History
In 1969, George Town's free port status was revoked by the federal government.[5][6] In the state election that year, opposition party Gerakan, led by Lim Chong Eu, succeeded in seizing power from the Alliance, due to public discontent with the loss of George Town's free port status, worsening unemployment and brain drain.[4]
While the Alliance retained federal power following the concurrent general election, subsequent sectarian violence in Kuala Lumpur led newly appointed Chief Minister Lim to conclude that Penang's economic prospects as an opposition-ruled state would be compromised by ethnic strife and a federally-controlled bureaucracy. Penang's state and local governments faced legal constraints in reversing the economic decline, and it was felt that a statutory body, autonomous of federal control, would be more effective in facilitating economic development.[7][8]
On 17 November that year, the PDC was formed as a state economic development corporation under Lim's direction.[9] A state enactment was proposed with oversight from the National Operations Council.[8] In 1971, the PDC was incorporated with the passing of the Penang Development Corporation (PDC) Enactment by the Penang State Legislative Assembly. The enactment placed the PDC under the supervision of the federal Ministry of Economy and outlined its governance structure, which included a chairman, the State Secretary, the State Financial Officer, up to six additional appointees and three federal representatives appointed by the Minister of Finance.[10][11] During his tenure, Lim built up ties with Malaysian Prime Minister Abdul Razak Hussein, and sought improved relations between the PDC and federal agencies to facilitate ease of investments.[12]
Among the immediate priorities of the PDC was the urban regeneration of George Town, which, by 1969 was plagued by traffic congestion and overcrowding.[8][9] Four Comprehensive Development Areas (CDAs) were designated: Chow Thye and Kedah roads, Macallum Street Ghaut and a proposed "Penang New Urban Centre" – which has since been renamed Komtar.[9] The Central Area Planning Unit (CAPU) was formed, with the proposed urban centre identified as one of its key projects.[8][13]
Concurrently, Robert R. Nathan Associates was commissioned to develop a master plan aimed at reversing Penang's economic decline. The resulting Nathan Report of 1970 advocated an export-led growth strategy, increased integration with the global economy and a shift in development focus toward manufacturing. This report became a foundation for Penang's subsequent economic transformation.[4][9][14] As Penang's "principal development agency", the PDC was entrusted with broad autonomy in development, including the establishment of free industrial zones (FIZs) at Bayan Lepas and Perai, the development of commercial and residential areas, tourism, and land reclamation.[8][14]
