Mega projects might boost sentiments.
A series of mega projects announced since last year might help boost Malaysia’s flagging economy. The latest is the launch of the Digital Free Trade Zone (DFTZ) which is envisioned to seal Malaysia as a digital hub in Southeast Asia and serve as a gateway to the ASEAN market. The zone will encompass fulfilment, global supply chain, payment gateways, training and employment as well as serve as a platform to encourage traditional brick-and-mortar businesses to transition into e-commerce.
Giving prestige to this project is the recent announcement by Alibaba that it will set up a logistics and e-commerce hub in the zone to boost small and medium-sized companies. To be located near the Kuala Lumpur International Airport, the facility will act as a warehouse and centralised customs clearance for Malaysia and the region by end 2019.
Another mega project announced is the RM200 bil Carey Island port city development. Scant details are available – what is known is that Sime Darby, a Malaysian GLC (Government-Linked Company) is the land owner of the island. Carey Island is filled with oil palm plantations and processing facilities as well as scattered indigenous (Mah Meri) settlements. It is located near Port Klang, the main port in Peninsular Malaysia.
Earlier, a massive RM55 billion East Coast Rail Link (ECRL) was also announced. It will connect Port Klang with Kuantan, and Kuantan with Kelantan along its 600km tracks. This project will cut short the shipping time from Shenzhen to Port Klang by an impressive 30 hours, and possibly bypass Singapore.
The project, to be funded and constructed by Chinese companies, is set to begin construction in 2017. To be completed within 5 years, the rail network is expected to create 8,650 jobs by 2020. The Chinese are reportedly keen to kickstart the rail project as soon as possible due to concerns that the Straits of Malacca might face obstacles in its pathway in future should the US carry through with its threats of war (trade or otherwise). The ECRL will ensure that China continues to receive shipments of resources from Europe and the Middle East.
Meanwhile, Malaysia’s only casino destination, Resorts World Genting at Genting Highlands will see the opening of the world’s first Twentieth Century Fox World theme park by end 2017. The theme park forms part of the 10- year Genting Integrated Tourism Plan (GITP) which will incorporate faster new cable cars with twice the present capacity, a one million sq-foot new lifestyle mall (Sky Avenue), Genting Premium Outlet, a new show arena, luxury hotels and the doubling of rides for the current indoor theme park. Genting hopes to attract 30 million visitors by 2020.
The Malaysian general election is due to be held before June 2018. Until then, expect more announcements to boost confidence in the economy.