Wataru Yoshida
Nikkei Asian Review
March 24, 2016
PENANG, Malaysia Lim Guan Eng, chief minister of Malaysia’s northern state of Penang, is invigorating the local economy through reforms and may inspire the country to set aside its protectionism to achieve sustainable growth.
On Feb. 8, Lim was celebrating the Chinese New Year with his supporters in a meeting hall in Penang. The hall was surrounded by about 30 men carrying placards denouncing him. “It is clear they have no respect,” Lim said. “If they had an issue to protest about, they could have done it at any other time.”
Lim is the only state chief minister of Chinese descent in Malaysia, which maintains a Bumiputera (“son of the land”) policy favoring ethnic Malays. Moreover, he comes from an opposition party. Eight years have passed since he became chief minister, and verbal attacks against him are still an everyday occurrence.
He has earned a reputation as a reformer. He introduced an open bidding process for state projects, abolishing the practice of awarding contracts preferentially to ethnic Malays and opening the door to all, including foreign and ethnic Chinese companies.
The state government handed over the operation of a golf course it owns to a Japanese company after the project was put out for tender. The decision led protesters to storm the golf course, but the company that won the order was relieved by Lim’s words: “To increase foreign visitors, foreign companies’ wisdom is needed.” Users of the golf course have grown 30% since the Japanese company took over the operation.
In another reform, he introduced performance-based pay for state employees, including those doing menial street sweeping jobs. “My dream is to transform Penang into an international and intelligent city. To wake up, we must be clean,” Lim said. The heaps of garbage littering the roadsides disappeared in a year.
Under Lee’s leadership, Penang has revived its image, which has suffered since the island’s heyday in the 19th century, when it flourished as a trading port. In the six years since he took office, investment in the state has doubled. The state has become a beacon of hope in Malaysia, which was criticized for its protectionist regulations in the negotiations for the Trans-Pacific Partnership trade deal. Penang’s economy grew 8% in real terms in 2014, compared with 6% for the whole country.
His father, Lim Kit Siang, is also an opposition politician. When Lim was eight years old, his father was arrested and held for a year and a half on suspicion of violating the public security law. It was a lonely time for Lim Guan Eng. “Who wants to befriend a prisoner’s son?” he said. “I grew up quite alone and only had one or two close friends. I did a lot of reading on my own.”
At age 25, when he was working for a foreign-affiliated bank, Lim’s father persuaded him to enter politics. He was imprisoned twice for anti-establishment activities. He got sick and almost lost heart, but he returned to politics, reflecting that “you don’t know how beautiful and important freedom is until you lose it.”
He is now pondering how to ease the island’s traffic congestion. There are only two bridges linking Penang Island to Peninsular Malaysia, and Lim plans to build a tunnel and fund it by selling the rights to a reclaimed area.
Many emerging countries realize growth by imitating developed countries’ model of relying on low wages to grow the economy. They then squash competition and turn inward when they suffer a slowdown. But protectionism will never lead to new growth. For Asia to continue growing through innovations, it will need the courage of nonconformists like Lim who open the door to the world.