The Costs and Benefits of Urban Development:The case of the Northern Corridor Economic Region Development in Penang

The progress of a country or region has often been measured by the amount of urban development in its area. Some of these countries, especially in the Asian region, have been experiencing fast growths of urban development projects in recent years and are reaping vast economic benefits from them. Spurred on by these economic successes, the South East Asian countries have been scrambling to carry out many massive development projects in their countries and are planning for many more. Average incomes of the people are increasing tremendously, fueled by the opening up of global markets for the cheaper products, labour and real estate in these developing countries. With the increase in income, and the release for the sale and private ownership of land, there is a great increase in the demand and prices of land and properties for housing, commercial space and industries. Vast lands and properties are being grabbed by the local rich as well as by foreigners, and large amounts of investment put in to develop these lands for urban purposes and for further profit. However, although a vast number of people reap much economic and other benefit from these projects, there are always large sectors of the people that do not enjoy the benefits.
On the other hand, development of land, if carried out hastily and in a disorderly and inconsiderate manner, is often accompanied by undesirable environmental and socio-economic impacts, that will create sufferings to the people and costs to the government, as well as depletion of resources for the future generation. Examples of such consequences of development include the eviction and dislocation of local residents from sites earmarked for development, loss of amenities, loss of cultural heritage, landslides, mudslides and flooding caused by the inconsiderate cutting of hills and trees for new development, the pollution of natural water systems, which are sometimes sources of water for human use, increase in traffic congestion, noise, air pollution and carbon emission, over-loading of existing utilities and infrastructures, and increase in the cost of living..
We are familiar with the driving forces, the key players, the actors, the non-players and reactors of such development activities However, there should also be an assessment of who are the gainers and who are the losers, and the amount of benefits and loss each of these enjoy or suffer, in monetary as well as non-monetary terms, in the short term as well as in the long term, as a result of these activities, in order to have a deeper understanding of this urban force.
This paper is a broad attempt to develop such an analysis, taking as a case study some of the projects that have been proposed in the development plan of the Northern Corridor Economic Region of Peninsular Malaysia, and to use this assessment as a tool for decision making in the planning and consideration of such development projects.

Mr. Tan Thean Siew
Consultant, Town Planning and Real Estate Management Penang
22 Medan Kolam Air, 11500 Penang/ Malaysia
Phone: +60124 092 183, e-mail:

Siew_The Costs and Benefits of Urban Development, Who Benefit, Who Pay - The Case of the Northern Corridor Economic Region Development in Penang.pdf1.68 MB