Johor-Singapore economic region proposal gains momentum amid unique relationship

The potential establishment of a Johor-Singapore economic region is generating excitement among residents and business owners in Malaysia’s southern state of Johor. The idea, which aims to strengthen the state’s economic potential, has been discussed by the state government, the federal government, and the Singaporean government, but has not yet been raised as an official proposal. Johor and Singapore have long enjoyed a close economic relationship, with many Malaysians travelling daily to work in the city-state, and Singaporeans frequently visiting Johor for leisure and shopping.

Johorean Halil Ismail, a 45-year-old technical supervisor who works in Singapore, believes the proposal should have started 15 to 20 years ago. “While the bonds of the cross-border economy have always existed and show promising opportunities for growth, there was no proper platform that took advantage of Johor’s unique relationship with Singapore,” he said.

Economy Minister Rafizi Ramli stated that the government is prepared to explore how Singapore views Johor as part of the economic zone and vice versa. The two territories share two land border crossings, the Johor Causeway and the Second Link crossing, which are considered the most frequently crossed borders globally, with over 300,000 daily crossings related to work, business transactions, family reunions, tourism, or shopping.

Johor is also a popular destination for Singaporeans, who often visit for weekend or day trips. In contrast, more than 300,000 Malaysians enter Singapore daily from Johor and contribute to the city-state’s workforce.

Halil also suggested that any bilateral committee formed must consider opportunities related to the job market, export and imports, goods movement, and foreign direct investment (FDI). Both sides need to see the benefits of any implementation for it to work, he said.

Johor-based businessman KK Ng welcomes the government’s initiative but would like to see a commitment from both sides. “It would be good to see what Singapore can offer as well and I believe the proposed Johor-Singapore economic region will be a focused joint effort similar to a shared economic and trade committee,” he said.

However, Johor Baru business owner CK Muhamad Asif questioned the timing of the Johor-Singapore economic region’s planned establishment when the Malaysian economy is not doing well. The 29-year-old convenience store operator believes that the government should first boost the domestic economy before setting up the economic region.

For Johor South small and medium-sized enterprise (SME) adviser Teh Kee Sin, the proposal for a Johor-Singapore economic region looks sound and interesting. However, he pointed out several issues, such as the need for the proposal to be government-to-government (G2G) driven. “We have to bear in mind that Singapore is a vibrant city-state and can attract investors on its own as these business-savvy people have trust in the Singapore government,” he said.

Teh doubts that there will be any Singapore investors, businesses, or SMEs keen to join the Johor-Singapore economic region without G2G involvement. “For them, any form of investment needs to be realistic, and they will tend to look at their returns on investments (ROI) as an indicator. So, end of the day, a strong G2G effort is needed for the proposal to start off on good footing,” he said.

He also brought up the issue of South Johor’s once ambitious Iskandar Malaysia project, which is related to the proposed economic zone but is a wholly federal and state government initiative. “Iskandar Malaysia started in 2007, and it has been more than 15 years since it has been around. However, to date, its development has been slow,” he said.

Teh suggested that both the Malaysian and Singapore governments consider making use of Iskandar Malaysia to encourage and attract mid-range technology companies to invest. He also proposed that the government offer various land concessions to these technology companies or other industries under a G2G overwatch. “Such a strategy may work as we should look into the existing Iskandar Malaysia zone and make full use of it to realise its potential,” he said, adding that such a proposal needs a timeline for the Johor-Singapore economic zone to succeed.