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Iskandar Development Region in Johor Malaysia
May 19, 2007
Coming up in this edition of Perspective, join me, Melanie Yip as I visit the Iskandar Development Region in Johor, Malaysia.
It’s billed as Malaysia’s “economic super corridor” and will cost some US$105 billion in investments over the next two decades.
The Iskandar Development Region or IDR is the latest economic project initiated by the Malaysian government.
When completed, the 2,217 square kilometre economic zone - which is almost three times the size of Singapore - will boast facilities that will include an education hub, a medical hub, a new Johor State Administrative Center, an international destination resort, and residential buildings.
To get a better understanding of the business prospects in the IDR which will focus on manufacturing and services, a delegation of some 50 people from the Singapore International Chamber of Commerce travelled to the Iskandar Development Region on Friday.
The visit was organized by the Malaysian High Commission, the Malaysian Trade Commission and the Malaysia External Trade Development Corporation days after the Prime Ministers of Malaysia and Singapore agreed to set up a joint ministerial committee to look into areas of cooperation in the development of the region.
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The business delegation, which was accompanied by the Malaysian High Commissioner to Singapore, Dato N Parameswaran, met with representatives from Malaysia’s investment holding arm Khazanah Nasional, Nusajaya - which will become Johor’s new administrative center and also from the Tanjung Pelepas port.
Foreign investor interest is high, reveals Chairman of the Port of Tanjung Pelepas, Datuk Mohd Sidik Osman as he compares how the IDR differs from other economic zones in Malaysia.
MSO: In a way, it is the first regional growth area being developed by the government, it has tremendous prospects because it is well located as I said earlier, it is close to Singapore. It is supported by good infrastructure, by ports and by airports. If you do it well, if you take care of all the fundamentals like governance, less bureaucracy, I think things will go well. There have been a few parties that want to ask us about the IDR and how we are supporting IDR. Basically, the land behind the port is a valuable land and they are interested in the land for investment. There are also Singaporeans which are interested. There are companies which are looking to import products from Malaysia, they want to do the processing around here before it goes to Singapore. It is good that there is some good cooperation (between the two countries) and working relations supporting the IDR project.
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| Malaysian High Commissioner to Singapore N Parameswaran speaks with journalists |
Speaking to Singapore journalists after touring Johor’s new administrative center, Nusajaya, Malaysia’s High Commissioner to Singapore, Dato N Parameswaran highlighted the importance of strong economic cooperation between Malaysia and Singapore.
NP: We must work on something which is mutually advantageous, which is a direction that the two Prime Ministers are going. But Singapore has been our great investor, and one of our greatest investors because of proximity. So it is natural to welcome investors from Singapore. In fact, they have been here. Most of the factories you saw in the first phase of industrial development are owned by Singaporeans. And the first one here was set up in SILC (Southern Industrial and Logistics Clusters) is also Singaporean. So they have been naturally coming here from before, even before the IDR. HG Metal bought such a massive area here to set up. The movement of Singapore investments into Malaysia has been there all the time especially SMEs and all. But I must say, now the politics are very good, things have changed, and our relations have picked up a lot and I think it will be good if Singapore comes.
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Philip Overmyer, Executive Director of the Singapore International Chamber of Commerce was impressed with what he saw at the Iskandar Development Region, which he feels show the level of commitment by the Malaysian government to make this project succeed.
PO: Nusajaya Center, there is just a lot more there than I thought it would be. Certainly there will be residential facilities (when we drove by) were quite impressive. I was amazed at the amount and the extent of which they are already starting to develop this area into what looks like is going to be an important center. It is very clear that Malaysia is committed to the development without a doubt, massive infrastructure projects are underway. The areas that still need more clarification sounds like they will come are things that have to do with incentive, the nature of what that means, whether you have to be in a physical place to get an incentive, how much the incentive will be. But all of that apparently will roll out over the next few months. So I expect now, companies will be waiting what really is it are the government incentives to go there.
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Sharing the same sentiments about government incentives is Mr A.Y Angullia, Managing Director of ST & T International Pte Ltd - a company which deals with hospitality and leisure products. He hopes to identify a suitable site for his company’s next hospitality project. Mr Angullia spoke of the factors he needs to consider before making an investment.
AYA: I already spotted one area and that is the Puteri Harbour. That will be very interesting to meet the needs of the holiday makers. And people who want to stay longer but with minimal expenditure. So when there is joint government cooperation, this can support Singapore and Malaysia tourism in a perfect manner. If a tourist wants to lay back and relax, if they prefer to, they can come to Malaysia to get chalets or bungalows in this area. They can have this kind of experience, and they can also have a boat transfer from Puteri Harbour to Singapore very easily. It is only a very short distance from Singapore using a water bridge which involves a water ferry or sea transfer. This is only our feasibility study. We will look into deeper and fulfil our purpose by looking for contacts, to get the right person to speak with to get more info, to work out the details like study the soil, the ground, the environment, the water, the air, we have to do deep studies. We also need to look into the supplies of good food. Good food means high quality water, high quality fruits and vegetables, meat supplies, how can they maintain a good quality.
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| copyright Radio Singapore International/do not reproduce without permission |
When Malaysian Prime Minister, Abdullah Ahmad Badawi met with Singapore’s Prime Minister Lee Hsien Loong in Langkawi recently, the Iskandar Development Region figured prominently in the two leader’s discussions.
Mr Badawi warmly welcomed Singapore investors to the IDR, and likened Singapore’s investments in “Johor’s economic super corridor” to Hong Kong’s influence in the development of Shenzhen in China.
Mr K K Lam is Director of the Hong Kong Economic and Trade Office based in Singapore. He offers his views.
KKL: I have a lot of confidence that the close proximity between Singapore and the Iskandar Region is definitely a positive element, in the same sense that Hong Kong and Shenzhen were able to take off during the years when Shenzhen was developing quickly into a modern metropolis, and an industrial and services center. One of the reasons why I came today was to see if there are opportunities for Hong Kong investors to take part in the future development inside the Iskandar Region. I think since some of the Hong Kong investors must have been involved in the evolution of the Shenzhen Special Economic Zone, I am very confident that apart from making investments in the future, they will also bring in the experiences to bear on the developments in the Iskandar Region.
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| copyright Radio Singapore International/do not reproduce without permission |
Head of Economics at United Overseas Bank, Jimmy Koh feels that two factors will be crucial in fostering greater economic engagement by Singapore companies into the Iskandar Development Region. One is the political environment.
JK: I think in terms of the political environment, it is extremely conducive. In fact, I think it is the best time over the last 20 years in terms of the political atmosphere and over the last one week, the durian diplomacy definitely helped further right because most of the economic cooperation that failed to materialize as much as participants would like to see is always this issue of political will. And I think in the current situation, the political expectations seem to be a lot more conducive, a lot friendlier.
Another factor is competition posed by globalization, making it a necessity for Singapore companies to balance their production with business costs. The Iskandar Development Region, he adds, can provide Singapore companies an alternative location for out-sourcing.
JK: Companies moving from various countries out of their borders. But right now, whether you like it or not, they will move out. You either let them move out of Singapore into the neighbouring countries which they have been doing, or they will move to China. It is the globalization force that is at work that has probably aided this. In fact, through conversations with some companies today, Singapore companies, be it the MNCs or SMEs, some of them have been here for the last couple of years. From that perspective, it is extending what the private sector has done on a regulatory basis. So over time, those companies that have been a little bit careful choosing China, they will probably choose this region as another alternative. We talk about a global environment of outsourcing, you have China, India and even Vietnam. You have 2 + 1. So this Iskandar Region can be the 2 + 1 + 1 as another alternative of outsourcing for companies in Singapore etc.
Following the Langkawi retreat attended by leaders of both Singapore and Malaysia, both countries have agreed to set up a joint Ministerial committee that will study and facilitate the possibility of Singapore investments going into the Iskandar Development Region.
A strong Singapore presence in Iskandar will reap benefits for both countries.
This will augur well for the IDR’s development in the long term . |
MediaCorp Group
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