Good hearing and a light touch


The nexus between national government initiatives and private sector expertise is often seen as the locus where the success of many Asian countries is decided. However, economics, like politics, always has a local base. Sub-national governments, which are often given minor roles in expert analyses of national development, are therefore necessarily important players in this equation. Despite the lack of financial might, a state such as Penang, can make effective use of its many local advantages.

From the successful development of Korea’s steel and shipping industries to Israel’s software cluster, and from the US’s semiconductor giants to Japan’s automobile empire, the “visible hand” of government has been involved, and due credit is now being given them.

These heroes – when sung – tend to be powerful national governments with deep pockets and strong control over trade, fiscal and monetary policy. Using mechanisms such as protection from international competition, subsidies, providing specialised infrastructure, and even imposing financial penalties for low performance, they have managed to make their private sectors competitive.

To read the rest of the article and to access our e-Archive, subscribe to us for RM150 a year.

Related Articles

Sep 2014

Making federalism REAL

If we can strike the right balance with federalism, we may just be able to strengthen Malaysia. But where and how should we start?

Jun 2015

Butterworth beckons A bright future awaits East Penang

Stepchild no more: Butterworth wants to climb out of George Town's shadow. We find out how it could do just that.

Mar 2014

Out of gas weighing our energy options

With TNB's price hike earlier this year, we take the opportunity to review Malaysia's energy situation.