About Us
The Northern Corridor Economic Region development programme is a Government initiative to accelerate economic growth and elevate income levels in the north of Peninsular Malaysia – encompassing the states of Perlis, Kedah, Pulau Pinang and the north of Perak1. The NCER initiative will span from 2007 to the end of the 12th Malaysia Plan period, i.e. 2025.
There are a number of objectives behind the NCER initiative. Firstly, the programme is part of the Government’s commitment to helping the Region maximise its economic potential and closing the development and income gap between the different regions in Malaysia. Secondly, the Malaysian economy aims to move towards higher value-add and knowledge-based economic activities to drive further increases in per capita income. The NCER has the potential to make Malaysia a regional leader in a number of these sub-sectors.
Increasing Value Add from Existing Industries
The overall theme for the Northern Corridor initiative is “increasing value add from existing industries”, emphasising transformation and expansion of the agricultural, manufacturing, tourism and logistics sectors in the Region. The North, already the rice bowl of the country, has the potential to be at the forefront of the transformation of Malaysia’s agricultural sector, embracing commercial-scale farming and the latest technologies to become a modernised food zone, increasing exports of premium fresh and processed agricultural products and helping Malaysia to meet its food self-sufficiency objectives in staple foods such as rice. Already a home to one of the most important sectors of the economy – namely the electrical & electronics (E&E) sector – the NCER initiative will seek to accelerate the sector’s move towards higher value-add activities such as design and R&D. Key tourism assets such as Langkawi and Pulau Pinang will be enhanced to attract higher-yielding tourists, thereby increasing per capita tourist spending and the size of the tourism industry in the Region. Together with the strengthening of existing sectors namely agriculture, manufacturing and tourism, the NCER initiative will also seek to develop new industries in the Region, such as the cultivation of new commercial crops and the promotion of downstream activities in the agricultural sector, the promotion of new manufacturing activities such as biotechnology, sustainable materials and oil and gas, and the leveraging of the NCER’s well-established transport infrastructure and geographical proximity to Thailand and Sumatera to become the processing, logistics and trade centre for the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT).
Growth with Social Equity
Nonetheless, it is recognised that a focus on economic growth alone is insufficient, and if pursued in isolation, will lead to imbalanced development in the Region. In order for economic development to benefit the majority, if not the entire NCER population, the development must be done in a manner that actively seeks participation from, and delivers benefits to, disadvantaged sections of society, which include the rural poor, single mothers and those with low education levels. Current efforts to eradicate poverty will need to be intensified to target the 57,700 households living under the poverty line and 11,900 hardcore poor households in the Northern Region2. The monthly average household income in the Region, at a relatively low RM2,477, also needs to be upgraded. In addition, low educational attainment levels, as well as relatively poor school participation rates, will need to be significantly improved. Indeed, these issues can potentially limit how widely the benefits from economic development programmes will be distributed in the Region. The theme of the NCER initiative therefore is a commitment to growth with social equity – whereby programmes to accelerate growth in the target economic focus areas will be done in a way that emphasises local community involvement, led and driven by the private sector and market imperatives. For example, in the transformation of the agricultural sector, financial incentives will be given to encourage corporations to organise the local communities to achieve the optimum level of scale. In tourism, strategies to attract higher-yielding tourists will be complemented by measures to ensure local communities benefit from increased tourist spending. Amongst others, the handicraft sector shall be professionalised and scaled up by having entrepreneurs bring market insights and organise local communities into production centres.
In summary, while growth with social equity is the underlying theme, the strategy for implementation is to be market-driven and private sector-led. The Government will play a strong supporting role, providing key enablers, tailor-made funding programmes and tax incentives. At the same time, a dedicated implementation organisation will be established to coordinate and drive the implementation of the NCER initiative.
- Four districts in Perak that fall within the NCER are: Hulu Perak, Kerian, Kuala Kangsar and Larut Matang-Selama
- The Northern Region accounts for 17% of Malaysian households living in poverty and 29% of Malaysian household living in hardcore poverty (Source: Ninth Malaysia Plan)