Making a city liveable the secret is economic growth from below


The present condition of urban life in Malaysia tells the simple fact that past plans did not go much beyond the mere listing of desired policy aspirations. This may have had to do with the strong concern with equitable distribution of development throughout the country. The 10th Malaysia Plan, however, appears to rely strongly on urban growth. This makes effi cient town planning hugely important and puts the focus on urban liveability and its relation to economic growth.

The fuss about economic growth and cities

According to the Economic Intelligence Unit of The Economist , Vancouver topped the World’s Most Liveable Cities list in 2011 for the second consecutive year based on five main criteria: stability, healthcare, culture and environment, education and infrastructure.

Economics is a noticeably missing consideration, but by gett ing all of these criteria right, a growing economy should naturally fall in place. We may care less about this accolade given that Vancouver is far from Penang, but then again, Khazanah Nasional in collaboration with the World Bank spared no expense in researching and publishing the findings on Cities, People & the Economy: A Study on Positioning Penang.1 The study was identified by the Economic Planning Unit (EPU) as one of the inputs for the 10th Malaysia Plan (2011–2015) (10MP) which pinpointed the development of vibrant liveable cities in Malaysia.

This is a visible departure from previous five-year plans during which the chief aim of regional development was to achieve balanced growth – the strategy for rapid national growth alongside more equitable distribution of development benefits across the states. The 10th plan noted that Malaysia’s number one city, Kuala Lumpur is already eight times larger than the other cities in the country. Yet, a key development strategy of the 10th plan is to further build Kuala Lumpur in preference over other cities because Kuala Lumpur remains far off the mark when bench-marked against vibrant liveable cities found in Asia and the rest of the globe.

Penangites might feel left out from the 10th plan’s development focus on Kuala Lumpur, but this apprehension is unfounded. Targets set by the federal government under the 10th plan have allocated 8.9% of the country’s gross domestic product (GDP) to be contributed by Penang in which only 5.6% of Malaysia’s population lives; in other words, per capita GDP in Penang has to be 1.5 times higher than in the nation and average growth rates, 1.2 times hi gher over the plan period. These 10th plan targets cannot be achieved without successful development in Penang. The more relevant concern is not whether Penang can continue to develop but what will be developed and how.

Development strategies in Malaysia have always been top-down, but all vibrant global cities have been developed bottom-up, from one aspiring neighbourhood to the next where people, cultures, livelihoods and urban spaces can be integrated into one harmonious whole.

George Town, as viewed from Penang Hill.

Urbanisation a key component for economic growth

Urbanisation, measured as a percentage of people who live in urban areas, is the process by which more and more of the total population live and work in towns. In Malaysia, towns are gazett ed areas with 10,000 or more people. Per capita GDP growth across the diff erent states in Malaysia has been accompanied by increased urbanisation as shown in Figure 1. Highly urbanised states including Penang and Selang or have much higher GDP per capita. Other states, such as Johor, Negeri Sembilan, Malacca and Pahang have lower urbanisation rates but they experienced big increases in their urbanisation rates as their GDP per capita grew during the past 20 years. Incremental units of per capita GDP over time tend to come from the urban economy. To compare what this implies across diff erent states in Figure 1, we can draw a vertical line at say RM15,000. The urbanisation rate of each state at RM15,000 will tell us how much of the GDP is earned between rural and urban economic activities.

The urbanisation rate for Perlis is about 35% compared to around 60% for Johor, 80% for Penang and Selangor and 100% for Kuala Lumpur. Th is suggests that the various states obtain economic output from diff erent sources – urban sources and rural income sources. GDP growth has come with more urbanisation but the link between them is not the same from state to state.


Ben Wismen

Urban planning

Economic growth occurring alongside urbanisation makes town planning an essential element of government policy. Looking critically around us today, we oft en ask if the cityscape in which we live was produced from past plans or if it was the result of natural evolution shaped by everyday interactions between peop le and activities, quite independent of planning. Surely, if our city today is a planned outcome, then why have we not yet seen a clean environment, smooth public transport, healthy living spaces and living conditions free from social ills promised by past plans?

Surely, if our city today is a planned outcome, then why have we not yet seen a clean environment, smooth public transport, healthy living spaces and living conditions free from social ills promised by past plans?

The answer is past plans for various reasons did not truly succeed beyond the rhetoric of the many goals that were set as a list of desired policy aspirations. There was little thinking about the price and sacrifices that city dwellers must pay as a collective in order to achieve these goals. Mohd Sukuran and Ho Chin Siong, quoting from BJ Collins and Lewis Keeble, define town planning as ordering building and land use according to a visually pleasing but practical scheme for the economy, and achieving convenience and beauty by ensuring accessibility and managing resource use while avoiding land use conflicts amidst bringing together mutually beneficial ones.2 Malaysia’s Town and Country Planning Department says that a structure plan, to be produced by all localauthorities as prescribed by the 1976 Town and Country Act (Act 172), is a written statement describing the strategic policies and actions for sustainable, social and economic development by providing a framework for planning decision making and development policy control in local vicinities.3 Public participation is also an inbuilt feature of the structure planning process. Statements of policy form only the drafting part of the structure plan which is not complete until after a period of public consultation. As of August 2007, a total of 116 structure plans in Malaysia have been completed, from which 100 have been gazetted. All of them went through a public exhibition and hearing process.


Public contention

Even though public consultation is an integral part of the structure plan process, public contention still occurs over plan announcements. In extreme cases, government approval for a massive development project can be obtained even though it did not appear on the structure plan, circumventing development control procedures. The plan to develop the RM25bil Penang Global City Centre (PGCC) was officially launched in September 2007 amidst public controversy and opposition by the PGCC Campaign Group (which included the Consumers’ Association of Penang, Sahabat Alam Malaysia, Aliran, Penang Heritage Trust, Citizens of Public Transport, Malaysian Nature Society, Tanjung Bunga Residents Association, Suara Rakyat Malaysia, Badan Warisan Malaysia, Jesselton Heights Residents Association and Friends of Botanical Gardens). The PGCC site was originally zoned as “open space”, which the authorities changed to “mixed development” so that development could be allowed to proceed. Construction would have begun, but a new state government stepped in aft er the elections in March 2008 and fi nally announced the cancellation of the PGCC in September that year.4

Source: service_dev_sp.php

In Kuala Lumpur too, a collective public action group – the Coalition to Save Kuala Lumpur (CSKL) secretariat – was formed to challenge several aspects of the Draft Kuala Lumpur Master Plan 2020. There was contention over how the planning process was implemented. Little time was given between public announcement of the draft plan and its approval. Little opportunity was given for the community to understand, analyse and object via public hearings. Once gazetted, the plan would become final and as such, the public wanted assurance that decisions made were objective and independent.

The selection criteria for membership into the public opinion hearing committee also came into question. The chairperson of the committee appointed by the mayor was one of the leading consultants hired by Kuala Lumpur City Hall to draw up the draft plan and also a member to the city hall’s advisory board, even though the 1976 Town and Country Planning Act clearly states that the person who draws up the plans cannot also be the one deciding on the plan.5

People-centric planning – putting people first

Act 172 or Malaysia’s Town and Country Planning Act of 1976 was passed in the same year the first United Nations Human Sett lements Conference (Habitat I) was held in Vancouver. The Vancouver Declaration was made to address conditions of the quality of life in human settlements as a prerequisite for the satisfaction of basic needs, such as employment, housing, health services, education and recreation by identifying opportunities and solutions and laying down general principles and guidelines for action.6

The course set by Malaysia to transform its land use via development as set by Act 172 in 1976 occurred at a time when the world began to confront the issues and challenges of people-centric development. The second United Nations Human Settlements Conference (Habitat II) held in Istanbul in 1996 further recognised the importance of local participation in the pursuit of better living standards by also declaring to “promote decentralisation through democratic local authorities and work to strengthen their financial and institutional capacities… while ensuring their transparency accountability and responsiveness to the needs of the people”.7

Town planning in Malaysia evolved from the specifics of local issues. In response to haphazard development, Kuala Lumpur’s town planning department was set up in 1921 and the Town and Country Planning enactment was passed two years later. In Penang, the Penang Development Target Map was produced in 1969 and the Interim Zoning Plan was implemented in 1974 but the first structure plan only came into existence in Penang in 1985, nearly a decade aft er the passing of Act 172.

Even though bottom-up aspirations are an inbuilt feature in the creation of structure plans within the legal framework of Act 172, plan executions tended to be top-down. Town planning in Malaysia splits into all three levels of government resulting in a physical development hierarchy. The Town and Country Planning Department is a federal agency under the Ministry of Housing and Local Government charged with formulating and administering national town planning policies in the form of a national physical plan. The department has state branches that advise state governments on town planning, and the local authorities form “the lowest level… responsible for executing town and country planning function as prescribed in the local plan.”8

The refined development control specifications of structure plans are given in the local plans that are also meant to coordinate public and private development expenditure by bringing local and detailed planning issues to the community. This is done via public objection hearings and social assessment studies at the scoping, strategy formulation and the plan’s public presentation stages. However, experience from previous structure plans in Malaysia has shown that public participation was only minimal if at all. Across the three levels of government, local planning is only relegated to the lowest level.

Often times, little information about the local plan is offered to the public. For instance, even though the structure plan for Penang Island was gazetted in 2007, four years have passed and still the local plan remains hidden from public view. The island’s draft local plan has already been approved by the councillors of the Penang Island Municipal Council (MPPP) in December 2008 and would have also been presented to the state planning committee in January 2010.9

Meanwhile, the public waits in anticipation. Public forums have already been held on the Penang Local Plan despite the absence of a formally released plan. A public forum, the Penang Local Plan & Film Night, was held at the Han Chiang College on December 8, 2010 to create awareness of what local residents should know about the plan. As the months drag on, news of development projects continue to seep into the mass media creating public confusion and concern. The plan to build the RM300mil Subterranean Penang International Convention and Exhibition Centre was put on public display in January this year and was met with a petition by members of the public against the project. Th e developer would also be allowed to build an extra 1,500 houses at various locations. Such a major concession given to the developer was perceived as a dangerous precedent by the state government that would allow other developers to negotiate to increase their plot density in future projects when present living conditions are already congested in Penang. In response, the Chief Minister, the president of the MPPP, along with the developer met representations from protestors at a closed door meeting in February.10 Penang people are obviously keen to involve themselves in shaping the development of the state, and although the planning process has the mechanism for public consultation, it has yet to be properly used.

An opportunity for more eff ective state-federal relationships

I have oft en wondered why state ministers (members of the state executive council or exco) are given titles very similar to federal ministers even though the Federal Constitution (Articles 74 and 77) clearly distinguishes legislative functions between federal and state governments. Th e Ninth Schedule of the Federal Constitution lists various portfolios under the federal list, and federal ministries tend to be named accordingly. However, state exco portfolios would also follow items on the federal list instead of the state list and the concurrent list provided for by Article 95.

Penang people are obviously keen to involve themselves in shaping the development of the state, and although the planning process has the mechanism for public consultation, it has yet to be properly used.

Both Parliament and the State Legislature formed by the same party coalition from the outcome of previous general elections may be the reason for states relegating powers to federal ministries during much of the nation’s history. However, the March 2008 elections have resulted in Penang being ruled by a different party coalition, suggesting that the ballot box is making a distinction between public delivery of items on the federal list and the state and concurrent lists. Multilevel governments in Malaysia provide for both top-down and bottom-up strategies. Separation of the development aspiration between federal and local governments actually offers an opportunity for state-federal relationship, in other words, to explore the scope of fiscal federalism that is embedded, through the various lists, but has yet to be fully experienced in Malaysia.

Traditional development models for economic growth are centred on building industrial capacity to replace traditional agriculture so that nations can expand their opportunities and scope for international trade.11 Malaysia’s five-year plans that the government faithfully puts in place have been generally modelled in this way. Th e first one was named the Draft Development Plan (1950–1955) (also known as the Yellow Book due to its cover). These plans performed well. In 1950, Malaysia was little different from many other former colonies.

Today, exports plus imports make up twice as much of Malaysia’s GDP; economic growth has occurred at a comparatively fast pace, transforming the country into a modern economy with an educated workforce complete with a vibrant domestic capital market.

Unfortunately, top-down plan implementations tended to produce only “one size fits all” solutions, mobilising the various economic sectors through fiscal incentives and investments prioritised according to comparative and/or competitive advantage. Development is based on fiscal allocation for building capacity. Progress of various plan components are then monitored by designated government agencies. Spatial consideration of the five-year plan was limited to ensuring balanced growth so that equitability goals would not be neglected. In this regard, the way Malaysia five-year plans were implemented would have been the same, regardless of whether Malaysia was a single nation or a federation formed by many states.

Making Penang a liveable city

The 10MP which is also being pursued through the Economic Transformation Plan (ETP) has a distinctive tone not found in past five-year plans. Balanced growth which was repeated time and again across many past plans, no longer appears to be a leading concern. Instead, the development of cities has been identified as a major driving force for economic growth. This would off er more scope for neighbourhood designs and solutions to emerge out of individual states in the country which are more akin to the diverse aspirations of their inhabitants.

Vancouver, the world’s most liveable city, would have lessons to off er to make Penang the liveable city it wants to be. In preparation for the 2006 United Nations World Urban Forum (WUF), the Vancouver Working Group (VWG), which was created as a partnership of public and private agencies and civil society, published several papers that looked at urbanisation as a global phenomenon for which social, economic, environmental and political goals have to be carefully balanced as a sustainable transformation process.

In the paper on Livable Cities12 many ingredients went into defining the liveable city. On the one hand, accessibility issues are included, such as equity, participation, culture, livelihoods and the voice of the people. The definition also takes into account the surroundings, made up of buildings, walkways, streets, fields and trees and ornaments and what they look like with everyday movements of people, during events, as the seasons change and when they are affected by the course of history. Liveability has to do with the quality of life experiences in the city where human activities can “enhance rather than degrade the natural environment, where the quality of the built environment approaches that of the natural setting.”13

Vancouver went through a brief period referred to as its “dark ages” of planning, and in 1983 the Municipal Act was amended by the provincial government that eliminated regional planning as a statutory function of the city following public protest to stop construction of a highway into the core of Vancouver, and did away with bottom-up participatory planning that had been in practice since the 1970s. Happily, the mandate for regional planning and public consultations was restored in 1989, following which the Creating Our Future document was adopted in 1990.

There were fewer than one million people living in the Greater Vancouver area in 1970. Th e population has since more than doubled and some 2.7 million people will be expected by 2021. Th e size of Penang’s population is comparable with Greater Vancouver. Th e Creating Our Future programme started out with over 200 issues that were narrowed to 54 actions and eventually categorised into five main themes: maintaining a healthy environment, conserving land resources, serving a changing population, maintaining the region’s economic health and managing the region. Reviewing these themes in relation to visioning, affordability and institutional capacity, the Greater Vancouver Regional District (GVRD) created a series of plans that comprised various functional plans specific to issues such as liquid waste, solid waste, water supply, air management, major parks and healthcare, as well as the liveable region strategic plan (LRSP) for transportation and ground management.

Vancouver produced the LRSP in 1996 with the following strategies: protection of green zones (clear demarcation of green spaces and agricultural land), building complete communities (striking the balance between neighbourhood amenities and more centralised economies-of-scale facilities), achieving a compact metropolitan region (concentrate economic growth at focal points), and increasing transportation choice (pedestrian walkways, bicycle paths, public transit systems and not just cars). In 2001, the sustainable region initiative (SRI) was launched with aspirations for an integrated urban system containing social, cultural, environmental and economic dimensions.

The GVRD shift ed out from the perception that planners are experts in creating regional plans and began to recognise the value of planning inputs that arose from the private sector, civil society and general public. There had been strong public reactions to planned announcements that were seen as becoming more pervasive and lacking in public accountability. Getting communities more involved in planning, on the other hand, provides greater legitimacy and democratic engagement in the planning process.

There is greater engagement of the community in town planning in Malaysia today, and in July 2008, the national workshop on liveable cities, jointly organised by the Malaysian Institute of Planners, City Council of Petaling Jaya and the Asean Association for Planning and Housing, produced a Citizen’s Documentation that resulted from the many questions and debates that arose from 231 individual participants and representatives of various organisations.

The workshop’s aim was to define liveability and identify challenges and difficulties to bring such concepts of liveability into reality. The group listed the following aspirations: public safety, clean city and healthy environment, vibrancy and employment opportunities, integrated public transport systems, sufficient community facilities and barrier-free access for all, and greater transparency, good governance and political commitment. Such aspirations can be achieved through community strength, law enforcement, the economy, infrastructure, financial resources, policies, political stability alongside good city planning designs, overcoming greed, corruption, vested interest, mismanagement, public apathy, ignorance and low moral and social values. Constant dialogues, good documentation and close data monitoring of indicators to track immediate, medium and long term actions as the blueprint for the Petaling Jaya City Council, mark the Council’s commitment towards making Petaling Jaya a liveable city.14


Policymakers tasked with formulating strategies for development used to think that different countries coming together to form economic blocs offered greater opportunities for visibility. Small countries cannot issue currencies that are accepted worldwide, but they can hitch on to stronger economies. Some countries in the Caribbean, Central America and the Pacific use the US dollar and Brunei pegs its currency to the Singapore dollar. Aft a or the Asean Free Trade Area agreement was signed in 1992, leading to the systematic reduction and removal of intra-Asean trade tariff s, enabling nations without modern economies like Laos or Myanmar to become better linked to the rest of the world.

Multilateralism, however, comes at the price. European nations adopting the Euro no longer have their own central banks. Now that countries like Portugal, Greece and Ireland are faced with economic crises, the European central bank in Brussels cannot tailor specific policies for them since monetary union means that there can only be one interest rate and one exchange rate that cannot be adjusted to suit both fast and slow going economies in Europe. The European Union and Asean began formal talks for a collective rather than individual nation free trade agreement in 2007 that was to become operational by 2015. However talks have been suspended since 2010. A one-size plan across all of Asean was impossible because of the very different legal frameworks found across all 10 member nations.

A similar analogy can be used when planning a liveable city. In any city there must be amenities within walking distance just as there will be others that can only be reached by private or public transport. There will be benefits in adopting a common model for doing some things similarly across states and across countries, but other things might be better done when uniquely tailored to the idiosyncrasies of the small locality. In the delivery of amenities, we need to distinguish carefully between what falls into common models that can apply everywhere and those that would be better if they contained local flavour. Th is is what fiscal federalism and the state-federal relationship are all about. Citizens are eager to begin participating from the bottom up. The government should quickly facilitate that.

Chan Huan Chiang is a senior research fellow at the Socio- Economic and Environment Research Institute (seri).

1 Written by Homi Kharas, Albert Zeufack and Hamdan Majeed (2010), Published by Khazanah Nasional Bhd.
2 “Planning System in Malaysia,” Joint Toyohashi University of Technology-Universiti Teknologi Malaysia Seminar on Sustainable Development and Governance, June 26, 2008.
4 See
5 See; Noel Achariam (2007) “City Hall girds for tough talk,” The Star, 21
6 www.unhabitat. org/downloads/docs/924_21239_The_Vancouver_Declaration.pdf
8 Mohd Sukuran and Ho Chin Siong (2008)op.cit.
9 “Make draft of Penang Local Plan accessible”,;
10 Audrey Dermawan “Alarm over 1,500 house deal for sPICE builder”, February 19, 2011,

11 See Hollis Chenery, Moisus Syrquin and Hazel Elkington (1975) Patterns of Development 1950–1970, World Bank Research Publications and Oxford University Press.
12 Vanessa Timer and Nola-Kate Seymour (2005) The Livable City, The World Urban Forum 2006 Vancouver Working Group International Centre for Sustainable Cities, Vancouver.
13 quoted on p.11, Timer and Seymour, (2005) Ibid.
14 Available at www.mip.

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