Foreign Investment and Achievement of Balanced Development in NCER: A Critical Review

After more than three decades since industrialization, Malaysia has proved a viable investment location for offshore production operations, partly because of the emphasis on foreign direct investment, especially in the manufacturing sector, in Malaysian economic policy. The Northern Corridor Economic Region (NCER) is a government initiative for accelerating economic growth and elevating income levels in northern Peninsular Malaysia, encompassing the states of Perlis, Kedah, Pulau Pinang and northern Perak. The development program in NCER is aimed at assisting the region to maximize its economic advantages and potentials, and decrease income gaps between the states. The manufacturing industry sector has proved an important player in economic development, particularly the sub-sectors of Electrical and Electronics (E E). This article will critically discuss the investment pattern of manufacturing industry in the NCER based on investment data retrieved from MIDA. Discussion revolves around the role of foreign investment in the manufacturing sector of the NCER and the prospect of achieving the developmental agenda of balance between the afore-mentioned states. The findings from the investment data analysis show that, in order to achieve the objective of balanced NCER development, reliance on foreign investment will need to be reassessed and, at the same time, high impact domestic investment in the lagging regions has to be encouraged.