Tuesday, September 18, 2007

East Coast Economic Region (ECER)

KUALA LUMPUR, Sept 18 (Bernama) - About 40 percent of the RM112 billion to be invested in the East Coast Economic Region (ECER) covering Kelantan, Terengganu, Pahang and Mersing district in Johor will be spent on major transportation linkages and other key infrastrcuture facilities.

Petronas president and chief executive officer Tan Sri Mohd Hassan Marican said the provision of greater access and enhanced transportation networks would be a crucial determinant for development and growth in the region.

Petronas is the master planner for the economic region, which comprises 66.736 sq km of land or 51 percent of Peninsula Malaysia. The ECER will be launched by Prime Minister Datuk Seri Abdullah Ahmad Badawi in Kuala Terengganu and Kota Bahru on Oct 30 and in Kuantan on Oct 31.

The ECER is the third development region to be launched by Abdullah this year after the Iskandar Development Reion in Johor and the Northern Corridor Economic Region covering states in northern Peninsula Malaysia.

Factoring in the population of 3.9 million in the ECER against the total spending, an estimated RM30,000 would be spent on each individual in the region during its implementation between now and 2020, he told an editors’ briefing on the ECER here today.
The population in the ECER is 14.5 per cent of the total national population of 26.8 million and the region is also the Malay heartland as bumiputeras form the bulk of the population at 86.6 per cent. This is followed by the Chinese at 7.8 percent, Indians at 1.8 percent and others at 3.8 per cent.

The enhanced road infrastructure will include Phase Three of the East Coast Expressway linking Kuala Terengganu and Kota Baharu, Phase Four of the expressway connecting Kuantan to Johor Baharu and a road linking Temerloh to Kuala Pilah.

Hassan said of the RM112 billion, 20 percent would be financed by the private sector, 27 percent via private finance initiative (PFI) and the rest by the government.

Hassan explained that the main objective of the ECER Development Plan is to accelerate growth in the region in a viable, equitable and sustainable manner.

Among others, it will address the economic imbalance in the region as the ECER states have among the lowest average household incomes in Malaysia. Terengganu and Kelantan are states with the highest incidence of poverty in Malaysia, accounting for 15.4 percent and 10.6 percent of poverty in the country, followed by Pahang at 4.9 percent.

Under the ECER masterplan, a total of 561,000 jobs will be created by 2020 and hardCore poverty will be cut to zero.

The gross domestic product (GDP) for ECER will be raised to 7.2 per cent by 2020 from 5.7 per cent in 2005.

Both Terengganu and Pahang are targeted to grow at 7.5 per cent with Kelantan at 6.4 per cent.

Among others, the mission of the ECER is to move the economy up the value chain, raise capacity for knowledge and innovation, address persistent socio-economic inequalities, improve the standard and quality of life and strengthen the instititional and implementation capacity.

Apart from tackling accessibility to the region, the regional imbalance (West Coast states versus East Coast states) and the incidence of hardcore poverty, the ECER would also address income inequalities between the rural and urban populations and basic infrastructure, as well as to optimise the property sector, including tapping the potential of Malay Reserve Land, said Hassan.

“Among the ideas for optimsing Malay Reserve Land is to set up a trust that will develop the land. Owners of the land can be members of the trust fund,” he explained.

Excluding government-owned land, a whopping 40 percent of the land in the ECER are Malay Reserve Land.

Hassan said the development masterplan would capitalise on the more than 190 training institutes and institutions of higher learning in the ECER, which were mostly underutilised, with the aim of not only using them to train locals to move up the value chain but also to attract those outside the region to study there.

Besides education, he said the other sectors that had been identified to revitalise the region were tourism, oil and gas, petrochemicals, manufacturing and agriculture and education.

“The thrust of the ECER will be agriculture and tourism,” he added.

“The plan can succeed. It will have one council, its bill is being drafted to be tabled in Parliament in December,” said Hassan.

He said the council, whose members include the prime minister and deputy prime minister, the menteris besar of the four states, two cabinet ministers and representatives from the private sector, would be responsible for the implementation.

He said it was too early to say whether it may establish an authority just like the IDR or NCER for its operations.

Hassan said during the formulation of the ECER development plan, Petronas had spoken to all four state governments, including representatives from the Opposition-led Kelantan state government.

“If there is focus and strong commitment, there is no reason why the ECER could not succeed,” he stressed.

On agriculture, Hassan said it would include citrus and pineapple planting, goat-rearing, herbal cultivation and growing of rubber trees specifically for timber to be used in furniture-making.

“We have identified 50,000 to 100,000 acres of land for growing rubber trees for timber,” he said.

This also meant that furniture-making activities, now concentrated in the southern part of Peninsula Malaysia, could be attracted to the ECER, he added.

As for attracting forein direct investment (FDI), Hassan said the objective is to attract all kinds of FDI, either big or small, in areas like tourism, manufacturing and education.

For Petronas, he said, “We will be investing in the oil and gas like we have been doing all this while.”

Hassan said Petronas took seven to eight months to complete the master plan, which would be officially handed over to the government at the ECER’s launch.

Petronas, he said, could be one of the private sector representatives in the council that would run the ECER.

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