THE Penang economy has fallen victim to the Severe Acute Respiratory Syndrome (SARS) outbreak and other global turmoil, Yang di-Pertua Negri Tun Abdul Rahman Abbas said yesterday.
This year's projected growth had been reduced by half from 6% last year, he said, adding that the shrinkage reflected that the open economy was exposed to external threats posed by global crises.
Therefore, it is very important for us to improve our public health status and economic resilience, he said in opening the fifth session of the 10th State Legislative Assembly.
Although the SARS outbreak had adversely affected the short-term investment climate in China, he said: it is important for Penang and Malaysia in general to continue promoting the China Plus One strategy to convince foreign investors to create and maintain bases here apart from investing in China.
Praising health authorities for taking measures to ensure that local transmission of SARS disease did not occur and healthcare staff for risking their lives to care for affected patients, Abdul Rahman called on people to adopt a wholesome health concept, adding that the outbreak was a reminder for us to place great emphasis on personal hygiene.
Abdul Rahman said apart from enhancing competitiveness in the information communication technology (ICT) sector, we must reduce of dependence on the ICT sector and diversify our economic base by fortifying internal economic strength through local industries.
Through such a multiple approach, the uncertainties stemming from external turmoil can be checked, he said.
He added that the strategy adopted by the state since 2001 under the leadership of Chief Minister Tan Sri Dr Koh Tsu Koon had been apt.
Citing the SARS outbreak, 1997 regional financial crisis, global electronic industry crisis, Sept 11, 2001 terrorist attack on the United States, last year's Bali bombing and recent war in Iraq as factors that had adversely affected the state's tourism and industrial sectors, Abdul Rahman said that we are suffering crossed slowdowns in the two main sectors of our economy.
Our economic growth rate showed an up-and-down pattern, shrinking 4% in 1998, 2% in 1999, 8% in 2000, 3% in 2001 and 6% last year, he added.
To diversify the economy, new growth areas in telecommunication, photonics, software, biotechnology, agriculture based industry would continue to be explored while existing sectors, namely tourism, trade, service industry and agriculture would be re-engineered, Abdul Rahman added.
The success of such efforts would depend on effective state leadership and management, positive private sector participation, and the people's commitment and resilience, he said, adding that apart from exploring new growth areas, existing resources must be fully utilised.