KUALA LUMPUR: The Johor-Singapore Special Economic Zone (JS-SEZ) is set to strengthen economic ties between Malaysia and Singapore while attracting diverse investment opportunities, according to industry experts.
They believe the economic zone is well-positioned to meet the government's target of securing 100 projects within its first decade, with Singapore playing a key role.
Dr. Azmi Hassan, senior fellow at the Nusantara Academy for Strategic Research, highlighted the significance of the three newly designated flagship zones in boosting the SEZ's potential, particularly in the specialised sectors assigned to each zone.
"These three areas have specialities that can facilitate the SEZ. The government's aim to achieve 100 projects also will not be an issue because Johor is not working alone. Singapore has proven they can provide for the sectors needed to be expanded within the SEZ," he told Business Times.
Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid said Malaysia needs a spark that would attract foreign and domestic investors amid uncertainties in the global economy and market.
He said the JS-SEZ would clearly pave the way for more infrastructure investment such as logistics, utilities, and talent pool.
It will have spillover effects, as the potential business centres and manufacturing hub will lead to township development, attracting a talent pool that would need to reside in close proximity to or within these areas.
"Furthermore, geographically, historically, and culturally, I think it is high time Malaysia and Singapore should forge closer ties when it comes to investment and trade.
"The next hurdle would be how both countries can speed up the implementation knowing that there would be challenges from the regulatory and bureaucracy front," he added.
Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) president Datuk Ng Yih Pyng said effective planning, monitoring, coordination, and enhanced communication of both countries are critical as it affects the performance and deliverables of the zone as well as the trust of both countries.
He stated that the identified projects must be implementable and doable within a clear timeline and the resources needed.
"The effective implementation of the SEZ will deepen the economic partnership between Malaysia and Singapore, spurring cooperation and significant investment opportunities in diverse sectors and enhancing regional connectivity," he said.
Ng also urged domestic SMEs to explore the numerous opportunities, finding suitable partners to invest in the zone.
"More importantly, the government must ensure that domestic industries will benefit from foreign direct investment in the SEZ through technology transfer, sharing of expertise, and creation of job opportunities for local people," he added.
OCBC Bank (Malaysia) Bhd chief executive officer Tan Chor Sen said the JS-SEZ has the potential to be a magnet for international capital through the various initiatives that have been announced.
These include the passport-free QR code clearance at Singapore's land checkpoints with Malaysia, the Invest Malaysia Facilitation Centre–Johor (IMFC-J), technical and vocational education and training (TVET)-related initiatives, and streamlined customs procedures for land intermodal transhipments.
"We are particularly excited about the move to explore enhancing market access of financial institutions in both countries and the tax incentive packages," Tan said.
Malaysia and Singapore today kicked off the much-awaited JS-SEZ with the ambitious target of attracting 100 projects in 10 years.
The JS-SEZ now covers the Iskandar development region, Forest City, Pengerang Integrated Petroleum Complex, and Desaru, a land area of 357,128 hectares.
The Iskandar development region also covers Johor Bahru City Centre, Iskandar Puteri, Tanjung Pelepas-Tanjung Bin, Pasir Gudang, Senai-Skudai, and Sedenak.
It also covers new priority sectors such as aerospace, electrical and electronics, chemical, medical devices, and pharmaceuticals. These are in addition to other sectors such as business services, the digital economy, healthcare, manufacturing, tourism, education, logistics, energy, and food security.
"Both countries are committed to promoting the expansion of 50 projects for the first five years and accumulating 100 projects in the first 10 years. What we want to do is really populate the SEZ with the right portfolio and investors," Economy Minister Rafizi Ramli told media and analysts in a briefing last week.
"I feel that the first wave of takers in the next five years are those global companies looking to manage their geopolitical risks. We have an advantage because of ASEAN's viability as a major economy in the next 15 years".
Rafizi also said that energy transition companies will be the main targets for the economic zone because of the growth in data centres.