Abstract
This paper examines prerequisites for a successful interstate economic corridor development program in a country with a federal system of government through an in-depth study of the design, implementation, and the developmental impact of the Northern Corridor Economic Region (NCER) in Malaysia that encompasses the states of Penang, Kedah, Perak, and Perlis. The analysis suggests that the NCER has the potential to leverage on the core strengths of the state of Penang—global connectivity, mature business ecosystem with a strong presence of multinational enterprises, and sizable talent pool—in order to redress the widening interregional and urban–rural development divide. While it is too early to assess the full outcome of NCER initiative, a potential problem looms in the future. The Northern Corridor Implementing Authority (NCIA), charged with implementing projects in the NCER, is structured with no formal positions allotted to planning officials from the member states. This will not pose problems in implementing projects that are in broad alignment with the interest of the states. Conflicts will arise, however, when state and NCIA views on projects differ. This potential problem can be overcome by restructuring the NCIA to allow for the formal inclusion of planning representatives from member states.
Highlights
Economic corridors have gained popularity over the past 2 decades as a vehicle for subregional economic development
Of the five regional corridors that Malaysia has identified, we focus on the Northern Corridor Economic Region (NCER) which encompasses the four northern states of Peninsular Malaysia (Penang, Kedah, Perlis, and Perak)
By distilling characteristics commonly accepted in various economic corridor programs and related policy documents, we come up with the following definition to guide the ensuing analysis in this study: The economic corridor is an integrated framework of economic development within a designated geographical area, which places traderelated infrastructure at the core, but goes further to encompass interconnected issues of public policy, regulations, and operational practices required for stimulating economic growth and development within the designated area
Summary
Economic corridors have gained popularity over the past 2 decades as a vehicle for subregional economic development. Economic corridor development as a vehicle for infrastructure funding has gained added impetus from the initiative of the People’s Republic of China (PRC) to set up the Asian Infrastructure Investment Bank (AIIB), to finance a number of economic corridors in the region (Zhang 2015). Construction work on the first AIIB-funded corridors, China–Pakistan Economic Corridor, involving an estimated investment of $54 billion, has already begun Notwithstanding this policy emphasis, a well-developed knowledge base relating to the development potential, and the preconditions for designing and implementing economic corridor programs, and assessing their impact is lacking. Of the five regional corridors that Malaysia has identified, we focus on the Northern Corridor Economic Region (NCER) which encompasses the four northern states of Peninsular Malaysia (Penang, Kedah, Perlis, and Perak) It is at a more advanced stage of implementation and fits better within the general idea of an economic corridor development strategy.
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