By The Straits Times | Created at 2025-01-07 14:37:36 | Updated at 2025-01-12 11:04:10
4 days ago
KUALA LUMPUR – The Johor-Singapore Special Economic Zone (JS-SEZ) is set to create more jobs and business opportunities while driving the growth of small- and medium-sized enterprises (SMEs), analysts and business groups say.
They say the JS-SEZ’s success largely depends on whether projects will be implemented in a timely manner to attract investments and boost investor confidence, as well as cross-border economic connectivity between the two countries.
The integrated zone for business and investment aims to support the expansion of 50 projects in the first five years, and 100 projects in 10 years.
Singapore Prime Minister Lawrence Wong and Malaysian Prime Minister Anwar Ibrahim on Jan 7 witnessed the exchange of the much-awaited agreement on the new special economic zone at the 11th Malaysia-Singapore Leaders’ Retreat in Putrajaya, Malaysia.
“It’s not just about Singapore businesses going to Johor, but it’s about both sides working together to attract new investment projects globally,” Datuk Seri Anwar said at the joint press conference in Putrajaya with PM Wong on Jan 7, at the end of the two-day retreat. The annual retreat is a platform for leaders of both countries to set the overall direction for bilateral cooperation.
The new zone, which aims to ease the movement of people and goods across the Singapore-Johor border, will occupy 3,571 sq km of land across southern Johor’s east to west coast.
This area about four times the size of Singapore will comprise the Johor Bahru city centre, Iskandar Puteri, Forest City, Pengerang Integrated Petroleum Complex, Tanjung Pelepas-Tanjung Bin, Pasir Gudang, Senai-Skudai, Sedenak, and Desaru.
To foster investor confidence, the Singapore and Malaysian governments must ensure that projects in the JS-SEZ are implemented in a timely fashion, said Mr Lee Heng Guie, executive director of Malaysia’s Socio-Economic Research Centre think-tank.
“These projects must be realistic and achievable within a clear timeline, with strong commitment from both governments. Time is of the essence for investors, and the timely completion of projects will enhance their confidence and build trust in the JS-SEZ,” he told The Straits Times.
Other promising possibilities for the zone include attracting high-tech industries, including digital and green technologies, said Sunway University economics professor Yeah Kim Leng.
“Consistent policies and government facilitation in terms of fast Customs clearance, connectivity and ease of transportation of goods and people will also determine the success of SEZ,” he told ST.
In a media briefing on Jan 3 ahead of the JS-SEZ signing, Malaysian Economy Minister Rafizi Ramli said the new zone is expected to create 20,000 skilled job opportunities for people on both sides of the Causeway.
But one expert questioned whether that target is realistic, as investments in the high-value, high-tech industries the zone hopes to attract tend to create fewer jobs due to automation, digitalisation and robotisation.
“Most of the jobs created will be in the construction sector, followed by management and maintenance of facilities of business operations, and not high-tech jobs,” said Dr Geoffrey Williams, founder and director of Kuala Lumpur-based Williams Business Consultancy.
The JS-SEZ has a higher chance of success than past projects such as Iskandar Malaysia – launched in 2006 and conceptualised as a southern economic growth corridor – given the involvement of the Singapore Government, which brings to the table better governance, he noted.
Some businesses and business groups from both countries expressed optimism about the new SEZ.
“SMEs in the Johor region will benefit from the enhanced business activities as Johor has a strong network of supporting industries that can supply components and materials to companies expanding (into the JS-SEZ),” said Johor South SME association’s founding president, Mr Teh Kee Sin.
Apart from business and job opportunities, Datuk Jeffrey Lai, president of the Johor Bahru Chinese Chamber of Commerce and Industry, said that Johoreans working for companies in the new SEZ will also benefit from upskilling.
Mr Vishal Vijay, chief executive of Singapore-headquarted global agri-commodity firm Agrocorp International, told ST that his firm will gain from a more efficient cross-border movement of people and goods, as well as incentives for capital spending, such as the purchase of equipment for business purposes.
In 2023, Agrocorp signed a joint-venture deal with Megmilk Snow Brand, one of the largest dairy companies in Japan, to set up a manufacturing facility in Johor Bahru.
The JS-SEZ will allow his company to complete this project in a quicker and more cost-efficient manner, he said.
“Fundamentally, we believe that Johor and Singapore have economies and natural advantages that are extremely complementary to one another, so we welcome the establishment of the JS-SEZ.”
Meanwhile, Equalbase, a Singapore investor and developer of sustainable warehouses and data centres, will team up with Malaysia’s Sunway Group to develop Equalbase Sunway 103°, a carbon-neutral logistics hub in Johor.
Mr Nicholas Bischoff, Equalbase’s chief executive, said the JS-SEZ will open up avenues for further expansion.
- Additional reporting by Chin Soo Fang
- Zunaira Saieed is Malaysia correspondent at The Straits Times covering the business beat with occasional forays into political coverage.
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