THE ROLE OF CORPORATE GOVERNANCE IN THE CURRENT GLOBAL ECONOMIC

The current global economic challenges have put MNC and TNC in the front and centre of attention. They are under the microscope, their past actions are being scrutinized and their behaviour and actions going forward are being closely watched. They are expected to rise to the challenge and steer their organizations and corporations out of troubled waters that the world economy is now in. The business world is witnessing massive upheaval and scandalous revelations. The crisis calls for a re-examination of the corporate culture and the way business has been done. In some of the scandalous revelations in the US, it has proven that business as usual is not an option any more. That model has been broken. A new way needs to be found. It calls for active, innovative, aggressive corporate governance and bold decisions. In view of this, effective corporate governance has never been more important.

Periods of economic stress test the ability and capability of MNC and TNC and demands that they rise to the challenges. Crisis tests an individual’s abilities more than the good times ever do. Undoubtedly, most leaders will be tested by a few minor and major crises during their tenure. How the individual steers through such troubled times will show the mettle he or she is made of. The MNC and TNC of today are being tested on several levels, both internally and externally. While they may have some control over their internal environment, they certainly do not know what awaits them externally in the current volatile business environment. Loyal and hardworking employees are the best asset of any organization, and yes, even in the high tech era and in the computerized age. It is important to retain talent and more so during difficult times. Strengthen and retain what you have.

Pull your talent together and take decisive decisions. Do not let good talent get away. It will be more difficult to find them when the recovery comes, which will come, just as the sun will rise again tomorrow. Today, the MNC and TNC is expected to be pro-active in contingency planning, to anticipate and prepare responses. Expediency in the appropriate response can negate losses. As the Chinese word for crisis, Wei ji, is composed of two characters signifying “Opportunity” and “Danger”, the current crisis with its many downsides also offers opportunities. It is necessary for business leaders and MNC and TNC to seek out the possibilities in these challenging times. You must do this to remain relevant, sustainable and competitive. Corporate governance is a demanding role even during times of relative calm. It calls for balancing of internal and inter-business relationships and more so during a crisis, when courage and desire to lead well and effectively are put to the test.

Businesses are downsizing, retrenching and reducing the number of work days. Many of the institutions that were household names around the world have disappeared and the workings of their internal corporate culture has been shaken to the core. The faith and confidence of their employees, shareholders and customers has been shattered and it will be an uphill task to regain their trust and rebuild the company’s reputation. In the fast paced world of business, MNC and TNC must not only multi-task and cater to the varied and different demands on their time from the multitude of constituents; but they must be ahead of the business cycle in ensuring the continued survival of their businesses. While the bottom line and the financial performance of a company is important, there is more to running a corporation than just bottom lines. The continued survival of the company and that of the MNC and TNC will depend on the corporate governance and skills demonstrated in enhancing competitiveness and efficiency of the corporation; retaining and building confidence of their employees, maintaining trust of shareholders and retaining loyalty of customers.

In the current difficult environment MNC and TNC are required to deliver far more than they have done so in the past. A lot rests on your shoulders as business leaders – shareholders, employees, customers and the community at large demand total commitment from business leaders to deliver on your promise to provide the best service and quality products with honesty and integrity. They will accept nothing less.

THE OPPORTUNITIES AND IMPLICATIONS PRIVATISATION IN MALAYSIA

Upon gaining independence, the Government, inevitably had to take the leading role in developing the country, in view of the limited capacity of the local private sector at that time in terms of entrepreneurial, managerial and financial resources. The kind of egalitarian principles which influenced many developed countries to nationalise or even to become communist also affected Malaysia with its many imbalances and disparities. From the provision of utilities such as roads, water, electricity, telephone, postal services, etc., the Malaysian Government moved swiftly into purely economic activities. Within a very short period hundreds of Government owned companies were formed to do, among other things, housing development, trade, run hotels, estates, mines, shipping, airlines, construction and manufacturing. By the 1980`s some 10 billion ringgit was directly invested in about 1,000 companies.

Guarantees total 25 billion ringgit. While some succeeded admirably, most failed. Even those which are monopolistic are not able to pay their way, much less make a profit. The pendulum had obviously swung too far. While we cannot say the policy is a total failure, for much experience had been gained from it, we cannot continue to pay this very high price.Given this scenario, the Government at the beginning of this decade, decided upon privatisation as a way out. At that time privatisation was not the world trend that it is now. But the many failures and the high cost of Government involvement left us with no choice but to try this unproven approach. Besides, the country now has the infrastructure in place and the private sector is better equipped with man, money and skills to make privatisation feasible. In Japan, while the private railways make profits, the Japan National Railways (JNR) when it was owned by the Government, lost money constantly.

Now the JNR has been privatised and in its first year of operation the companies have made profits. Apart from the new owners and probably some key executives the people manning the JNR are the same. Yet the performance is different. The assumption must be that the management input is different. Management is not one of Malaysia`s strong points. In the first instant we do not have enough managers. Of the ones that we have, a good number are unfortunately mediocre. Some we have seen are downright dishonest. If privatisation is going to remedy the ills of nationalisation then we must have good managers. The Government cannot afford to have too many failures in the privatised companies. We do not want to be forced to take them back. We do not want to involve ourselves in business again. While the Government will exercise every care to ensure that Government enterprises will not fall into the wrong hands, we hope that responsible institutions in the private sector such as merchant banks, business consultants and intending entrepreneurs will study very carefully the ability of the companies taking over Government services or enterprises.

There are many good examples in other countries. We must learn from them. If necessary, we should use their expertise, their direct involvement even. Let us admit that we do not know everything. There is so much we can learn from others with their experience. If the Government happens to award the enterprise to companies that are partly owned by foreigners, it is not because the Government is not patriotic or un-Malaysian. We want to save the nation from disasterous mistakes. But that does not mean that capable locals cannot on their own succeed in taking over the services we wish to privatise. The fear of price increases is greatly felt with privatisation of monopolies where prices may be determined by the need to earn super normal profits. It is the function of the Government therefore to prevent such a move by the private sector through the establishment and enforcement of an effective regulatory mechanism.

Such a mechanism will not only have to regulate prices of services but also its quality and geographical coverage. In the licence to Syarikat Telekom Malaysia for example, the company is bound to continue with the unprofitable services to the rural areas. But we would like to assure interested parties that the Government does not wish to regulate unless the situation compels it to do so.Fears of strategic industries falling into the hands of foreigners can be easily circumvented through specific provisions in the instruments enabling the industry to be privatised. Fears of the privatised entity undertaking actions which are injurious to national interests can also be overcome through this means. Hence, although it is admitted that there are dangers attached to the policy, safeguards can be built-in to circumvent such dangers. As we can see, privatisation does not mean that the Government will be absolved of its social responsibilities.

The Government will still maintain its role as the guardian of public welfare. This will be done through minimal regulatory measures rather than through direct participation in the production of goods and services. Where subsidies are unavoidable these will continue to be provided but on a more selective basis and to deserving cases. The Government will remain accountable to the public and must therefore be responsible for ensuring that privatisation will be beneficial to all concerned. The Government truly believes that privatisation will on the whole be beneficial to the nation and hence it is fully committed to it.

POSITIONING THE CITY OF KUALA LUMPUR IN THE GLOBAL CITY SYSTEM

In the age of globalization, it was argued that major cities in the region should be positioned in the global city system, in order for these cities and their immediate regions are effectively developed. As the urban and regional economic prospects increase reliance on the participation in the fast moving international and global economy, cities that are unable to adapt to these globalchanges and requirements would be marginalized. The marginalisation of major cities from the mainstream of global development will affect their progress and in most cases be determined by exogenous forces. At the same time, the emergence of new global economic and informational societies has created a new form of spatial development, the global cities. Such status was achieved only when a city and its region becomes a major center of international finance, transnational corporate headquarters, related high-level and specialized services, information processing and advanced telecommunications, a city with an international command and control functions (Sassen, 1991). To what extend the above criteria and indicators really described the position of cities in underdeveloped and developing economies? It is the intention of the paper to deal with such a question, with particular reference to the city of Kuala Lumpur. Although Kuala Lumpur has substantially part of the international economy for the past three decades, it was argued that the city exercises little of the global or even regional control functions that world cities proposes. For this reason, the authors argued that Kuala Lumpur and possibly other cities in the rapidly developing economies be positioned in a different setting, and with different criteria and indicators, as compared to the existing global cities.

KUALA LUMPUR TOWARD A COMPETITIVE GLOBALIZING CITY-REGION

Kuala Lumpur is one of the globalizing cities in Asia Pacific region. Competing with Singapore, Seoul, Hong Kong, Sydney, Jakarta and Bangkok, Kuala Lumpur has sought to reposition herself as a potential centre for global capital by implementing various strategies and developments. The repositioning of Kuala Lumpur in this global system of cities has brought about changes and adjustments of her city-region. Prior to the era of globalisation, the Klang Valley as a city region of Kuala Lumpur, has been recognized as a coherent urban planning region, covering four districts of Selangor state; Gombak, Klang, Petaling and Hulu Langat as well as the Federal Territory of Kuala Lumpur. However, from the late 1980s, Kuala Lumpur has strategisted policies what might be understood as a “global shift of development”. Through the development of mega projects, i.e., Kuala Lumpur City Centre (KLCC), Kuala Lumpur International Airport (KLIA) and Multimedia Super Corridor (MSC), the city-region of Kuala Lumpur had been transformed, restructured and now become a high-tech city-region, known as Kuala Lumpur Metropolitan Area (KLMA), incorporating the districts of Sepang and Kuala Langat in addition to the existing Klang Valley region. In this context, the city-region of Kuala Lumpur played a key role to the future economic success of Malaysia within the context of the highly globalized economy, providing Kuala Lumpur a new dynamic and driving force of competitiveness toward achieving a status of global city. However, this has rise a question of, to what extent these forces have been transforming Kuala Lumpur particularly in the process of restructuring the functional landscapes of the city-region, in order to be more competitive and sustainable in the near future.

WILL MALAYSIAN NEW DEVELOPMENT STRATEGIES CAN POSITIONING KUALA LUMPUR IN THE GLOBAL CITIES?

Affirmative action as a policy response to ethnic riots is a fairly unusual, indeed unfashionable, policy response, partly because inequality and conflict have a complex and much debated relationship. General vertical income inequality, measured as the gap between poor and rich, has not been found to have a statistically significant relationship with the onset of civil unrest or conflict (Collier & Hoeffler, 2000; Fearon & Laitin, 2003). And yet, an accumulating body of evidence suggests that horizontal inequality, inequalities between identity or ascriptive groups on the multiple and inter-related planes of the political, the socio-economic, and the cultural, may be politically explosive (Stewart, 2001). The research examines these links between ethnicity, inequality and conflict among ethnic groups using a multidimensional approach, with a view to identifying those policies which might work in other situations of ethnic conflict.

Taking Malaysia as the model it is investigate and measure to what extent inequalities between ascriptive groups have fallen in that country between 1970 and 2000, a period during which various affirmative action policies were applied in fields ranging from education and government employment to business. Horizontal inequality in the key indicator of income is re-assessed, using an innovative group Gini decomposition method that can be applied in a relatively data scarce environment, which allows for the consideration of changes over time in the variance of the income distribution as well as changes in the means - which only provide a partial view of income inequality. In addition, changes in access by ethnic group to educational opportunities; the distribution of employment by sector and by occupation; urbanisation and housing distribuition; ownership of household assets such as houses and cars; and infant, toddler and maternal mortality rates are all considered individually, while a multi-dimensional index of socio-economic inequality is subsequently constructed for comparison purposes.

Regional disparity has long been recognized in Malaysian development scenario, particularly between the more-developed western region and the less-developed eastern and northern regions in Peninsular Malaysia. All the Five Year Malaysia Plans, starting from the Third Malaysia Plan (1976-1980) have placed special emphasis on the objectives and strategies of regional development. However in the decade of nineties, in conjunction with globalisation era, the direction of Malaysian development plans have been changed, towards becoming more competitive in the global economy. To some extend after 30 years, the issue of regional disparity is remains unsolved, and yet new emphasis on global competition has been dominated in development strategies and plans. However, analysing from the current achievement of national development, the position of Kuala Lumpur in the global cities network still unsignificant, reflecting the uneffectiveness of the strategies toward strengthening Malaysian competitivenes in global era.

URBAN MANAGEMENT VS URBAN GOVERNANCE IN GLOBALISATION ERA

We are living in a rapidly urbanizing world. Today half of the world population lives in urban area, yet as recently as 1975 the urban share was just over one third. Within these global averages, however, there are major differences. The urban share of the population in year 2000 in the developing countries for example was 76%, as compared to 40% in the less developed countries. In Africa and Asia the shares were 38% and 37%, whereas in Latin America, Northern America, Europe and Oceania the proportions were between 70%-77%. For the world as a whole, the urban share is expected to rise to 60% by the year 2030 at which time the shares for Africa and Asia are projected to reach 55% and 53% respectively.

Of the additional world population expected between 2000 and 2015, nearly one billion will be added in urban areas compared to only about 125 million in the rural areas. Virtually all of this growth will take place in developing countries. Urbanisation if well managed, is associated with economic growth and development, providing vital opportunities for economic and social advancement; whereas if not managed properly, may result in social disintegration, more poverty among some sectors and environmental degradation.

In the context of Peninsular Malaysia, according to the National Physical Plan, the level of urbanisation has increased from 54.3% to 65A% in the inter-censual period of 1991-2000, and it is expected to increase to 75% by the year 2020. Urbanisation in Peninsular Malaysia is also marked by the increasing primacy of the three main city regions of Kuala Lumpur, George Town, and Johor Bahru. Urbanlsation can be viewed as a positive or a negative force. The difference lies in whether the urbanisation process is planned, controlled and managed in a proper manner, or otherwise.

One of the main challenges of urbanization is to make sure that our urban area is competitive enough in achieving sustainable urban development. The potential between economic growth and environmental sustainability must be realised to its fullest. Ways must be developed to achieve pro-poor economic development and also to reduce the environmental impact of economic growth and urban production, both on the towns and cities themselves, and on the global environment - as urban economic development is often influenced by changes in national and global economic- Even when economic growth occurs, it does not necessarily benefit the poor. Therefore ways must be found to develop urban economic that are diverse, resilient and also provide job opportunities that are accessible to the poor and the disadvantaged.

The urban economy is of supreme importance to the economic development of developing countries in particular. We need to encourage the town and cities to be competitive to attract investors to invest in our urban area. While at the same time, protect the very resources including the environment, that is crucial in developing the urban economy and attracting the investors in the first place. Besides that, urbanisation is also associated with social and political changes, which can undermine traditional social network and result in increased inequity and exclusion. Therefore, ways must also be found to increase equity and ensuring political and social inclusion. Often this means that ways must be found to extend infrastructure provision to keep pace with urban growth, in a way that is financially and environmentally sustainable, while ensuring access of an adequate level of services to the poor and the disadvantaged.

Currently, the capability of governance of the agencies responsible is recognised as being very crucial in achieving sustainable urbanization. Therefore ways must be found to enhance urban governance to deal with the challenges of managing the growing towns and cities. At the same time, economic, environmental and governance tensions make it difficult to realise the benefits of interdependence between rural and urban areas. In this context, ways must be found to develop and implement economic policies, resource allocation, environmental management strategies, and governance arrangements that recognise and enhance the complementary rates of urban and rural areas in sustainable development. Indeed both urban and rural areas are interdependent. Sustainable land resource planning and management is the core of physical environmental management and biodiversity conservation. Concepts of sustainable development that integrate development and natural resource management objectives should be an integral part of a country's planning process and this should be reflected in all land use policies and plans. Such a spatial planning document for Peninsular Malaysia was launched recently.

The National Physical Plan (NPP) contains 36 policies related to land use and development. The successful implementation of the NPP depends on the collaborative efforts among all relevant stakeholders including private, Government agencies, NGO and communities. This Dialogue aims at imparting a better understanding of the policy's objectives and purpose and will among others, address issues related to urbanization. It also hopes to create further awareness and opportunity for participation from civil society in its implementation. This engagement will undoubtedly contribute to better environmental cooperation and collaboration among the NGOs and Government.

The responsibility to ensure a .sustainable development does not fall on the Government entirely. It is important that we all work together, making use of opportunities provided for public participation in the process. We need the involvement of all, in particular the NGOs. The Ministry would like to view MENGO as a partner in managing our environment. We regard NGOs to be a valuable asset since they have the advantage to be in -the midst of things and the ability to be close to the people. Therefore, they have better opportunity to disseminate information and instill the feeling of responsibility to the masses. At the same time the Government would like the NGOs to be our eyes and ears so that we are informed of what is happening on the ground.

In this regards, the Government welcomes positive and constructive criticism so that we can continuously improve our programme and activities in enhancing the quality of the environment. It is therefore fitting that this Dialogue should focus an getting to know the problems or challenges faced by the relevant Government agencies, in developing urban areas and the proposed plans and programme to overcome them. So that together, the Government and the NGOs can collaborate in addressing the gaps.

KUALA LUMPUR...IN GLOBAL CITY-REGION OR LOCAL CITY-REGION?

INTRODUCTION

There are now more than 300 city-regions around the world with populations greater than one million. At least twenty city-regions have populations in excess of ten million. They range from familiar metropolitan agglomerations dominated by a strongly-developed core such as the London region or Mexico City, to more polycentric geographic units as in the cases of the urban networks of the Randstad or Emilia-Romagna. Everywhere, these city-regions are expanding vigorously, and they present many deep challenges to researchers and policy makers as we enter the 21st century. The processes of world-wide economic integration and accelerated urban growth make traditional planning and policy strategies in these regions increasingly problematical while more fitting approaches remain in a largely experimental stage. New ways of thinking about these processes and new ways of acting to harness their benefits and to control their negative effects are urgently needed.

The concept of global city-regions can be traced back to the "world cities" idea of Hall (1966) and Friedmann and Wolff (1982), and to the "global cities" idea of Sassen (1991). We build here on these pioneering efforts, but in a way that tries to extend the meaning of the concept in economic, political and territorial terms, and above all by an effort to show how city-regions increasingly function as essential spatial nodes of the global economy and as distinctive political actors on the world stage. In fact, rather than being dissolved away as social and geographic objects by processes of globalization, city-regions are becoming increasingly central to modern life, and all the more so because globalization (in combination with various technological shifts) has reactivated their significance as bases of all forms of productive activity, no matter whether in manufacturing or services, in high-technology or low-technology sectors. As these changes have begun to run their course, it has become increasingly apparent that that city in the narrow sense is less an appropriate or viable unit of local social organization than city-regions or regional networks of cities. One tangible expression of this idea can be observed in the forms of consolidation that are beginning to occur as adjacent units of local political organization (provinces, Länder, counties, metropolitan areas, municipalities, départements, and so on) search for region-wide coalitions as a means of dealing with the threats and the opportunities of globalization. In this process, we argue, global city-regions have emerged of late years as a new and critically important kind of geographic and institutional phenomenon on the world stage.

KUALA LUMPUR CITY-REGION…GLOBAL OR LOCAL?

The dominance of a nation in a global economy has been directly linked to the emergence of global city; which become the global command and control centre, such as New York, London and Tokyo. Drawing on Kuala Lumpur’s experience and its city region, this thesis aims to analyse the city’s transformation, positionality, competitiveness as well as its niches in the global city network system particularly in the context of Asia Pacific region. The objectives of this thesis are explored and revealed through three main parts of this research. The first part concentrates on the description of the spatial and functional transformation of Kuala Lumpur and its city region, through its national and supranational economic engagement over the past four decades. Based on secondary data, the study reveals that Kuala Lumpur city region had experienced substantial spatial and functional transformation, beginning particularly in the early 1990’s.

This suggests that Kuala Lumpur has responded positively to the exogenous and endogenous forces, and is integrated in the mainstream of global economy. Nevertheless, do these changes elevate Kuala Lumpur to a global status, often measured with reference to existing indicators of global cities? This question has been dealt in the second part of the research. Using a set of questionaire, a field study has been carried out on 61 respondents, comprised chief executive officers from two groups of samples. These groups are, firstly FORTUNE Global 500 firms operating in the Klang Valley; and secondly the MSC’s (Multimedia Super Corridor) status companies. Perception of respondents pertaining to the city’s indicators, positionality, competitiveness and its niches are then measured in likert scale and statistically tested using Mann-Whitney U test.

Hamzah Jusoh in his PhD research on Kuala Lumpur in Asian Pacific City Regions Network showed that Kuala Lumpur’s achievement has to be complied to the same set of indicators, applicable to cities in developed countries. This is inevitably to ensure Kuala Lumpur to be as competitive as cities in the developed countries. By using validated indicators and measured through the Index of Global Cities Indicators, the study reveals that the global-city region of Kuala Lumpur has positioned herself at the intermediate level in the global city network system, with the index value of 61.61%. What does its mean in term of competitiveness, comparative advantages and niches of Kuala Lumpur in the Asia Pacific region? This has been dealt in the third part of the thesis, which focuses on a comparative study with selected global cities in the Asia Pacific region. Based on the primary data sources obtained from questionaires as well as supporting secondary informations, this study reveals that Kuala Lumpur is relatively positioned in a less dominant role compared to the other cities in the region, such as Singapore, Hong Kong, Sydney and Seoul. However, its position has been somewhat better than Shanghai and Bangkok.

THE CLASSIC SPATIAL THEORY 0F CITY-REGIONS

GROWTH POLE THEORY

No regional development concept or theory has received greater attention among economists, regional planners, governments and development agencies than growth pole theory. The growth pole concept originated from British Economist, Sir William Petty (1623-1687), who was fascinated by the high growth in London during the 17th century and conjectured that strong urban economies are the backbone and motor of the wealth of nations.

However, it was the French Economist, Francois Perroux (1903-1987), who is credited with formalizing and elaborating on the concept. Since then, the growth pole concept has been subject to various definitions and interpretations, and its application has spread across the globe considerably. Monsted (1974) and Parr (1999) agree that the widespread use of the growth pole concept is reflected in the number of conferences and publications on the subject, as well as the apparent positive outcome of its application in developed countries in Western Europe, particularly in Great Britain, France and Italy.

Regional development based on growth pole strategy became popular in developing countries in the 1960s, mostly in Latin American Countries, with national governments filled with optimism about its benefits for economic growth and social progress (Angotti, 1998). Ironically by the 1970s, the interest in the growth pole concept in developing countries had dwindled, after its application failed to yield the anticipated outcome (Gilbert, 1974; Conroy, 1973; Moseley, 1973). This fact notwithstanding, there is still some belief in the growth pole concept today, as could be revealed in the literature and various programs aimed at expanding development via viable cities.

CENTRAL PLACE THEORY

Central place theory is a spatial theory in urban geography that attempts to explain the reasons behind the distribution patterns, size, and number of cities and towns around the world. It also attempts to provide a framework by which those areas can be studied both for historic reasons and for the locational patterns of areas today. The theory was first developed by the German geographer Walter Christaller in 1933 after he began to recognize the economic relationships between cities and their hinterlands (areas farther away). He mainly tested the theory in Southern Germany and came to the conclusion that people gather together in cities to share goods and ideas and that they exist for purely economic reasons.

Before testing his theory however, Christaller had to first define the central place. In keeping with his economic focus, he came to the conclusion that the central place exists primarily to provide goods and services to its surrounding population. The city is in essence, a distribution center. To focus on the economic aspects of his theory, Christaller had to create a set of assumptions. He decided for example that the countryside in the areas he was studying would be flat, so no barriers would exist to impede people's movement across it. In addition, two assumptions were made about human behavior: 1) Christaller stated that humans will always purchase goods from the closest place that offers the good, and 2) whenever demand for a certain good is high, it will be offered in close proximity to the population. When demand drops, so too does the availability of the good.

In addition, the threshold is an important concept in Christaller's study. This is the minimum number of people needed for a central place business or activity to remain active and prosperous. This then brings in the idea of low-order and high-order goods. Low-order goods are things that are replenished frequently such as food and other routine household items. Because these items are purchased regularly, small businesses in small towns can survive because people will buy frequently at the closer locations instead of going into the city.

High-order goods though are specialized items such as automobiles, furniture, fine jewelry, and household appliances that are bought less often. Because they require a large threshold and people do not purchase them regularly, many businesses selling these items cannot survive in areas where the population is small. Therefore, they often locate in large cities that can serve a large population in the surrounding hinterland.

CITY-REGIONS...TOWARDS COMPETITIVE ADVANTAGES

A city can be understood on more than one spatial level. Department of Communities and Local Government, United Kingdom, 2006 defined a 'city-region' is the economic footprint of a city and is defined by the ways that people live their lives and the economic relationship between a city and its surrounding area (including smaller cities and towns and rural hinterlands located there). Increasing the extent to which economic development decision-making is managed at the city-regional level is therefore an important means of improving economic outcomes including those in the most deprived areas. A city's success depends heavily on its connections with neighbouring towns and cities in its region and its rural hinterland - economically, culturally and socially. The city-region takes into account functional economic markets such as travel to work areas and labour markets. As such, city-regions have flexible boundaries traversing administrative ones.

City-Regions are the enlarged territories from which core urban areas draw people for work and services such as shopping, education, health, leisure and entertainment. The City-Region is a functional entity within which business and services operate. City-regional economies play a strong role in driving forward the economies of their regions. The city-regional scale reflects the 'geography of everyday life' rather than administrative boundaries and presents us with opportunities to develop policy that reflect and support the functioning of that City-Region. Below is a theoretical diagram of a city-region, depicting the travel to work area, contiguous built up area as well as administrative areas.

The term city region has been in use since about 1950 by urbanists, economists and urban planners to mean not just the administrative area of a recognisable city or conurbation but also its hinterland that will often be far bigger. Conventionally, if one lives in an apparently rural area, suburb or county town where a majority of wage-earners travel into a particular city for a full or part-time job then one is (in effect) residing in the city region. . (Allen J. Scott (ed.) (2001))

In studying human geography, urban and regional planning or the regional dynamics of business it is often worthwhile having closer regard to dominant travel patterns during the working day (to the extent that these can be estimated and recorded), than to the rather arbitrary boundaries assigned to administrative bodies such as councils, prefectures, or to localities defined merely to optimise postal services. Inevitably City Regions change their shapes over time and quite reasonably politicians seek to redraw administrative boundary maps from time-to-time to keep in-tune with perceived geographic reality. The extent of a city region is usually proportional to the intensity of activity in and around its central business district, but the spacing of competing centres of population can also be highly influential. It will be apprciated that a city region need not have a symmetrical shape, and that is especially true in coastal or lakeside situations (consider for instance Oslo, Southampton or Chicago).

edited from Allen J. Scott (ed.) (2001) "Global City-Regions: Trends, Theory Policy," Oxford: Oxford University Press.

CITY OF KUALA LUMPUR...PLANNING TOWARDS WORLD CLASS CITY

Kuala Lumpur’s vision to create a world class living and business environment coincides with the national goal on being competitive and knowledge-intensive. This entails a paradigm shift to the new economy where more knowledge intensive industries are encouraged to locate and concentrate in Kuala Lumpur. This thrust is expected to permeate throughout the urban economy, creating more wealth for the people and business community, it shall leading to higher living standards, and a more conducive and creative working environment that will encourage active interactions among skilled workers, technopreneurs, innovators, creative artistes and k-businesses.

This new urban economy in Kuala Lumpur shall be characterized by an abundance of skilled human resources. Wealth generated largely from the intense sharing of codified knowledge and information, and new knowledge gained from R&D and intellectual property, increased collaboration between firms and institutions, the extensive use of information and communications technologies (ICT) and the development of more effective learning mechanisms across the entire economy. Spatial growth in Kuala Lumpur over the past decade has been closely associated with the growth of its urban economic activities. The new emerging economies envisioned for Kuala Lumpur shall strengthen it’s central role as the Capital City of Malaysia and the nation’s largest employment centre, where principal concentrations of business, finance, retail, tourist and cultural activities for the entire nation are located. It is thus crucial for the Draft KL City Plan 2020 to develop an urban structure that will meet the demands of this new urban economy. The plan will identify how this economic growth and expansion will be accomodated in Kuala Lumpur’s spatial and development built form. The Plan must also acknowledge the role of Kuala Lumpur not only as the Capital City of Malaysia but also its function as an important national growth node and gateway towards developing a global economy.

The Draft KL City Plan 2020 has designated a premier business and financial zone in the City Centre, which is also identified as an international zone. This premier zone shall spearhead Kuala Lumpur into a global city and shall provide for quality housing, grade ‘A’ office buildings, international 5-star hotels and a quality built environment that is safe and attractive for international business and local communities to conduct business, work and live in Kuala Lumpur. The vision for Kuala Lumpur to be A World-Class City is encapsulated in this premier zone which is also a competitive zone in the city. It gives the city an edge in attracting new investments and in expanding existing investments. The premier zone shall have two main areas, i.e., the financial precinct and the business precinct.

FINANCIAL PRECINCT

The financial precinct will provide for corporate international and national headquarters, agencies and embassy functions which are becoming increasingly important because of globalization. The presence of international financial and business activities in the city provides great opportunities for international and domestic organisations including financial intermediaries and institutions to enhance their networking partnerships, to create economies of scale in adopting innovative information technology and infrastructure and to attract skilled human resources who are fundamental to the continuous success of business. The thrust for ward therefore demands that Kuala Lumpur invests in its physical capital and assets (housing, environment, physical infrastructure, community facilities, roads, transportation), and also in its human capital. By doing this, it further enhances itself as an attractive location for knowledge intensive businesses.

This would also assist in fulfilling the objectives of Malaysia’s Capital Master Plan (CMP) and the Financial Sector Master Plan (FSMP). One strategic move is to make Malaysia a major international Islamic Financial hub which will further enhance Kuala Lumpur’s position internationally. The increasing liberalization of the financial industry, accompanied by the expansion of the range and types of financial services, would attract international banks, financial institutions and other trading and broking firms to set up their regional and international headquarters in Kuala Lumpur. The designated financial precinct shall provide the enabling environment for these entities.

BUSINESS PRECINCT

The business precinct is the immediate area outside of the fi nancial precinct within the area of Jalan Ampang-Jalan Tun Razak -KLCC-Bukit Bintang leading into Jalan Imbi; Jalan Tun Abdul Rahman- Chow Kit-Jalan Dang Wangi, Jalan Pudu-Jalan Petaling-Jalan Sultan -Jalan Hang Jebat. Here, all kinds of businesses are attracted by the spillover effects of Kuala Lumpur’s dynamic economic activities in the fi nancial precinct which will serve as the catalyst for the growth of other business and professional services. It is here that the City will be able to focus on building up a creative class because creativity is the winning factor to increase a city’s competitive edge. Creative and cultural activities are central to an advanced city’s identity and a key sector in world cities. Creative and cultural activities and business tend to be attracted to international zones because of their ambience and cosmopolitanism.

INTERNATIONAL ZONE

Kuala Lumpur acknowledges the expansion of its international community. Where traditionally, the international community in Kuala Lumpur is centred on and in areas where the foreign embassies are located. The City has become more cosmopolitan, with the rise of multinational and transnational firms setting up offices and headquarters in Kuala Lumpur. Many of the members of its international community are workers and permanent residents attracted into the country by the abundance of job opportunities, and by the offer of attractive terms under the ‘Malaysia My Second Home’ (MM2H) program.

Kuala Lumpur has designate four areas as International Zone and these areas include the City Centre, Bangsar -Damansara, Jalan Ampang - Jalan Tun Razak - Jalan U-Thant - Jalan Damai - Jalan Semarak, Titiwangsa and Bukit Jalil. These international enclaves do not merely serve as residential areas; they also function as key commercial areas, offering quality offices, entertainment, fine dining, shopping, and tourism based activities such as medical and educational tourism.

GLOBAL CITY IN THE GLOBAL FINANCIAL CRISIS

Globalization generally implies decentralization and denationalization. But in international financial markets, something quite different is happening. Although market activity is spreading to new corners of the world, a powerful process of centralization is reinforcing the traditional dominance of financial capitals, led by London and New York. Battered by the Asian economic crisis, Tokyo and Hong Kong could become leading financial centers again if they open up to the world and continue to let investors snap up Asian assets at bargain prices. Even after globalization, markets will still be based in cities, not computers.

The transformation of global capital markets into a new supranational order is continuing apace despite the current market crisis. Nationally based financial operations are shrinking and internationally oriented operations are taking their place. Globalization usually implies decentralization. But while the international network of financial centers is indeed expanding, a leaner system dominated by a handful of strategic cities is evolving. As financial operations disperse around the world, only a few cities will have the resources to be dominant. First among them are London and New York, with their enormous concentrations of resources and talent. These two will conduct the most critical and complex financial operations of the future. A secondary network of smaller economic capitals will be headed by Frankfurt, boosted by Europe's economic and monetary union. The ultimate status of battered Hong Kong and Tokyo remains murky as markets wait to see what will be left in the wake of the Asian crisis. Although Singapore and Sydney are strengthening their positions, it is difficult to imagine them replacing Tokyo's resources and Hong Kong's expertise.

The emerging financial system will sharply differ from earlier versions, which were strings of closed domestic markets with a few scattered global centers such as the offshore markets and Swiss international banking. Traditionally, each national center duplicated all financial functions for its own economy, and collaboration between national markets was crude and rare. Today, however, cooperation is on the rise. Leading financial services firms are now setting up operations across the globe while traditional national centers are becoming home to foreign firms with global operations. Leading cities like London and New York are executing complex operations for firms and governments from myriad countries, packaging capital in innovative ways while working with secondary cities through affiliates and direct exports of financial services. In contrast, other cities in the global network are playing "gateway" roles, such as monitoring capital flows or issuing bonds. One example is Argentina's $1 billion government bond in November, the largest emerging market bond since the market turmoil last August. Although the bond was issued in Argentina, its lead managers were J. P. Morgan and Germany's Deutsche Bank and most of its buyers were U.S. institutional investors.

What turns an ordinary city into a global financial center? Although many factors can boost a city's status, two elements stand out. The first is national consolidation, which favors cities with major institutional equity holdings. In the past, a nation's financial activity was often scattered among several major cities; today, most countries have one dominant national center of operations. Today, a city lacking a major stock exchange can participate in the global market if it has banks and investment houses holding significant amounts of equity. Second, new financial capitals have appeared in emerging markets that have taken the plunge into market liberalization -- a trend that will continue despite the current financial turmoil.

DID MALAYSIA IMPROVES RANKING ON THE EASE OF DOING BUSINESS BY ENCHANCING IN EFFICIENCY URBAN GOVERNANCE?

Malaysia improved four ranks to 20th in the World Bank’s Ease of Doing Business Survey 2009, from 24th in 2008 and 25th in 2007. Malaysia has improved in its ranking throughout the 3 years, considering that the total number of countries being ranked has increased to 181 in 2009 from 178 in 2008 and 175 in 2007. Tan Sri Mohd Sidek Hassan, Chief Secretary to the Government and the Co-Chairman of PEMUDAH, the country’s special task force to improve Malaysia’s business competitiveness, said that he was encouraged by Malaysia’s improved ranking in this survey. But stressed that there was much more work to be done if Malaysia is to move into the top 10 in the near future.

PEMUDAH was set up on 7 February 2007, in part as a response to the less than stellar ranking in this survey in the past years. Since its establishment 19 months ago PEMUDAH has succeeded in reducing, if not totally removing, various impediments in the business environment. It worked with the public sector in a number of areas, and was able to among others:
· Reduce the time taken for clearance of exports undertaken to facilitate trade;
· Reduce the time taken for property registration through improvement of processes and enabling on line applications for property registration;
· Ease and refine tax matters;
· Reduce time and costs as well as increase the rate of recovery in closing a business in Malaysia; and
· facilitate e-payment;
· established one-stop centre to expedite incorporation of companies; and
· improve the processes for employing expatriates and skilled workers;

The World Bank’s Ease of Doing Business Survey 2009 is the sixth in a series of annual reports co-published by the World Bank and the International Financial Cooperation. The report investigates the regulations that enhance business activities and those that constrain them. Rankings on the ease of doing business do not tell the whole story about an economy's business environment. The rankings also do not account for all factors important for doing business for example, macroeconomic conditions, infrastructure, workforce skills or security. But improvement in an economy's ranking does indicate that its Government is creating a regulatory environment conducive to operating a business.

Regulations affecting ten areas of daily business are measured:

· Starting a business;
· Dealing with permits;
· Employing workers;
· Registering property;
· Getting credit;
· Protecting investors;
· Paying taxes;
· Trading across borders;
· Enforcing contracts; and
· Closing a business.

Malaysia improved its rankings in 4 of the 10 indicators, namely:

· Getting credit , to 1 in 2009 from 3 in 2008;
· Dealing with construction permits, to 104 in 2009 from 105 in 2008;
· Paying taxes, to 21 in 2009 from 56 in 2008;
· Enforcing contracts, to 59 in 2009 from 63 in 2008.

Sidek reassured that PEMUDAH would continue with the agenda of improving the quality of service at all levels, especially that of local government. PEMUDAH will continue to promote a conducive environment for doing business in the country through the following measures:

· streamlining and speeding up Government Agencies and Departments’ processes;
· encouraging on-line applications;
· enhancing transparency and accountability of the Public Sector; and
· continuous monitoring of initiatives already undertaken.

MALAYSIA-TOWARDS GLOBAL COMPETITIVENESS’ THIRD INDUSTRIAL MASTER PLAN (IMP3 2006-2020)

MUSLIM WORLD, GOVERNANCE AND GLOBAL COMPETITIVENESS

The Muslim world is rich in human capital as well as physical resources and has immense potential for growth, progress and prosperity. We constitute one-fifth of humanity and our people are intelligent, industrious and enterprising. Nature has blessed us with vast natural resources which include 70% of the world's hydrocarbon reserves. The Muslim world is spread over a vast geographical expanse extending from Morocco to Indonesia and has a rich diversity of races, languages, cultures and people. Counter-pointing the richness and diversity of our resource base is an economic performance which is not commensurate with our true potential. There is no doubt that some of the Muslim countries have made impressive progress. However, a vast majority of Muslims live in poverty and backwardness. Nearly 39% of the world's Muslim population lives below the poverty line. We make up 19% of the world's population but only 6% of its income. Our share in global trade is barely 7 - 8%, while only 13% of our total trade is amongst us. No Muslim nation is among the group of developed industrialized countries.

Instead of breaking into a litany of noble intents and declarations, which is a customary way of starting such a speech, we have deliberately chosen to go straight to facts and figures which bring into sharp relief the true dilemmas and challenges facing us. Our sole objective here is to set in motion a train of thought that helps us identify the root-causes of our malaise. We in the Muslim world need to look inwards, get into a mode of self-analysis, identify our strengths and weaknesses and chart a clear and well-defined course of action. First of all, we should be very clear about the kind of world that we live in today. The world of today is radically and profoundly different from the world of yesterday. We are living in an age of globalisation where no nation can afford to live in isolation. We have, therefore, to begin our quest for economic revival by identifying the challenges and opportunities that the current global environment presents.

The new world order is characterized by economic integration, technological advancement, predominance of knowledge economy, and diffusion of democratic ideas. Broadly speaking, this process has brought about three fundamental changes. Firstly, a new governance paradigm is emerging whereby the private sector is leading the process of economic growth and governments are assuming the role of policy-maker, facilitator, regulator and enabler. Secondly, supra- national institutions are laying the rules of the game and nation-states. are called upon to operate within that framework. Lastly, and perhaps most importantly, buoyant expansion of global trade and capital flows as well as freer exchange of ideas and technology across the world provide vast opportunities for growth but at the same time pose serious challenges in terms of achieving better governance, higher efficiency and greater competitiveness.

This is the kind of global environment in which we in the Muslim world have to position ourselves in our pursuit of economic resurgence. The sooner we adjust to the ground realities of the new global order, the brighter our prospects of success would be. The way forward in this highly competitive and inter-dependent world is through improved governance and reform within individual Muslim states on the one hand and by exploring new avenues of mutual cooperation based on commonality of interest on the other. The second biggest challenge facing the Muslim world is on account of insecurity emanating from disunity and dissentions within our own ranks. Such conflicts and disputes are not only sapping our energies and resources but also undermining our prospects of meaningful cooperation. Within Muslim countries, vertical divisions by way of social inequities are nursing a sense of deprivation, while horizontal cleavages along ethnic, tribal and linguistic lines are a source of unrest. There is a need for unity within and amongst ourselves in order to move forward and harness our economic potential.

The growing divide between the Muslim world and the West, wrongly projected by some as a clash of civilizations, is another important challenge facing us. Public opinion in the western world is gripped by misperceptions about our faith. Meanwhile, Muslims in Iraq, Afghanistan, Palestine, Lebanon and Kashmir continue to face insecurity, death and destruction. Such is the nature and magnitude of the challenges facing the Muslim world in recent times. The most important response required of us at this critical juncture is to project the true spirit of the Islamic faith and to remove the cobwebs of prejudice and misperceptions which hang around it. Islam as a way of life enshrines the values of moderation, tolerance, justice and interfaith harmony.

In conclusion, the Muslim world is faced with serious and multiple challenges. A lot of progress has been made in many areas but a lot more needs to be done. It requires clarity of thought, will to change, and determined and concerted action by all of us individually and collectively. It is a difficult and arduous journey. It is a constant and unrelenting struggle. The Muslim world, with its rich resources, vibrant energies and unflagging determination, will overcome these challenges and open new avenues of progress and prosperity not only for Muslims but for entire humanity. Islam promises universal peace, progress and prosperity and so should our endeavours aim at and contribute to make a better world for all mankind.

THE ROLES OF URBAN GOVERNANCE IN CORRIDOR ECONOMIC REGIONS DEVELOPMENT OF MALAYSIA

In line with Malaysia’s vision of becoming a developed nation by the year 2020, the time has come for us to accelerate the regional development plans that have been put in place. The most important objective of regional development is to achieve a balanced, focused regional growth by spreading economic development to embrace all states and regions. In 2007, we have witnessed the birth of 3 corridor development master plans in Peninsular Malaysia i.e Iskandar Development Region (IRDA), Northern Corridor Economic Region (NCER) and East Corridor Economic Region (ECER). The master plans are long term plans and are aimed to unleashed the economic potential of the corridors and enhances the people's quality of life and their income level.This was partly the resultant of the identification of growth conurbations in the National Physical Plan and the call for a more balanced development growth in the country. All three corridors of the Peninsular Malaysia will bring about great change to development and allocation of funds and budget is based on these master plans projects.

This is especially true for the Corridor Economic Regions where tremendous opportunities await. The states of Malaysia are endowed with a wealth of natural resources. Thus far, the nation has benefited tremendously from the optimal use of the oil and gas resources which the region is blessed with. However, the region’s other natural assets have gone relatively untapped. With its beautiful islands, pristine beaches, and unique culture and heritage, the tourism potential in this region remains enormous. Strategically located in Malaysia, facing towards the East Asian countries, the region has an excellent prospect to become the Eastern Gateway to serve the vast Far East markets in terms of trade, resource-based manufacturing, logistics and services.

Agriculture, the mainstay of the region’s economy, is gradually taking on a new face thanks to commercialisation and integration, while human capital development is gradually taking centre stage with the establishment of new tertiary institutions.Hence, the formation of the Corridor Economic Regions Development Council to spearhead the implementation of the plan in the region is a positive move which will fast track the socio-economic development for the states of Malaysia. While the Government will spearhead major infrastructural initiatives in this region, the private sector must play its role to drive the investment in this region, and at the same time cultivate smaller businesses and entrepreneurs.

Potential investors can look forward to an attractive package of incentives, tailor-made especially for this region, with the aim of transforming the Corridor Economic Regions into a cost-competitive and vibrant business hub, poised for future growth. The Government, on its part will ensure that the physical infrastructure will be in place to provide a sound foundation for future growth. The new and enhanced land, sea and air transportation projects as outlined in the Corridor Economic Regions Master Plan will significantly improve the connectivity and linkages between the region and the Kuala Lumpur Conurbation and other demand centres locally and internationally.With the full commitment of both the public and private sectors, the Government is confident that we can all work together to realise the vision of Corridor Economic Regions to become a developed region by the year 2020.

The urban governance plays a leading role in setting the direction, policies and strategies in relation to the Region’s development. It also plays the coordinating role between Government entities in the promotion of trade, investment, tourism and development activities in the Corridor Economic Regions . Among others, the Council acts on behalf of the Government agencies within the Corridor Economic Regions to receive, process and expedite approvals for trade, investment and development in the Corridor Economic Regions . The Council also promotes and stimulates economic and social development in the Region, as well as private sector investment. The urban governance also establishes policies, direction, strategies and initiatives in relation to sustainable development, including environmental protection, management and conservation in the Corridor Economic Regions .

Function of Urban Governance

· Sets direction, policies and strategies in relation to the Corridor Economic Regions 's development

· Coordinates role between Government entities in the promotion of trade, investment, tourism and development activities

· Acts on behalf of Government agencies with the Corridor Economic Regions to receive, process and expedite approvals for trade, investment and development in the Corridor Economic Regions

· Promotes and stimulates economic, social development and private sector investments in the Region

Establishes policies, direction, strategies and initiatives for sustainable development. An Implementation and Coordination Committee (ICC) for each of the state of Malaysia will be established by the Corridor Economic Regions. Among others, the ICCs will identify major or strategic development and investment in the Corridor Economic Regions with regard to their respective states, monitor the status of all related applications and coordinate the roles and activities of relevant government entities to expedite the implementation of such identified major or strategic development and investment in the Corridor Economic Regions .

ENHANCING URBAN GOVERNANCE EFFICIENCY IN MANAGING GLOBAL FINANCIAL CRISIS

The world bank estimated that there were 45 serious financial crises that erupted throughout the world in the 1980's, but this had increased by almost one and a half times to 65 crises recorded in the 1990's. Furthermore, due to the effects of contagion, a financial crisis in one remote part of the world will probably affect our nation more than it did before. As such, besides taking action on the domestic front, we must continue to press for reforms of the international financial architecture, even though it may no longer be fashionable to do so.

Geo-political developments will also affect the global economy in a more pronounced fashion in the future. Since the end of the cold war, and now with the impetus of the new war on terror, we have begun to witness the unilateral designs of one superpower to dominate the world. The war in Iraq and the harsh polemic directed towards Syria and Iran are instances of this. When you add the other skirmishes taking place in the world - such as the flare up in Aceh and the Palestinian-Israeli conflict - then you have a world full of potential flashpoints that could cause much uncertainty and disruption to the global economy. Natural disasters and other unexpected shocks can also wreak havoc on the economy. The recent phenomenon of Severe Acute Respiratory Syndrome (S.A.R.S.) Affected Asian economies more starkly than the war in Iraq. Planes were grounded and hotel bookings were cancelled, as the fear of S.A.R.S. brought travel and tourism almost to a halt. Thankfully, this virus seems to have been brought under control, but we must be alert to any possible relapse and be ready to deal with any eventuality.

A key aspect of competitiveness relates to the efficiency and effectiveness of the public service delivery system and urban governance. In fact, in the first meeting of the cabinet committee on national competitiveness (of which I am the chairman), this delivery system was identified for further enhancement in our quest to improve national competitiveness. True, the private sector acts as the engine of growth, but this engine cannot run in a vacuum. The speed, efficiency and effectiveness with which the public sector serves the private sector determines the speed, efficiency and effectiveness of our corporations. Besides enhancing our competitiveness, we must improve our urban governance and public service delivery system simply because our citizens demand it. As the nation develops, and as our citizens become more affluent and sophisticated, more and more will be required of the government and civil service. I remember when we had to be absent from the office a good part of a day just to get our driver's license renewed. Now, not only does it take a mere five minutes, we need not go to the road transport department anymore; we can renew it even at the post office.

Furthermore, a conducive business environment is dependent not only on the relevant rules and regulations, but also on the services provided by the public sector. As taxpayers, individual citizens are also constantly looking for high quality services. In this case, how can the government respond to calls for an enhanced public service delivery system?. By no means an exhaustive list, I would like to offer five guiding principles for civil servants to consider in raising their overall efficiency and effectiveness. Corruption itself is symptomatic of a flaw in the delivery system. We must realise that people fall into the trap of corruption when customers seek to circumvent a complicated and cumbersome delivery system. If agencies make their delivery systems transparent and user-friendly, cut the red tape, add checks and balances to the system, and severely punish those who betray the public trust, then we would have already won half the battle against corruption.

Furthermore, the government has chartered new strategies to enhance the nation's resilience and competitiveness. These strategies include a focus on developing the services sector (including financial services, tourism, education, health and others), our foray into new areas such bio-technology, and intense efforts to further diversify our exports and to seek new markets for our goods and services.

GLOBAL FINANCIAL CRISIS AND MALAYSIA COMPETITIVENESS MARKET

The world economy and the financial markets are facing numerous challenges and uncertainties. The global economy has been affected by sharp increases in the price of oil, as well as commodity and food prices. The instability in the financial sector in the United States has affected not only its economy but the European economies as well. Although economic outlook in the Asian region, especially in India and China, remains favourable, inflationary pressures may, to some extent, affect their domestic demand. These global developments would also affect Malaysia.

Notwithstanding this, the Malaysian economy remains strong and resilient. A diversified economy and export market, as well as high international reserves, provides greater flexibility for the economy to face an increasingly challenging external environment. Malaysia’s capital market has achieved remarkable growth over the years and is currently among the largest in the region. Not only has the market grown substantially in size, new innovative product have been introduced on an ongoing basis to meet the demands of domestic and foreign investors.

The Malaysian economy continues to record sustained growth. Strong economic fundamentals, as well as increased domestic demand, have resulted in the gross domestic product (GDP) achieving a growth of 7.1% during the first quarter of this year, and 6.3% for the second quarter of 2008. GDP growth for the first half of this year was, therefore, 6.7%. Although the nation will be somewhat affected by global developments, the Government is confident that Malaysia’s economy will continue to remain stable with a GDP growth of 5.7% this year.

To further strengthen the Malaysian capital market and to facilitate domestic intermediaries, such as principal corporate advisors, to expand their international business, the Government proposes that tax exemption be given on fees received by domestic intermediaries, which successfully list foreign companies and foreign investment products in Bursa Malaysia. This measure will also enable domestic investors to acquire shares of foreign companies listed in the local exchange.

To improve the country’s resilience and competitiveness, it is important to instill a culture of excellence and high performance at all levels of the work force, both in the private and public sectors. Towards this end, the implementation of Key Performance Indicators was introduced in the civil service and under the GLC Transformation Programme, with emphasis on performance-based wages at all levels of the workforce.

21st October 2008 - 1st NAPREC CONFERENCE

Since 2002, INSPEN has been the Coordinator for funds in real estate research known as National Real Estate Research Coordinator (NAPREC). As a coordinator, INSPEN coordinates and manage the funds for research on real estate on behalf of the Government. Objectives of the NAPREC Grant.

• To promote research projects of high priority in real estate.

• To promote research that addresses the needs of Malaysian real estate industry.

• To encourage joint efforts among real estate research institutions.

• To foster R&D links between public and private sectors.

• To enhance the nation's global competitiveness trough internationalisation of real estate research.

NAPREC fund is for real estate research projects.

CITY REGION AS THE ENGINE OF THE GLOBAL ECONOMY

It has long been predicted that improvements in transportation and communications technologies, in terms of both cost and quality, will eventually undermine any need for urban concentration. With each round of technological change in this area, scholars and journalists keep telling us that large-scale urbanization is a thing of the past. But with each such round of development cities not only do not disappear, they become larger and more important. This is because although advances in modern transportation and communications technologies enable many forms of economic and social interaction to occur over ever-greater distances, in other cases they actually heighten the need for proximity. The key to understanding why this is true lies in the ways that different economic activities are interconnected in terms of what we might call their transactional or network relationships to each other and to the rest of the world.

In very schematic terms, two different kinds of productive activity are typically to be found in any advanced economic system, each of them corresponding to a fundamentally different type of network structure. On the one hand, certain kinds of production are highly routinized: they rely on forms of knowledge that are relatively well codified and on machines and work processes where repetition is the dominant pattern of action. In economic terms, this means that it is possible to plan this sort of activity with some degree of confidence and to carry it out at very large scales. The necessary materials and inputs used in production can thus often be acquired according to a given schedule, and they can be purchased in large volumes. This means, too, that these materials and inputs can be brought in cheaply over large distances, for the ability to plan and to purchase in large volumes means that their unit costs can be kept low. Under these circumstances, the linkages between functionally related firms are likely to have a rather limited impact on locational decisions, and firms will be relatively free to seek out locations quite distant from one another. In practice, and because production is routinized in this type of system, the chosen locations will often coincide with pools of cheap, unskilled labor, sometimes far from any major urban center.

On the other hand, we find economic sectors where quite different kinds of conditions hold. Vast areas of the contemporary economy involve activities where enormous uncertainty prevails, and where there are strong limits on producers' abilities to routinize or simplify their operations, especially in regard to their mutual interactions. In high-technology industry, for example, producers are frequently faced not only with rapid shifts in basic technologies themselves, but also with demands for their products that vary greatly from one customer to another and from one moment to the next. In high-level business and financial services, the changing project-oriented and client-oriented product means that firms must be organized so as to vary the mix of skills and resources that they bring to each particular job; further, the skills and resources themselves (especially human intellectual assets) are not widely available because they are quite specialized. In industries faced with markets that fluctuate because of constant design changes or fashion effects (more broadly, product differentiation processes), firms must be prepared to change and recombine equipment and labor and to monitor shifts in the market, often on a day-to-day basis.

References
1. J. Friedmann and G. Wolff (1982) "World city formation: an agenda for research and action," International Journal of Urban and Regional Research, 6, 309 - 344.

2. P. G. Hall (1966) The World Cities, London: Weidenfeld and Nicolson. D. Held (1991) "Democracy, the nation-state, and the global system," in D. Held (ed.) Political Theory Today, Stanford: Stanford University Press.

3. S. Sassen (1991) The Global City: New York, London, Tokyo, Princeton: Princeton University Press.

EFFICIENT URBAN GOVERNANCE + URBAN MARKETING + URBAN COMPETITIVENESS = WORLD CITY?

Singapore has been ranked 1st, Shanghai 5th, Beijing 8th and Hong Kong 10th in terms of governance according to Jones Lang LaSalle’s inaugural Urban Governance Survey. Other cities noted for their strong governance include Barcelona (2nd), Dubai (3rd), New York (4th), Budapest (6th), Brisbane (7th) and Auckland (9th). The survey, which is part of Jones Lang LaSalle’s World Winning Cities research programme evaluated 33 major cities around the world. Overall, the survey found that there is no single winning model of urban governance, with examples of good governance spread across the globe. Successful governance is not dependant on urban size, geographical spread or economic maturity, but rather on a high quality of urban management and strong marketing capacity.

The best performers in terms of urban marketing are those that are capable of building a shared “urban- vision” and are characterised by a consistent approach across all marketing agencies with a mandate to profile and brand the urban internationally. In this regard, New York came out tops for being active in all aspects of urban marketing from the use of financial incentives to urban regeneration initiatives. The urban is working to retain and enhance its global position through extensive planning efforts, communication campaigns and infrastructure developments. In Asia, the two major Chinese cities of Shanghai and Beijing are recognised for their strong marketing capabilities through international events. Shanghai recently held the successful Formula 1 and will be host to the 2007 Special Olympics and 2010 World Expo. Beijing played host to the 2004 ATP Tennis Tournament and the world will again focus on this capital urban in the rundown to the 2008 Olympics.

Efficient urban governance has a critical influence on an urban attractiveness to both investors and occupiers of real estate. Governance is however a difficult concept to define and quantify. Efficient urban governance can be defined as the process for making and implementing decisions. The Survey’s Urban Governance model measured seven aspects of governance – integrity, autonomy, stability, efficiency and effectiveness (that are grouped into a score for Urban Management), along with the efficiency and effectiveness of Urban Marketing programmes. For each of these indicators, a mix of quantifiable data and softer, qualitative information was collected. Singapore was most noted for its physical integrity and urban autonomy, together with Barcelona and Dubai. These three cities have a single administrative and political body whose geographical area of responsibility broadly matches the geography or urban economy.

Interestingly, Singapore and Dubai are “urban states” and are characterised by their prominent regional position and cultural diversity. Furthermore, they have strong urban autonomy too given their high cap urban to allocate financial resources according to their spending priorities, as well as raising resources to fulfill the same priorities without depending on central government transfers. In both Singapore and Dubai, over 50% of local public sector expenditure is raised by local public sector revenue sources. The Australasian cities of Sydney, Brisbane and Auckland have shown high financial stability over the past five years and together with London and Paris, have performed well from the financial stability aspect.

A urban is “efficient” when it is capable of providing outputs such as financial management, service delivery or infrastructure investment, in the best way given the resources available. Outputs can be delivered through local and central government structures, Public-Private Partnerships and non-profit organisations. The efficiency of the mixed model (public/private) is very much aligned with the idea that good governance is a result of the concerted action of a network of players. Cities covered in the survey still largely support their budget position through public funds, with the exception of Hong Kong, which displayed a high level of efficiency with its mix of fixed investments strongly biased towards the private sector (about 25% public and 75% private). While the level of private investment is somewhat lower in the Chinese cities (Beijing, Guangzhou and Shanghai), they still score reasonably strongly on this criteria with an average of 50% public and 50% private resources.

Urban marketing programmes are another barometer of good governance. In many instances, cities have used major events to raise their profile in the international arena. In Asia, the two major Chinese cities of Shanghai and Beijing are recognised for their strong marketing capabilities through international events. Shanghai recently held the successful Formula 1 and will be host to the 2007 Special Olympics and 2010 World Expo. Beijing played host to the 2004 ATP Tennis Tournament and the world will again focus on this capital city in the rundown to the 2008 Olympics, Of notable mention is Barcelona which used the 1992 Olympic Games as a catalyst to renovate the urban. After the Games, it has maintained and reinforced its image through a marketing strategy that “sells” the urban as the leisure and cultural center of Europe. Using buildings to market cities is another tactic used in urban marketing programmes. Dubai epitomizes the use of the built environment as a catalyst for investment. It has built a major harbour, Jebel Ali which has become the cargo hub of the Gulf region used increasingly for trading with China by over 2,500 companies located in the tax free zone.

It has also become a leading world tourist destination in part due to the “iconic” value attached to the Burj-Al Arab Hotel. In New York, the physical regeneration of the World Trade Centre area symbolises the re-birth of the urban. Landmark developments like the Opera House in Sydney and the Petronas Twin Towers in Kuala Lumpur also serve to raise the international profile of these cities.

source : BusinessWeek, April 2008 and Jones Lang LaSalle's Annual Report 2007.