BN Manifesto to set up IOFC in Seberang Perai is realistic — Economist
GEORGE TOWN — The Penang Barisan Nasional’s (BN) manifesto promising to set up an international offshore financial centre (IOFC)in Seberang Perai is realistic to diversify the economic sector in the state which is now focused on the manufacturing industry, an economist said today.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng said today the proposal was timely because the location of the Pearl of the Orient was ideal to attract foreign investments.
He said the pledges in the manifesto were very realistic to spur economic development and create more job opportunies, thus speeding up development in the area.
“The proposal to set up an IOFC is very apt because it will provide the right platform for Penang, which is seen as needing to diversify its economic sector,” he told Bernama here today.
Dr Yeah said Penang’s economy, which all this while was driven by the manufacturing industry, must turn to other sectors like services, finance and technology- and innovation-based industries to maintain long-term revenue growth.
He said Penang was ideal for the setting up of the IOFC because it was a magnet capable of attracting capital flow from foreign investors due to its location.
“Setting up an IOFC in Penang can be seen as an achievement, like Singapore which has become a safe haven for deposits and asset management for foreign investors,” he said.
Moreover, he said, the state had a large group of foreign investors and was capable of providing cross-border financial flow facilities to foreign companies already operating in the region.
Dr Yeah said Penang was suitable to grow into a financial hub because it was a special place that could attract high-networking individuals like those in Indonesia to invest in education and medical services.
He also said that the establishment of an IOFC would have a high impact on the support industries like accounting and information communication technology (ICT).
This would indirectly benefit sectors related to finance and provide spillover effects for the locals, he said.
“The IOFC financial flow centre wil act as a revenue generator in terms of transaction fees and in turn bring about an increase in income generation,” he said.
It is understood that the IOFC proposed by the Penang BN will be modelled after the Labuan International Offshore Financial Centre which has offered international financing and business services since 1990.-BERNAMA-