We need to look at Singapore and Malaysia, especially Johor, as a unit, so that investors looking at this region can look at the two as one place to invest in, where regulations are streamlined, and movement of goods and people are smoother, says the High Commissioner of Malaysia to Singapore, Dr Azfar Mohamad Mustafar.
Azfar was speaking at the Singapore Business Federation (SBF)’s Johor-Singapore SEZ (JS-SEZ) Joint Investor Forum on July 11, a day after the same edition of the investor forum was held in Kuala Lumpur. The two conferences took place exactly six months after the signing of a memorandum of understanding (MOU) between Singapore and Malaysia to establish the JS-SEZ.
The event in Singapore saw the attendance of over 200 business people, government officials and investors alike. Three keynote speeches were given by SBF chairman Lim Ming Yan, the deputy secretary (Trade) of the Ministry of Trade & Industry Jane Lim, and Azfar. Recommendations from the JS-SEZ working group were presented, followed by two panel discussions which saw participation from the Malaysian Investment Development Authority (MIDA), Singapore Manufacturing Federation, United Overseas Bank U11 and CapitaLand Development, among others.
“Collaboration between Singapore and Malaysia is really a no-brainer”, Azfar continues. The High Commissioner says that the Covid-19 pandemic accelerated the need for both states to pick up from projects that were started a decade ago.
“When we embarked on economic collaboration, Malaysia established the Iskandar Economic Zone in Johor. Following that, we had iconic projects like the Rapid Transit System (RTS) that were supposed to take off in 2014. But, due to ‘political developments’ in Malaysia, some of these projects are being delayed,” Azfar says.
To his point, CEO of SBF Kok Ping Soon said that companies might experience a “deja vu” moment with the progress of the JS-SEZ. Drawing attention to the similarities between the JS-SEZ and the Iskandar Economic Zone, Kok says: “There’s a suspension of disbelief happening… haven’t we been here before? What is so special this time round? How will it be different?”
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To Vinothan Tulisinathzan, director of MIDA, Singapore, one key factor that will ensure the success of the JS-SEZ this time round is that Iskandar is already an area that has strong infrastructure and ongoing development. “We’re not starting from scratch, coupled with tax incentives, that will really attract businesses and investors to be based [in the SEZ],” he adds.
And, with global geopolitical ambiguity, the JS-SEZ is posed to be a neutral zone for the global supply chain, Tulisinathzan notes.
The JS-SEZ Joint Investor Forum also saw the presentation of a report by the SBF, which surveyed 160 Singaporean businesses about the potential of the economic zone. Most businesses, or about 60% of them, cited concerns around sourcing technical and skilled workers in Johor, and attracting Singaporean talent to work across the border.
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Almost 40% of the 160 businesses expressed hope for better connectivity in terms of a special immigration lane for people to facilitate smoother travel.
Then, 55% of businesses engaged cited difficulties in handling tax issues, and 48% of businesses indicated that more expedient cargo clearance would be crucial to enabling the efficient flow of goods.
Some members of the audience also highlighted concerns around differences in certifications, and different tax systems, which may be a hindrance to doing business across the border. One cited the example of having two different certifications from two different religious councils for food that can be considered Halal. “They don’t recognise each other’s certificates,” says the audience member.
Ahead of the Malaysia-Singapore Leaders’ Retreat in September, Malaysia’s Economy Minister Rafizi Ramli said that the JS-SEZ agreement is on track to be signed. Till then, investor excitement will keep piling on.
