Cross-border labour activities and investment flows are first stage benefits derived from the Johor-Singapore Special Economic Zone (JS-SEZ) in favour of Malaysia over the long run
Asean+3 Macroeconomic Research Office (AMRO) chief economist Hoe Ee Khor said the SEZ will be a “game changer” for Malaysia and Singapore as the two economies are closely linked and the SEZ will complement both.
“Singapore is a labour-constrained economy and depends very much on foreign workers. One of its main sources of foreign workers is Malaysia. Singapore also has a lot of savings and capital, and Malaysia will benefit from investment flowing from Singapore into Johor.
“So, those factors will boost both economies in the long term,” he said during a virtual media briefing during AMRO’s January quarterly update of the Asean+3 Regional Economic Outlook (AREO) Kuala Lumpur today (Jan 18).
On January 11, Malaysia and Singapore inked a memorandum of understanding to work on the JS-SEZ to strengthen economic connectivity between Johor and Singapore.
Prime Minister Datuk Seri Anwar Ibrahim and his Singapore counterpart Lee Hsien Loong witnessed the signing.
The JS-SEZ is expected to further boost trade between Johor and Singapore, which could flourish like the Chinese city of Shenzhen, a success story of a special economic zone linked to Hong Kong.
It is also expected to improve the business ecosystems of both Iskandar Malaysia and Singapore. Among the sectors the zone is targeting are electronics, financial services, business‑related services and healthcare.
Last year, Johor secured RM70.6 billion worth of foreign investments in various sectors.
Singapore is the state’s second-largest foreign investor, contributing about 70 per cent to Johor’s total foreign direct investments in the manufacturing sector.
