BUSINESSES in Malaysia and Singapore are optimistic about the continuous development of the Johor-Singapore Special Economic Zone (JS-SEZ), but they are also looking out for signs of further commitments from both governments in making the zone a real success, instead of just another “property play” without meaningful economic integration.
During the panel session titled “A Wish List for JS-SEZ”, Singapore Business Federation CEO Kok Soon Ping said Singaporean companies are “cautiously optimistic” about the special economic zone. The optimism comes from the pronouncements made by the governments of Singapore and Malaysia.
However, he said businesses wish to see continuous and further commitments by both governments to drive the project. “Beyond the early announcements, businesses are looking at how it can actually go through political transitions.”
In Singapore, the People’s Action Party scored a major win in its May 3 general election and a new cabinet was unveiled by Prime Minister Lawrence Wong. The JS-SEZ project is driven by the Singaporean government at a very senior level, mainly Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong.
In Malaysia, Datuk Seri Rafizi Ramli recently resigned as the Economy Minister after he lost his post as deputy president in the Parti Keadilan Rakyat (PKR) party elections. All eyes are on how his as-yet-to-be-named successor will push the plan forward.
“As this project cuts across many different industries, the personal attention from the prime minister or someone very senior [in the government] will be very important,” Kok said.
(Four days after the event, on June 27, Finance Minister II Datuk Seri Amir Hamzah was given the responsibility of carrying out the duties and functions of the Minister of Economy with immediate effect.)
On top of commitment, he said, businesses hope to see continuation, especially in terms of policies, programmes and rules and regulations that have been put in place. “I think businesses are looking forward to them being streamlined. For things that have been announced, we hope that they will continue to stay so and not be changed.”
The third item on Kok’s wish list is infrastructure development as the Johor Bahru-Singapore Rapid Transit System is targeted to be completed and ready for passenger service by the end of 2026. It will serve 10,000 passengers per hour in each direction. However, is the infrastructure in Johor Bahru ready to receive the inbound and outbound crowds? Can it continue to develop fast enough to catch up with the increasing investment interest?
Kok’s biggest worry, however, is external factors, which are geopolitical tensions, including the ongoing trade war and the war in the Middle East. “There’s a war happening as we speak, which is really slowing down investment interest, not just in Johor and Singapore, but worldwide. Businesses are holding back thinking if they should invest now.”
The panel session was moderated by CEO of HSBC Singapore Wong Kee Joo.
Speed, standardisation and sustainability
Teoh Kok Lin, senior adviser of the Associated Chinese Chambers of Commerce and Industry of Malaysia, said the JS-SEZ has attracted tremendous interest from businesses and investors.
“In fact, when I was sitting down there just now, I got messages from someone in China asking if their venture capital and private equity firms can set up something in the JS-SEZ. The SMEs (small and medium enterprises) are paying a lot of attention to it as well.”
Teoh summarised what he wishes to see happening at JS-SEZ as “3S”, namely speed, standardisation and sustainability.
Speed, which means swift movement of people and goods between borders, is crucial for business success. Citing Pop Mart, a public-listed Chinese toy company, Teoh said the firm pushes out its plush toy monster elves products, Labubu, very quickly into the market.
“The business world is moving so fast these days, where Pop Mart can come out with a new product within weeks, with speed. And speed often involves deeper mobility, where, for instance, you can design your product in Singapore in the morning and ship it to Johor shortly for manufacturing and export them to the merchants,” he said.
Standardisation is another key concern, especially when it comes to specific certification.
For instance, banking facilities. “We have HSBC in Malaysia where businesses can access funding. But I’m thinking how can we have a proposal whereby funding can be done in Singapore and Malaysia [with the same standards]. Rather than thinking about Malaysia funding for Malaysian businesses, and Singapore for Singaporean ones, can it be combined?” Teoh said.
He added that JS-SEZ will also have to take into account sustainability-related issues, which is vital but sometimes neglected amid the ongoing geopolitical tension globally.
Establishment of industry clusters
Datuk Mohd Noorazam Osman, CEO of Iskandar Regional Development Authority, said IRDA is playing a bigger role in the JS-SEZ to help facilitate matters between both governments. A result is the formation of the Invest Malaysia Facilitation Centre – Johor, which has helped attract investments into the state.
IRDA is looking beyond just facilitating, he said, but also exploring how best it can work closely with the business community to understand what sort of customised policies are needed for the special economic zone.
Mohd Noorazam said it wants to see more industry clusters being set up in JS-SEZ, which is where the chambers of commerce of both countries can sit down for discussions. They can help find ways to establish an ecosystem for particular sectors or industries in the special economic zone.
“IRDA will play the role in understanding and to see how best we can actually fill in those gaps, in terms of infrastructure and tenders and other needs. We have set up working groups that look into talent and the ease of movements of goods and people, as well as economic activities. All inputs [by stakeholders] are brought in for discussions. We should look into how best we can come out with customised policies for a specific industrial plan,” he said.
IRDA has approached all ministries through their respective chief secretaries for various types of approvals and how some policies can be introduced to suit the needs of the special economic zone, he added.
At the end of the session, Kok added that the JS-SEZ has seen very high commitments made by the Singaporean and Malaysian governments at the highest level so far, which is an encouraging sign.
“I’ve really never seen both government agencies working so closely together on a project. There have been bi-weekly meetings where Singaporean agencies would look at a list of projects and approach Malaysian agencies for discussions. All these while engaging investors and addressing all their questions. It’s compelling. There’s commitment and there’s collaboration,” he said.
Teoh added that businesses and investors should seize the opportunities offered by the JS-SEZ. “The key is how well you can seize the opportunities? I think the time is now. I know some people are still considering. But my call to all is that everyone should come to Johor and take a look at it yourself. Talk to the people on the ground, then you can really appreciate what’s happening.”
