KUALA LUMPUR, Jan 12 — The Johor-Singapore Special Economic Zone (JS-SEZ) is an important component to expedite Malaysia’s economic reform efforts, said RHB Investment Bank Bhd.
Economy Minister Rafizi Ramli signed a memorandum of understanding (MoU) with Singapore’s Minister of Trade and Industry Gan Kim Yong in Johor Bahru yesterday to formalise the cooperation of both countries on the JS-SEZ.
RHB Investment said in a note today that the MoU enables the nation to attract and develop new sources of foreign direct investments.
“The initiatives to have a one-stop business centre to facilitate Singapore businesses setting up operations in Johor under the JS-SEZ may likely give rise to more office buildings and subsequently industrial facilities (which includes data centres),” it said.
RHB Investment said while a full-fledged agreement remains to be worked out, an update is expected to be announced during the two countries’ 11th Leaders Retreat later this year.
“The discussions will centre on enhancing cross-border flows and strengthening the business ecosystem within the JS-SEZ to support investments,” it said.
The investment bank said both sides are in a position to offer what the other lacks under the collaboration.
“Singapore has a vast bank of investment capital and access to technology, while Malaysia has ample supply of space, and human capital, with Johor also served by a well-developed infrastructure network.
“In time, we hope the Johor-Singapore nexus will evolve symbiotically, akin to Shenzhen-Hong Kong,” it noted.
RHB Investment said Johor saw RM25.4 billion worth of projects awarded to contractors in 2023, the second-largest after Selangor.
The Johor government has proposed for the Iskandar Region to be designated under the JS-SEZ and proximity to the borders of both countries would be a key consideration to determine the special economic zone’s location.
“However, other parts of Iskandar Malaysia such as Kulai’s Sedenak Tech Park, cannot be ruled out.
“The adoption of a passport-free QR code clearance system on both sides to facilitate more expeditious clearance of people at land checkpoints would spur the need for an integrated public transportation system in the JS-SEZ,” it said.
In the event the JS-SEZ is located in Kulai or near the border, RHB Investment said there may be a strong push for the construction of the Johor Bahru Light Rail Transit project, with an estimated value of RM20 billion.
This is as one of the proposed lines includes Kulai, aside from Iskandar Puteri and Tebrau Lines.
“There was also mention of facilitating renewable energy cooperation in the JS-SEZ.
“Assuming the focus is on solar energy, given the various related announcements in Johor, namely the RM1.4 billion Sultan Ibrahim Solar Park in Pengerang, contractors that have exposure in the engineering, procurement, construction and commissioning of solar plants could likely benefit from this particular initiative,” RHB Investment said.
— Bernama
