JOHOR BAHRU, Nov 21 — The special financial zone (SFZ) status of Forest City can put Malaysia on the world map, especially in the financial and international banking sector.
Universiti Teknologi Malaysia (UTM) Faculty of Management Accounting and Finance Department associate professor Mohd Effandi Yusoff said the SFZ is able to grow and create a financial ecosystem that complements and balances the one in neighbouring Singapore, instead of competing with it.
“We can use the development model in Shenzhen and Hong Kong as a reference. The complementary cooperation will create a ‘dual core engine’ in the Southeast Asian region,” he said in a statement today.
He said it indirectly has a positive impact on economic development through the spillover of benefits received by government agencies, industry players and the community.
According to him, the federal government’s decision to make Forest City an SFZ is the right step in making use of the existing ecosystem in the area, thus becoming a catalyst for Johor’s development progress through to 2030. Although the effort to create SFZ may take between five to 10 years to mature, it can be a catalyst for Johor to reach its true economic potential and emerge as an economic power in Asia.
“The basic infrastructure in Forest City is already there. So, the best step is to ensure that the project can be successful to give a win-win effect to all parties involved,” he said, adding that it would complement the Iskandar Malaysia corridor initiative in the south of the country, thereby realising the government’s desire to make it the most successful corridor in the country.
Mohd Effandi explained that in order to make the SFZ a success, the federal and state governments need to work with the private sector to attract more international investors to invest in the Forest City SFZ area.
“This goal can also be achieved with relevant policies that have been implemented by the government before such as the implementation of lower taxes, and a more flexible and user-friendly visa visa release system.
“That step can be made through the introduction of appropriate incentives or the implementation of progressive taxes that give more remuneration to international companies entering the local market,” he added.
He noted that the development of the area also complies with the criteria of Environmental, Social and Governance (ESG) which will indirectly attract industry players who have a parallel mission and vision in terms of environmental protection from all over the world to come to Forest City.
On Aug 25, Prime Minister Datuk Seri Anwar Ibrahim announced the formation of a special financial zone in Forest City as well as several incentives to boost economic activities in Johor and the surrounding areas.