Kedah: one state, three economies — rice, chips and the legacy of Old Kedah

In 2024, electrical, electronic and optical products made up 51.1 percent of the value added in Kedah’s manufacturing sector. Rice contributes part of the 10.6 percent of the state’s GDP that comes from agriculture.

The state known as the country’s rice bowl is, by its own economic accounting, a factory state.

Both facts are true at once — and understanding why is the best way to understand Kedah.

Key facts

Capital	Alor Setar
Head of state	Sultan of Kedah
Area	9,447 km²
Administrative districts	12, including Langkawi
Population	2.23 million (DOSM 2025 estimate)
GDP 2024	RM54.0 billion, growing 4.2 percent
Approved investment 2024	RM45.8 billion — fourth highest among states
Rice production 2022	834,901 metric tonnes — highest in Malaysia

Source: official portal of the Kedah State Government, DOSM and MIDA.

Economic structure: what actually drives GDP

DOSM’s media statement on Gross Domestic Product by State 2024 puts Kedah’s GDP at RM54.0 billion, growing 4.2 percent compared with 1.7 percent in 2023.

Its sectoral breakdown describes the state more accurately than any nickname:

Sector	Value (2024)	Share of GDP	Growth
Services	RM30.3 billion	56.1%	+3.8%
Manufacturing	RM16.1 billion	29.9%	+6.6%
Agriculture	RM5.7 billion	10.6%	+4.0%
Construction	RM1.4 billion	2.6%	−11.1%
Mining and quarrying	RM0.1 billion	0.2%	−3.0%

The second growth driver is manufacturing, which surged 6.6 percent after contracting 3.2 percent in 2023. Within that sector, electrical, electronic and optical products contributed 51.1 percent of value added and grew 6.5 percent.

In other words, more than half of Kedah’s factory output — measured by value — is electronics and semiconductors.

Why Kedah remains the rice bowl

The nickname measures something different: Kedah’s share of the nation’s rice supply, not rice’s share of Kedah’s economy.

According to DOSM’s crop dataset for reference year 2022:

	Kedah	Malaysia
Rice planted area	213,718 hectares	637,935 hectares
Rice production	834,901 metric tonnes	2,281,739 metric tonnes

That is about 36.6 percent of the nation’s rice production from a single state. The second and third producers — Kelantan (272,633 metric tonnes) and Perak (269,790 metric tonnes) — each come in at under a third of Kedah’s total.

The technical basis is water. The Muda Agricultural Development Authority (MADA), established under the Akta Lembaga Kemajuan Pertanian Muda 1972 (Akta 70), which came into force on 31 March 1972, manages three dams — Pedu, Muda and Ahning — that make two rice crops a year possible in the Muda Area.

Without that controlled irrigation, the Kedah plain could manage only one season a year. It is this institutional structure, not the land alone, that produces the nickname.

Kulim Hi-Tech Park: factories beside the paddy fields

In 1996, an industrial park began official operations in Kulim district, about an hour from the border with Penang.

The official Kulim Hi-Tech Park (KHTP) website describes it as Malaysia’s first fully integrated high-technology park, with the tagline Leading Global Science City.

Its figures and structure:

• Size: 4,736 acres
• Zones: six — industrial, urban, research and training, institutional, amenity, and residential
• Owner and manager: Kulim Technology Park Corporation Sdn Bhd (KTPC), a wholly owned subsidiary of the Kedah State Development Corporation (Perbadanan Kemajuan Negeri Kedah)
• Location: within the Northern Corridor Economic Region
• Focus: high-technology manufacturing, R&D and technology education activities

The most recent phase recorded on the official website is Industrial Zone Phase 4A, completed in 2023.

The effect shows up in investment data. MIDA reports Kedah attracted RM45.8 billion in approved investment in 2024 — the fourth highest after Selangor (RM101.1 billion), the Federal Territory of Kuala Lumpur (RM91.5 billion) and Johor (RM48.5 billion), and ahead of Penang (RM32.0 billion).

For a state that supplies about a third of the nation’s rice, that is not a position most people would expect. See also the overview of Malaysia’s manufacturing sector as a whole.

Old Kedah and the Bujang Valley

In Merbok district, at the foot of Gunung Jerai, lies a layer of history far older than any factory or paddy field.

The National Archives of Malaysia (Arkib Negara Malaysia) records 50 temple sites found in the Bujang Valley, estimated to have been built between the 4th and 12th centuries CE. Those named specifically include Candi Bukit Batu Pahat, believed to have been built around the 6th century, as well as Candi Pengkalan Bujang and Candi Pendiat.

Gunung Jerai served as a navigational landmark, and the area became an important stopover for traders between India and China.

The Bujang Valley Archaeological Museum (Muzium Arkeologi Lembah Bujang), under the Department of Museums Malaysia (Jabatan Muzium Malaysia), sits atop Bukit Batu Pahat in Merbok, about 23 km from Sungai Petani. It officially opened on 23 January 1980 and holds thousands of artefacts from the 3rd to the 12th centuries — ceramics, glass beads and other material showing the Bujang Valley as a centre of international trade.

The official Kedah State Government portal states that archaeological evidence from the Bujang Valley shows a Hindu-Buddhist kingdom ruling ancient Kedah as early as 110 CE.

This makes Kedah one of the earliest sites of civilisation in the region — comparable to the place Langkasuka holds in the early history of the Peninsula.

Royal institution and the state capital

Kedah’s head of state is the Sultan of Kedah. The official Kedah State Government portal states the current head of state is Kebawah Duli Yang Maha Mulia Al-Aminul Karim Sultan Sallehuddin Ibni Almarhum Sultan Badlishah, the 29th Sultan of Kedah, proclaimed on 12 September 2017. The official palace is Istana Anak Bukit, Alor Setar.

The same portal records that the Sultanate of Kedah began in 1136, when Raja Phra Ong Mahawangsa converted to Islam and took the title Sultan Mudzafar Shah. The state subsequently passed through periods under Srivijayan, Siamese and British influence before joining the Federation of Malaya in 1948.

Alor Setar itself was founded in 1735 by Sultan Muhammad Jiwa Sultan Zainal Adilin Mu’adzam Shah II, and is Malaysia’s oldest state capital according to the state local authority portal. It was declared Malaysia’s 9th city on 28 November 2003.

Twelve districts, not one face

Kedah is divided into 12 administrative districts. The state’s local authorities show just how different each area’s character is:

Type	Local authority
City	Majlis Bandaraya Alor Setar
Municipal	Sungai Petani, Kulim, Kubang Pasu, Langkawi (Bandaraya Pelancongan)
District	Baling, Pendang, Yan, Sik, Padang Terap, Bandar Baharu
Special	PBT Taman Perindustrian Hi-Tech Kulim

Notice three distinct blocs: administration and paddy fields in the north (Alor Setar, Kubang Pasu, Pendang, Yan), industry in the south (Sungai Petani, Kulim, Bandar Baharu), and island tourism in the west (Langkawi).

Langkawi is a case of its own. UNESCO lists the Langkawi UNESCO Global Geopark, which covers the archipelago’s 99 islands over an area of 92,000 hectares, featuring Cambrian rock formations more than 550 million years old. It is Malaysia’s first UNESCO geopark.

Population composition

DOSM’s estimate for 2025 puts Kedah’s population at 2,228.0 thousand, with the following breakdown (thousands):

Group	Number
Bumiputera Malay	1,711.3
Chinese	246.7
Indian	128.4
Other Bumiputera	4.9
Other citizens	25.9
Non-citizens	111.0

These figures are DOSM’s current estimates, not a census count. The Malaysia Census 2020 count is lower and is published separately by DOSM; refer to the official census publication for exact figures.

Common misconceptions

“Kedah is an agricultural state, so its economy is small and backward.” Agriculture contributed 10.6 percent of the state’s GDP in 2024. Manufacturing contributed almost three times that amount, and the state attracted the fourth-highest approved investment in Malaysia in the same year.

“Kulim Hi-Tech Park is part of Penang.” KHTP is located in Kulim district, Kedah, and is owned by a wholly owned subsidiary of the Kedah State Development Corporation. It neighbours Penang’s electronics cluster but is a Kedah project under Kedah administration.

“Langkawi is a separate state.” Langkawi is one of the 12 districts of the State of Kedah.

“The Bujang Valley is a single temple site.” The National Archives records 50 temple sites across the area, not one single structure.

“All of Malaysia’s rice comes from Kedah.” About 36.6 percent, according to 2022 DOSM data. Kelantan, Perak, Perlis, Selangor and Sarawak also contribute meaningful amounts.

What’s next

• DOSM’s publicly available crop dataset still ends at reference year 2022 — Kedah’s rice figures for more recent years should be rechecked once DOSM updates that catalogue.
• DOSM’s GDP by state statement is published each mid-year; the 2025 figures will show whether that 6.6 percent manufacturing momentum holds.
• For national context, see the overview of Malaysia’s GDP and the tourism sector, which covers Langkawi.
• This article deliberately does not name the state’s political officeholders. For a current list, refer to the official Kedah State Government portal.