-2015, which is an ambitious plan to propel Perlis into the ranks of an Multimedia Super
Corridor (MSC) designated zone. It consists of 17 initiatives identified for deployment over a
five year period. However, the state has yet to decide who and how to implement this Plan.
The reason: specialist skills that are needed to implement the plan are not available within
the state. The state has considered several options (including a One-Stop Centre, joint
venture with private firms) but a decision is needed on how to move forward. Even so, some
progress is on the way. TM has launched a high speed broadband service, serving 60 per
cent of the state. It seems the help of the private sector to implement the Plan would have to
be considered seriously.

With regards to transportation, all three modes – road, rail and water – are available in
Perlis. The existing road network system consists of a spur highway (Changlun-Kuala Perlis),
Federal Road (F7) and State roads. The Level of Service on all highways is between A and
C, i.e. in stable condition in terms of traffic volumes. In terms of water transport, Kuala Perlis
is the main transport area. And KTMB operates the rail line, servicing three stations in Perlis
at Padang Besar, Arau and Bukit Keteri. As noted, there is potential to develop the rail
transport, especially at Padang Besar. In so far as roads and highways are concerned, the
main proposals are: (1) a new NSE line from Alor Setar to Kangar to Padang Besar, (2)
coastal highway from Kuala Perlis to Satun, (3) a busway serving Arau-Kangar-Kuala Perlis,
(4) ring road around Kangar, (5) integrated transport terminal (Kangar Sentral), and a high
speed train station at Kangar, when planning for it begins. Currently, Perlis is left out of the
North South Expressway which highlights the need for the proposed highway connecting Alor
Setar to Kangar and to Padang Besar to contribute to the accelerated development of Perlis.

Urban development is a major theme of this strategic proposal. As urban centres are being
revisited in a different light, they are regarded as the spatial engine of growth. In this regard,
the urbanisation rate is about 51% in 2010. Another 650 ha will be added to the urban
landscape over the next few years. However, zoning alone will not achieve the desired urban
quality of life. In this regard, the Strategic Plan envisages a focus on urban development in
four nodes: Kangar, Kuala Perlis, Padang Besar and Arau. With this, the vision is that Perlis
will be a city state by 2030. By then, 75% of Perlis’s population are envisaged to live in urban
centres. The Kangar Local Plan has already zoned all these areas for urban uses.

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The key issues with this development are: the current low population thresholds which
cannot justify a hypermarket proposal, lack of development differentiation, and a significant
area of Kuala Perlis is under Malay Reserve Land (MRL). This status imposes strict
restrictions on its use. A consequence of this is that the non-MRL land and property now
commands a premium price because it is not encumbered with restrictions. More than 2,000
squatters are found along the river reserves which mean that their housing problem needs to
be resolved as well.

In terms of a state strategy, urban development is comprised of two broad initiatives:

corridors and urban nodes. The three main corridors are: (1) Kuala Perlis-Kangar-Padang
Besar corridor, (2) Kuala Perlis-Kangar-Ulu Pauh, and (3) Arau-Beseri-Padang Besar. It is
proposed that major economic activities are proposed, connectivity with each other, and
linkages fostered. The four nodes are discussed below.

Kangar as the state capital is the administrative centre, commercial and social capital city.
The Kangar Local Plan has lifted the restrictive areas within its urban boundaries of 29.8 km2.
Its river will be developed into a liveable and vital asset of the state. The tagline is Kangar
Maya. It is envisaged that the level of urbanisation would increase drastically. As the capital
city, it will be the budgetary resources to further develop its assets. The urban traffic growth
is haphazard and it may require a capital asset improvement. Two projects are proposed:
Perlis River Promenade and Kangar Maya Smart City.

Kuala Perlis functions as a major commercial centre and local service centre. It occupies an
area of 9.16 km2. About 42% is occupied by Malay Reserve. 11 per cent of the land is
occupied by residential, commercial and industrial uses. It is the main tourist entry point for
Langkawi and by boat from southern Thailand or Penang. The proposal is to redevelop the
traffic system, upgrade the jetty and other uses into a multi-purpose terminal, and transform it
into a Maritime City. A major reclamation area has been making its way through the decision
making process. There is a need to put up a concept plan for a maritime city.

Padang Besar is a major border town with a major container depot that is largely seen as a
ICD. It is a transhipment point for raw materials into Malaysia, and as noted about 100,000
TEUs annually. It has a land area of 32km2 and is surrounded by agriculture areas (64% of
its land use).The plan is to develop this node as a special economic zone to boost economic
growth within the town but also to spur development within the rest of its urban boundaries. A
major transfer of land to the state from FELDA would open up 1,000 ha of land for urban use.
This could well support development of border commercial area, an Inland Port, a new
township and industrial developments. However, if it can’t use up all of the urban uses, it is
proposed that part of the area would be leased (e.g. TOL) to agricultural activities. Short term
crops can be planted which would optimise the use of valuable land.

Arau-Ulu Pauh comprises a royal town and a potential edu-city development. The combined
area is about 30km2. Currently, both areas are dominated by agriculture land uses. UniMap
has its main campus in this area. The various proposals for this area are: edu-city
(Knowledge-Education) or education hub because of the many learning institutes there,
including those in Kedah; a high-tech park that would house high technology industries and
research networks; a private university with an international affiliation is seen to enhance the
standing of the e-hub. Additionally, tie-ups or joint ventures with Thai universities would
enhance the universities of both sides as they cater to the needs of the surrounding
population.

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Certain projects have also been proposed to strengthen the urban development of Perlis,
such as Perlis River Promenade, Kangar Maya Smart City, Kuala Perlis Maritime City,
Padang Besar Border Town, Chuping New Township and the ulu-Pauh Edu-city proposal.

The study has taken the prioritised issues (identified during the FGD) and grouped them into
8 dimensions of problems. Adding other areas which were did not surface in the discussions,
the study team identified 10 key challenges which must be resolved. Hence, 10 strategic
directions were identified. The economic transformation of Perlis would comprise of three
broad-based approaches: resource-based industries, improvement of existing industries, and
new industries that focuses on high-value added projects. The Study Team is well aware of
the underlying issues and challenges for the development of Perlis. It is important to take
these challenges and convert them into possible solutions that will drive Perlis into achieving
the vision statement. The Study also shall focus on implementation challenges.

Given this scenario, 50+ proposed projects were identified as the means to achieve the
desired objective for the development of Perlis. Briefs of these projects, containing
information on the type of project, size, estimated value, and jobs were presented at the
Workshop 1 in December to key stakeholders and participants. Feedback was obtained and
they have been taken into account in the following economic calculations.

These projects have the potential to generate RM14 billion GDP by 2030, comprising of the
following segments: status quo (RM 3 billion), BAU (RM1.2 million) strategic projects (RM4.4
billion), urban centres (RM2.3 billion), and multiplier effects (RM2.5 billion).

2,494

2,287

4,429 14,087

1,177
893

2,807

Current -2010 Status Quo (2.8% Status Quo (2.8% SDP: Strategic Project SDP: Urban Centres - Multipliers, Business Target (8.4% growth) -
growth) - 2020 growth) - 2030 Briefs 2030 Opportunities & 2030
Other Enablers

It is important to bear in mind that these are gross estimates which are made to provide a
perspective as to whether there is sufficient capacity in the projects to reach the intended
goal. They will be revisited and refined before the next report is prepared. These Strategic
Project Briefs comprise market assessment with relevant justification and rationale. The next
stage of reporting as well as Workshop 2 will focus on the implementation of the proposed
projects. This will be supported by syndication and common understanding on each project
with relevant key stakeholders, private sectors and implementers of the projects to ground
the Draft Final Report.

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Implementation of the Strategic Plan require a revisit some of key concerns. In particular,
three programmatic areas were seen as necessary. Socio-economic programmes shall
address low productivity sectors that need assistance and support. Economic programmes
should use leverage to achieve their aims and explore new ways of fostering development.
Institutional programmes should address areas where capacity building and institutional
strengthening and improvements would enable better delivery of results. It is important to
note that these areas may be controversial and probably not yet comprehensively treated.

In the socio-economic programme area, three areas were identified. (1) BCIC programmes
that support small entrepreneurs in Perlis will need a comprehensive review, to provide
support in areas such as marketing and capacity building gaps. The full suite of programmes
at the national level does not filter down to the state. (2) Improving padi productivity by
leveraging on the EPP to support padi yield improvement; another area which could be
improved is to facilitate padi lands to be reallocated from those who don’t want to farm to
those who want to farm. (3) Developing a programme for squatter housing which would
ensure a means for those who can afford to buy as well as those who can only afford to rent.

In the economic programme area, three areas were identified: (1) a regional development
strategy to enable Perlis to leverage on the combined resources of their neighbours would
enable Perlis (and her neighbours) to punch above (their) economic weight. These could
take the form of comparative advantage of the regions or just to collaborate on areas of their
strengths. Distributed farm-processing networks, educational-innovation hubs and border
trading potential could be further exploited. (2) Promoting greater private sector investment is
an extremely important area. To mobilise these investments, a special promotion body is
proposed to plan, promote and develop private sector investments. To complement, special
incentives are envisaged as necessary to overcome investor inertia. (3) A PPP (public-
private partnership) model for enhancing implementation is proposed.

In the area of institutional improvements, three areas were identified: (1) improving the
state’s coffers to a more sustainable level. As funding from the state is not likely given its
deficit status, several funds were proposed to be set up to reduce federal government
dependency as well as to provide flexibility to implement needed programmes. (2) Increasing
efficiency of the state in terms of supporting the high growth programmes of the Strategic
Plan, and these could take the form of a special taskforce to monitor the progress and a
research unit based on the capacities of local universities. Capacity building of state
government officers in areas that would help facilitate the development process. (3) Malay
Reserve Land is seen as a constraint on new development. Without attempting to dilute the
legal status of Malay Land, there are legal and policy options to exchange land so that those
areas in strategic locations could be made available for the proposed development. A policy
proposal would enable the state to achieve both development and protection policies at the
same time.

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