Industrial estates and regional economic development: a case study of the Prai industrial area, Penang
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Date
1980-06
Authors
Chi, Seck Choo
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
Industrial estates can become effective instruments in
industrial decentralization· strategies on the basis of
their ability to act as economic.nuclei in less developed
regions. The emerging importance of regional development
planning for developing countries-implies the need to
build more empirical studies which can describe and
analyse how industrial estates can be particularly
relevant as components in regional development.
Malaysia, like most other developing countries,
embarked on an ambitious industrial estate programme
which in the 1970s became saddled with the issue of the
dispersal and decentralization of industries. One
significant aspect in the New Economic Policy is the
attempt to redress spatial imbalances in the Malaysian
space economy via the redistribution of industrial
activities to "less developed areas". As industries are
being dispersed to various industrial estates throughout Malaysia, the question still remains of their effectiveness in the economic and social development of the region
within which they are located. A case study of the Prai Industrial Area in Penang
shows that the industries locateq_.in industrial estates and Free Trade Zones extend limited regional linkages sectorally and spatially. Their local multiplier impact
is small in magnitude and many of their activities are
divorced from the needs and resources of the region in
which these industries are located. The growth processes
of the industrial estates are neither self-generative nor
self-perpetuating and the industries are also not
propulsive enough to lead the region forward in
development.Among the reasons for the lack of effectiveness of
industrial estates on r~gional development is the absence
of a proper programme and strategy which can relate the
industries to the regional economy. The over-independence
on foreign firms and the retardation of the local
manufacturing sector lead to organizational linkages which
created extra-local multiplier impacts and which in turn
link the industrial estates to the world economic order. There is a policy vacuum and the lack of strategic
planning to make industrial estates more operative f.or
regional development purposes.
The thesis calls for a reformulation of the industrial
estate programme as practised in Malaysia today. The
programme must be purged of its many weaknesses and be
radically reorganized with special emphasis on the need to
create self-generative and self-perpetuating industrial
development processes in indust~ial estates through the
special nurturing of the local manufacturing sector. Only
with such changes can industrial estates become effective
components in the 'growthpole' approach to regional
development.
Description
Keywords
Industrial estate