Negeri Sembilan – the “second frontline” state

While Selangor and Penang are deemed as the "frontliners” in the state election due to their status and prestige as economic powerhouses, Negeri Sembilan can well be considered as the "second frontliner”.

Although at 1.1 million, Negeri Sembilan’s population is only 15 per cent of Selangor’s, the former is, however, only slightly smaller than the latter, i.e., at 6,656 km2 of land compared to 7,951 km2 (Smart Selangor Action Plan to 2025/SSAP 2025).

The ethnic composition of the state comprises 56.6 per cent Malays (mainly of Minangkabau descent), 2 per cent other Bumiputeras (principally Orang Asal), 21.3 per cent Chinese, and 14 per cent Indians.

Despite the population disparity, Negeri Sembilan has only 20 seats less than Selangor in the state assembly, i.e., at 36.

The relative situation of Negeri Sembilan as an "emerging” economy is loosely analogous to the "flying geese” developmental theory or paradigm (in developmental economics as propounded by Kaname Akamatsu) whereby the former will eventually catch up with the economic standards of Selangor as the "lead goose” (as well the Federal Territory of Kuala Lumpur) in the hierarchy of the global value chain (GVC).

The Negeri Sembilan Structural Plan 2045 expresses the state government’s aim "to [position the state to be on par with] Kuala Lumpur, in terms of land use, services, infrastructures, utilities and amenities”.

The challenge and task for whoever forms the state government is to ensure the integration of the Negeri Sembilan economy with particular reference to the area known as the Malaysia Vision Valley (MVV) 2.0 into the Greater KL and Klang Valley conurbations and leveraging on the spillover effect, multiplier effect, etc. from the latter.

By extension, whoever forms the state government has to ensure continuous heightened/enhanced connectivity and linkages with the Greater KL and Klang Valley regions (allowing for ease of transportation, especially for public ridership) alongside ensuring balanced development and boosting the standards of living/quality of life whilst simultaneously providing for a cost of living that’s still comparably cheaper to its more developed counterparts, as alluded to.

This requires close strategic collaboration and coordination between Selangor and Negeri Sembilan, and not in terms of federal-state relations only.

In other words, "interactive” and "concatenative” (i.e., interlocking) growth which can only happen, ideally, when the states are governed by the same coalitions or joint-coalitions as is the case at present.

That is, the geographical clustering provides the location and setting for industrial and services clustering (as the case may be) which is analogous to the production networks on a regional scale – where specialisation and division of labour can be systematically arranged and at the same time the supply-chain shortened as part of the wider reconfiguration (including cost-efficiencies).

For example, we can employ the import-substitution industrialisation (ISI) and export-oriented industrialisation (EOI) strategies to the supply-chain in relation to the respective roles of Negeri Sembilan (mid-stream as in semi-processed inputs, for example) and Selangor (downstream as in final product or outputs). This helps companies to not only shorten the supply-chain but also save costs (including on unit labour costs where Negeri Sembilan would have a comparative advantage).

Or in addition, the ISI can also envision Negeri Sembilan as a manufacturing hub producing finished goods destined for the domestic market (including East Malaysia) via Selangor as the transportation and logistical hub (based in KLIA, Shah Alam, Port Klang, etc.). At the same time, there can be domestic transhipment arrangements (where import duties are, by default, non-applicable), i.e., "importing” goods from Negeri Sembilan into Selangor for final processing and labelling and "exported” by air, land and sea throughout the country.

These goods are meant to compete with imported goods (which are priced higher due to the exchange rate pass through/ERPT) and providing a cheaper alternative – that’d help to buffer the loss of purchasing power of Malaysian consumers.

Surplus goods can be re-exported to the wider region and beyond. These goods can also subsidise the domestic/local prices (at least in the long-run).

Negeri Sembilan can even be conceptualised to be "Shenzhen” – capitalising on the lower manufacturing costs in the state – with Selangor as "Hong Kong” on the back of its established financial services as well as research and development (R&D) sectors. This would allow for an integrated production (original design manufacturing/ODM and original equipment manufacturing/OEM) and services base (vertical and horizontal) and single economic corridor/zone with the MVV 2.0 as a pivotal hub.

The development of a high-tech and industrial park by Sime Darby Property Berhad in Nilai can be complementary to Greater Kuala Lumpur and the Klang Valley (where the competitive effect can be minimised).

This can be done by envisaging part of the high-tech manufacturing processes and operations shifted and allocated between Nilai (e.g., solid state drives/SDD hardware – manufacturing and assembly phase, including cutting and moulding – part of the OEM operations) and its counterparts in Greater Kuala Lumpur (such as Cyberjaya – e.g., artificial intelligence/AI-based SDD design phase) and Klang Valley (such as Petaling Jaya – e.g., HDD software – performance testing phase – pre- and post-production – part of the OEM operations).

This is the wider policy vision and context within which, ideally, the manifestos of respective parties should be understood and framed.

As there’s no equivalent regional economic corridors like the Northern Corridor Economic Region (NERC) and East Coast Economic Region (ECER) as such, the Negeri Sembilan state government can come up with their own development agenda that simulates and mirrors that of a regional corridor via proximity and synergy – by enhancing and further developing on the pre-existing Comprehensive Development Plan (CDP) for MVV 2.0 under the MVV Secretariat.

Moving forward, the state already has high digital connectivity – with 88.9 per cent Internet penetration rate (2020), 74.7 per cent computer usage (2020) and 95.3 per cent mobile phone usage (2020).

According to the Deputy Minister of Communications and Digital YB Teo Nie Ching (as of May 2023), 5G network in Negeri Sembilan has reached almost 53% coverage of populated areas (COPA) with 131 communication infrastructures completed by the telecommunications industry. She added that the Malaysian Communications and Multimedia Commission (MCMC) in collaboration with the telecommunications industry had identified and planned a total of 207 5G sites to be developed in the state this year. The target is that by the end 2023, it’s expected that the COPA should reach 80 per cent.

The state, therefore, has the necessary supporting infrastructure in place to propel it to the next stage of its development phase/stage.

In tandem, the state government – via the Negeri Sembilan Digital Economy Blueprint (2027) – is determined to capitalise the digital economy to be a key growth driver and catalyst of the state.

Indeed, the Pakatan Harapan (PH)-Barisan Nasional (BN) joint-manifesto under the tutelage of caretaker and incumbent Menteri Besar Datuk Seri Aminuddin Harun aims to make Negeri Sembilan a developed state within 10 years.

Aptly styled as Apsirasi Perpaduan, the PH-BN joint-manifesto comprises 10 strategic pillars and 70 initiatives.

Among the 10 strategic pillars are: