A review of industrial decentralization policy in Peninsular Malaysia

Abstract

Some state in Malaysia have, in fact, become relatively poorer in recent years. One way to accelerate the economic development of the relatively poor states is to encourage the establishment of manufacturing industries in such states. In order to achieve this, the present policies on dispersal of industries should be modifies. Based on the author's empirical study of 292 new manufacturing establishments in Peninsular Malaysia, the author suggests that: 1) There is an urgent need for a "National Policy of Industrial Estate Development and Administration". 2) The Federal Industrial Development Authority (FIDA) should be brought under the jurisdiction of the Prime Minister's Department. 3) FIDA should establish regional offices in every state. 4) The country could be divided into three areas for purposes of granting incentives to industries: the top priority area, the intermediate priority area, and the low priority area. 5) A new programme of transport development has to be incorporated into the Third Malaysia Plan.