OBG talks to Jebasingam Issace John, CEO, East Coast Economic Region Development Council (ECERDC)

Interview: Jebasingam Issace John

How will the planned investments in transport affect competitiveness and access to markets?

JEBASINGAM ISSACE JOHN: ECER Malaysia’s success in attracting private investments to the region was the result of our continuous engagement with private investors, which was done in collaboration with the Ministry of International Trade and Industry (MITI) and the Malaysian Investment Development Authority. In fact, many investors delayed their investment plans because the infrastructure did not exist. Therefore, we have been focusing our efforts on putting the infrastructure in place over the last few years. The government has invested some RM3bn ($970,000) in infrastructure development in ECER Malaysia during the past three years to support private sector investments.

We are now beginning to reap the benefits of these infrastructure investments as more private investments are being made. Essentially, private investment will be the main driver of growth for ECER Malaysia and the government will play a part in providing an environment that is more conducive to attracting these investments. ECERDC expects to see an increase in inflows as the government develops and upgrades the region’s transportation networks and infrastructure. Such projects are necessary to improve the region’s connectivity to other growth areas both nationally and internationally, as well as to increase the intermodal transport links within ECER Malaysia.

What incentives are offered to investors by the ECERDC, both fiscal and otherwise?

JOHN: ECER Malaysia offers investors a comprehensive and attractive incentive package comprising both fiscal and non-fiscal incentives ; this package includes company income tax exemption of up to 10 years from the year when the company derives statutory income, 100% tax exemption equivalent to 100% of qualifying capital expenditure for five years and customised incentives given to companies based on the merit of each case. Non-fiscal incentives are also granted by the respective state governments to approved companies.

They include competitive land prices, land with established infrastructure and flexibility in the employment of expatriates. Facilitation funds have also been made available by UKAS, a public-private partnership unit, and by Unit Peneraju Agenda Bumiputera, a coordinating entity, to finance the construction of basic infrastructure. In addition, we are also working with MITI to draw up special incentives for investors in the Malaysia-China Kuantan Industrial Park on top of the existing ECER incentives.

What is the ECERDC’s perspective on the development of the tourism strategy, and what are the main risks in developing the sector too rapidly?

JOHN: Three key strategies – divided into physical, social and economic components – have been identified to develop a sustainable tourism industry in the ECER, meeting international standards. The physical aspect involves enhancing infrastructure, environmental preservation and land value. The social aspect includes reducing socio-economic inequalities and increasing employment opportunities. The economic aspect incorporates the improvement of physical facilities, the sustainability of ecosystems, quality of life, knowledge and innovative capabilities of the ECER’s population.

The tourism sector in ECER Malaysia is divided into mainland coastal tourism, urban tourism, ecotourism, and heritage and cultural tourism. Tourism initiatives in the ECER are supported by studies that are conducted to ensure that the sector is developed without compromising the environment. ECERDC recognises that the development of a tourism industry cannot come at the expense of the environment and locals. ECER Malaysia’s expansive rainforest, inland waterways and highland areas are prime targets for ecotourism, but at the present time, they are fragmented. To make the best use of its assets, the ECERDC has adopted the concept of bundling the eco-attractions together to produce critical mass and attract investment.