Penang mulls forming Special Financial Zone

Malay Mail
Malay Mail

GEORGE TOWN, May 30 — Penang Chief Minister Chow Kon Yeow said Penang is looking into the prospect of forming a Special Financial Zone (SFZ) in the state as an engine of growth.

The Penang lawmaker told the state legislative assembly that Penang Institute is conducting a study to evaluate the sentiments on the formation of the zone.

He said the establishment of a SFZ will increase business efficiency, increase capital injections and eliminate barriers to trade.

“At this moment, the research is still underway and in the discussion stage with the relevant parties,” he said in his winding-up speech at the state legislative assembly today,

He said the state will then submit an application to the federal government to establish an SFZ in the state.

Earlier, Lim Guan Eng (PH-Air Putih) had said the establishment of an SFZ in Penang will help to increase investments and spur economic growth.

He said both the Chinese Chamber of Commerce and Indian Chamber of Commerce are fully supportive of the establishment of a SFZ in Penang.

Meanwhile, on the state’s finances, Chow, who is also Padang Kota assemblyman, said the state is considering appealing for an alternative financial assistance from the federal government through the Ministry of Finance (MOF).

He said MOF offers other forms of financial assistance such as a provision of advance to the state based on the state’s actual deficit in the previous year.

“Currently, only a few states have applied for an advance from the MOF,” he said.

He said another alternative is to apply for a loan from the federal government.

“This method is more suitable to implement large-scale projects and high impact projects,” he said.

Chow said Penang is the second state with the lowest outstanding loan balance owed to the federal government after Selangor, at RM36.73 million.

Therefore, he said if the state were to take more loans from the federal government, it would hinder the state’s mission of becoming debt-free from the federal government soon.

He said the state finance department will continue to evaluate this matter from time to time and bring it up for the state exco to discuss if there is a need to obtain loans from the federal government.