ABSTRACT
Singapore stands as a model of achievement and economic transformation. Malaysia has also accomplished a great deal. While a number of factors may account for their different rates of economic growth, a significant contributor to their differing outcomes is the manner in which they carried out their economic policies, not their substance, and their ability, or failure, to build the institutions associated with those policies. Singapore is highly dependent on foreign direct investment (FDI), not just in manufacturing, but throughout its economy. Malaysia's natural resources allow its economy to be more diversified, but its manufacturing sector tends to be Multinational corporation (MNC) dominated. The Penang government followed the Report's methodology and, recognizing Penang's relatively well-educated workforce and historical dependence upon international commerce, seized upon the federal government's then recent legislation to allow free trade zones and a market opportunity in the electronics sector caused by rising wages elsewhere in the region to attract investment to Penang.
