KUALA LUMPUR: The Johor-Singapore Special Economic Zone (JS-SEZ) should bolster trade and investment, tourism and people-to-people connectivity, as well as foster sustainable ties between Malaysia and its neighbour across the Causeway, economists said.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the zone would capitalise on each other's strengths.
Malaysia has the landmass and talent pool, as well as energy resources, especially in the renewable energy (RE) space, where Singaporean companies can tap into these resources, he noted.
"Singapore on the other hand has the technology and capability to produce high tech products and they would require a space that is economical to produce.
"Along the way, there could be transfers of technology as their companies would be integrated with the local supply chains," Afzanizam told the New Straits Times.
Putra Business School Assoc Professor Dr Ahmed Razman Abdul Latiff opined that the creation of a special economic zone is a win-win situation for both countries.
It will ease the business and trading activities between the two countries especially with regards to talent movement, offering of services and products supply chain movement.
This is helped by the implementation of technology applications and tools such as QR code clearance system and digitisation of cargo clearance, most likely using the latest blockchain technology.
"Of course there will always be challenges and issues when embarking on this ambitious project such as cybersecurity and the rate of digitalisation adoption but once everyone realises its overall benefits, all these challenges will be addressed with greater speed and effectively handled.
"Johor will be benefiting from this special economic zone greatly and will be able to increase its contribution to the country's gross domestic product (GDP) higher than before.
"Singapore will be able to attract the best talents from Malaysia without them having to migrate there," he added.
Overall, Ahmed Razman said it is going to have a positive impact as long as it has a clear vision and is managed by professionals with a high level of governance and integrity.
Iskandar Regional Development Authority (IRDA) chief executive Datuk Dr Badrul Hisham Kassim said the formation and realisation of this zone will, no doubt, bring massive opportunities and advantages to Iskandar Malaysia as an investment destination for foreign and domestic investors and businesses.
He noted that this zone, plus the Special Financial Zone in Forest City, will not only contribute towards the region's new cumulative investment target of RM636 billion by 2030 but will have a major spillover effect on the holistic development in Iskandar Malaysia which includes the social and environmental aspects.
This strategic economic boost is aligned with Iskandar Malaysia's latest Comprehensive Development Plan (CDPiii) 2022-2030 and is expected to help drive the fulfilment of socio-economic goals such as job creation and increase of household income average in the region.
Badrul Hisham also said JS-SEZ can improve economic cooperation by leveraging on the existing investment momentum and this will further enrich the complementary value proposition between Malaysia and Singapore.
"We see this as a tremendous benefit for Iskandar Malaysia and its many stakeholders. IRDA will certainly optimise the opportunities from the economic zone for maximum benefit of the region towards becoming a strong and sustainable metropolis of international standing that it aims to be.
"The existing Iskandar Malaysia Investment Service Centre (IMISC), under IRDA, continues to coordinate, facilitate, and be the bridge between the investors and various approving government agencies and is ready to support the implementation of the one stop centre for JS-SEZ," he noted.
The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) said with its strategic location in Asean, JS-SEZ is well positioned to connect both countries' investors and businesses as well as foreign investors to new opportunities from the increasing border trade and rapid economic growth in the region.
It added that both Malaysia and Singapore can complement and reinforce each other to achieve optimal investment returns and economic value, leveraging on both countries' strength and resources.
"Singapore has a deep talent pool and technology, strong innovation ecosystem and investment flows, while Johor has the manpower, cost advantages relative to Singapore, land resources, and connectivity with the rest of the states in Peninsular Malaysia.
"Johor and Singapore can identify mutual benefits and clearly define responsibilities in the proper planning and implementation of the JS-SEZ development framework.
"We believe that a comprehensive planning and effective implementation, especially with a high level of commitment from top leadership will ensure the success of JS-SEZ," it said in a statement.
ACCCIM stressed that it is crucial that the taskforce/committee overseeing it to have regular constructive communications, feedback and engagements with the business community, working together for ensuring the JS-SEZ success, leading to better outcomes.