EAST COAST ECONOMIC REGION:

The Next Leap

National Economic Corridors Conference

Le Meridien, Kota Kinabalu

INTRODUCTION

Launching of East Coast Economic Region (ECER) 29 October 2007

INTRODUCTION

2

20 Feb 2008 East Coast Economic

Region Development

Council Act (Act 688)

was unanimously

approved by the

Parliament.

13 Jun 2008 East Coast Economic

Region Development

Council (ECERDC) was

formed as the Federal

Statutory Body under

the Act 688 to oversee

the implementation of

ECER projects and

programmes.

The East Coast Economic Region (ECER) of Malaysia covers the states of PAHANG,

TERENGGANU, KELANTAN and the district of MERSING in JOHOR, covering 51% of

the total area of Peninsular Malaysia.

ROLE OF

ECERDC Accelerate the

implementation of

strategic high impact

projects and programs

towards achieving a

developed Region by

2020.

Facilitate and

coordinate the private

investment, trades,

tourism and

socioeconomic

development in ECER.

BACKGROUND

ECER was established to address the issue

of Regional Imbalance within the region by

tackling the following…

3

INDUSTRY

CLUSTERS

Palm Oil

HUMAN

CAPITAL

Fisheries

Minerals Oil & Gas

Abundant land Livestock

Islands Beaches

NATURAL

RESOURCES

• Multilingual • Multicultural • Educated

Economic growth in ECER leverages on abundant

local natural resources and human capital

ECER : A Resource-rich Region

4

ECER Achievement – Key Game Changers

Strategic

Infrastructure

Industrial

Parks

Special

Economic

Zone (SEZ)

Human Capital

Development

Programs

Incentives –

regional

perspective

Agribusiness

Anchor

Company

Model

Rural-Urban

Integration -

KDAs

GAME CHANGER

5

EAST COAST ECONOMIC REGION - NODES & CORRIDORS

KELANTAN

PAHANG

TERENGGANU

Mersing

S O U T H

C H I N A

S E A

Besut

Tok Bali

Bachok

Kota Bharu Tumpat

Rantau Panjang

Bukit Bunga

Jeli

Kuala Terengganu

Dungun

Kuala Berang

Kerteh

Gambang

Kuantan

Pekan

Endau

Rompin

Mersing

Pulau Tioman

Gua Musang

Kuala Lipis

Raub

Bentong

Bandar Tun

Abdul Razak

Bandar

Muadzam

Shah

East Coast Corridor

Central East – West Corridor

Lumut – Gua Musang – Kuala Terengganu Sub-Corridor

East-West Sub-Corridor

Kuantan – Muar Sub-Corridor

North – South Sub-Corridor

Pasir

Mas

Maran

Temerloh -

Mentakab

NODE 2 Cross Border Development Kota Bharu- Jeli - Besut

NODE 3 Kuala Terengganu Growth

Area KTCC – Kenyir - Dungun

NODE 5 Gua Musang – Lojing Highlands-

Kuala Lipis

Central Spine Development

NODE 6 West Pahang Growth Area

Bentong - Raub

NODE 7 DARA - Jengka

NODE 4 Mersing - Rompin Rainforest to Reef (R2R)

NODE 1 ECER Special Economic

Zone (SEZ) Kertih - Kuantan

NODE 2 Cross Border Development

Kota Bharu – Jeli - Besut Key Clusters Cross Border Trade , Cultural Tourism

Positioning Cross Border Trade and Development

NODE 3 Kuala Terengganu Growth Area

KTCC – Kenyir - Dungun Key Clusters Tourism, Education

Positioning Gateway to Terengganu Islands

& Free Trade Zones

NODE 4 Mersing – Rompin

Rainforest to Reef (R2R) Key Clusters Ecotourism, Island Tourism , Agribusiness

Positioning Rainforest to Reef Experiential Tourism

NODE 5 Gua Musang –Lojing Highlands -

Kuala Lipis

Central Spine Development Key Clusters Ecotourism , Agribusiness

Positioning Ecotourism and AgroTourism focussing on

the Natural Endowments

NODE 6 West Pahang Growth Area

Bentong - Raub Key Clusters Tourism, Logistics

Positioning Gateway to Greater Kuala Lumpur Region

NODE 7 DARA – Jengka

Temerloh – Mentakab - Maran Key Clusters Agribusiness

Positioning Agriculture Development

& Rural Transformation

NODE 1 ECER Special Economic Zone (SEZ)

Kertih - Kuantan Key Clusters High Value Manufacturing, OGP, Logistics

& Education

Positioning ECER SEZ as the Growth Engine of ECER

6

4

3

2

1

1

1

6 5

6

6

1

2

3

4

5

ECER Key Development Areas (KDAs) Concentrated Decentralization Development with Emphasis on Rural- Urban Integration

Highways & Roads: Coast Highway,

Central Spine Road,

Federal Routes

Maritime Ports: Kuantan Port, Kemaman Port,

Kertih Terminal,

Tok Bali Supply Base

Airports: Kota Bharu, Kuala

Terengganu, Kertih,

Kuantan

Rail: East Coast Rail Link

(under development)

Comprehensive Transportation Network in ECER further boost development of

the Region

Strategic Infrastructure

7

Special Economic Zone and Industrial Parks in ECER Fully integrated industrial parks complete with supporting industries , common services and

equipped with primary infrastructure

Pekan

Automotive

Park

Pahang Technology Park

Kuantan Port

Kemaman Port

Kertih Terminal

140 k

m

Kemaman

Heavy

Industrial Park

Gebeng Industrial Area

and Petrochemical

Complex MCKIP

Gambang Halal Park

Kertih Biopolymer Park

and Petrochemical

Complex

– from the catalyst of

concentrated decentralisation

of development into the

hinterland and urban-rural

integration, to the

transformation into a regional

destination for high-value

industry and investment PASIR MAS

HALAL PARK

KERTIH

BIOPOLYMER

PARK

PEKAN AUTOMOTIVE

PARK

PAHANG

TECHNOLOGY PARK

MALAYSIA-CHINA

KUANTAN

INDUSTRIAL PARK

(MCKIP)

GAMBANG

HALAL PARK

Well-connected with highways,

airports and port

Managed by Park Manager

Corporation

Industrial Parks

Special Economic Zone and development of Industrial Parks in ECER plays a key role in attracting

investments into the region which create economic Spill-over to the Local Communities 8

SPECIAL ECONOMIC

ZONE (SEZ)

100% INCOME TAX EXEMPTION FOR

10-15 YEARS Commencing from the year company derives statutory income

Import duty exemption on raw materials, components, machinery, equipment, spare parts and consumables

(or) Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years(or) Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years

Stamp duty exemption for transfer of property/real estate

ECER Incentive Package Special Incentives for Investors in ECER

9

ETEP Programme

50:50 Cost-sharing

Skilled local workforce

Technical training

Incentive to investors

10 Human Capital Development Programs- empower ECER, ETEP & entrepreneur ECER reaching 29 districts across ECER

Nurture

Growth

Expand

10

Private investment

RM111.6bil

108,401

additional Jobs representing

5% ECER Labour Force

9,662

RMK 9 2008-2010

RM1.4bil.

RMK 10 2011-2015

RM4.8bil.

RMK 11 2016-2017

RM1.6bil.

TOTAL Public Investment

RM7.8bil.

Public Investment

(DE Budget)

CAPITAL ECONOMY – Achievement the last 10 years

RM110bil.

Private Investment

200,000 Jobs

60,000 Entrepreneurs

ECER Master

Plan Target 2020

Business Opportunities

DDI 46%

FDI 54%

Achievement

9.7 11.9 15.0 20.2

28.3 37.1

55.8

72.3

84.0

100.9 111.6

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

4,910 102,285 108,401 92,335 54,600 43,247 31,030 28,404 18,280 14,711 8,348

Accumulated Job Opportunities created through Private Investment until Nov. 2017

Cumulative Committed Investment (RM'bil) until Dec 2017

RM

54.3

bill

ion

Rea

lized

Inve

stm

ent

Other FDI – 22%

China – 51%

USA – 12%

Korea & France – 7%

Germany – 3%

Japan & Taiwan – 5%

11

50% Investment

Realised to

date

Ratio Public to

Private Investment 1:14

RM52.5 bil RM60.2 bil

empower

ECER

Agropolitan 1,092 participants

RM2,100 monthly

income with

housing and

facilities

entrepreneur

ECER

Inclusive

Human Capital

Development

Program

29 districts

in ECER

Academic

Program

Skills &

Entrepreneurship

Program

51,400 students

77% increase in academic

performance

14,500 participants

RM1,000 – RM10,000 additional monthly income

TARGETS Poverty Eradication

Entrepreneur Development

Women Participation

Development of Human Capital

Bumiputera Agenda and Inclusiveness

11% of ECER

population

490,000 Beneficiaries

(directly and indirectly)

from ECER Human Capital

Development Program

INCREA$E in

INCOME through

Entrepreneurship

An inclusive approach which

benefited

6,450 participants

RM10,000 – RM300,000 additional monthly income

40,995 jobs

21,196 entrepreneurs

B40 97% Group beneficiaries Male

38%

Female

62%

93% Malay

3.0% Chinese

2.6% Orang Asli &

Others

1.2% Indian

People Economy – Achievement the last 10 years

12

Jobs opportunities

Total investment

Bumiputera companies in ECER

50 Companies

50 Companies

76 Companies

1 Company

RM16.6m 41 Jobs

RM16.22 bil

19,101

177

Investment by sectors

RM5.0 billion 6,498 Jobs RM4.0 billion

7,907 Jobs

RM7.2 billion 4,655 Jobs

Realised investment 75%

The bumiputera community is playing a significant role in the development of ECER -

‘AGENDA PEMERKASAAN EKONOMI BUMIPUTERA’

13

ECER – The Next Leap

14

Source:

Household Income and Basic Amenities

Survey Report 2016 (DOSM 2017)

Median Household

Income 2016

GDP per Capita 2016

59.7

24.7 19.3 15.7

61.3

24.2 20.1 17.0

ECER Pahang Kelantan Terengganu

Number of In-Migrants

Number of Out-Migrants

15

Despite the significant achievements and improvements in the ECER over the past decade, ECER

remains a Lagging Region when compared to other areas in the Peninsular Malaysia in terms of

Productivity (GDP/capita) and Median Household Income

Internal Migration in ECER States 15-64 years old, 2014

–1,600

+500 –800 –1,300

There is a need for continued and concerted Government incentives and socioeconomic and

infrastructure development initiatives for investments and job creation in high value added

industries to further reduce the regional imbalance 15

1 • Low productivity growth especially in the services sector

2

• Industrial activity dominated by commodity-related industries, which are subject to volatility

3 •Relatively small/micro enterprises limit scale economies

4

•High proportion of working age population including youth outside the labor force

The underlying challenges…

GDP per

Capita RM27,268

RM4,694

TERENGGANU

GDP per

Capita RM12,812

RM3,079

KELANTAN

GDP per

Capita RM32,244

RM3,979

PAHANG

GDP per

Capita

ECER

RM23,387

RM3,812

GDP per

Capita RM101,420

RM9,073

KLANG VALLEY

GDP per

Capita

The continued intervention will enable ECER to be DYNAMIC (to the regional/global

changes) and remain COMPETITIVE whilst maintaining its DISTINCTIVENESS

Benefiting 1.6 million people representing 37 % of the total ECER population

and prioritizing the wellbeing of Rakyat whilst creating critical mass for

sustainable growth of ECER

RAKYAT

TOUCH

POINTS

Improving

Livelihood

Provide New

Opportunities

Preventing

Future Poor

Education –

Skills &

Knowledge

16

High Income

Jobs

Graduate

readiness and

employability

Increase the share of high value

activities, worker skills and the

inflow of Knowledge Workers

Adopt adjacency analysis

to discover new growth

drivers across the

economic clusters

Promote/develop large

scale enterprises with the

ability to compete in

global markets

Address the low levels of

youth and female employment

Leverage on growth

nodes and connectivity

development to spur

further development

ICT broadband

infrastructure requires

attention for digitization

and Industry 4.0 to kick

off

Key Strategic Initiatives to drive growth in ECER

Increase Labour

Productivity

Strategic

Initiatives 6

Diversify the economic

base

Facilitate Economies of

Scale

Mobilize the Labour Force

Leverage Connectivity

Enhance Enablers

Source: ECER Master Plan Strategic

Review Study, UKMP 2017 17

Policy Focus

7 Special

Economic

Zone

Establishment

of Logistic and

Trade

Facilitation

Cluster

Environment

Preservation &

Conservation

Human Capital

Development

Programs

to

continue Continued

Incentives on

regional

perspective

Infrastructure

development -

Utilities

(Gas)

Application

of Industry 4.0

– ASEAN

Competency

Centre &

Broadband

enhancement

Policy Focus for ECER Next Leap

18

6%

GDP Growth Target

by 2025

120,000 New Job

Opportunity 2018- 2025

60,000 New

Entrepreneurs 2018-2025

RM180bil Private

Investment

RM70 billion

NEW PRIVATE

INVESTMENTS

from 2018-2025

Splendour of ECER

NEW DEEP WATER TERMINAL (NDWT)

COME AND DISCOVER ECER. YOUR UNIQUE INVESTMENT DESTINATION.

For more information please contact :

ECER Secretariat

Email : secretariat@ecerdc.com.my Web : www.ecerdc.com.my

Tel : +603-2035 0021 or +603-2035 0022 Fax : +603-2035 0020

We invite individuals and corporations to explore the various business opportunities in ECER, especially in Tourism, Oil, Gas & Petrochemical, Manufacturing, Agriculture and Education.