[SINGAPORE] Malaysia hopes to draw back some of the hundreds of thousands of Malaysians who cross the causeways daily, by tapping them to power the Johor-Singapore Special Economic Zone (JS-SEZ), said panellists on Wednesday (Jun 18).
However, Idzham Mohd Hashim, president and chief executive officer of Iskandar Investment (IIB), stressed that this was not about competing with Singapore, but about creating a “symbiotic relationship” that benefits both countries.
He was speaking on a panel titled “Johor Focus: Building the Future with JS-SEZ”, alongside Mohd Noorazam Osman, CEO of the Iskandar Regional Development Authority (IRDA) and former mayor of Johor Bahru.
The discussion was part of the Nikkei Forum held in Medini, Johor, and moderated by the Japanese news organisation’s senior producer Kaori Takahashi.
IIB is leading the infrastructure development in the JS-SEZ, while IRDA oversees planning and coordination.
The agreement to establish the SEZ was signed by Singapore and Malaysia in January with the aim of having both countries work together to attract new investment projects from around the world.
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The SEZ covers an area of more than 3,500 sq km, roughly four times the size of Singapore.
Idzham said that while the zone’s infrastructure – including roads, power supply, and fibre optic networks – is already in place, what is still missing is the “software”.
“Most of the businesses who come here… they ask: ‘Do you have (the) talents?’” said Idzham. “We do have (the) talents, because 300,000 of them go to Singapore every day.”
Both Idzham and Noorazam pointed to plus points in Johor that could woo back these residents, such as more industry-relevant training, increased job opportunities through business expansion, and the lower cost of living in the state.
For instance, Noorazam said the Johor Talent Development Council is working with academic and vocational institutions, as well as industry players, to ensure that training matches demand.
While he did not go into detail, he added there are also plans to offer tax incentives and to work towards a minimum starting salary of RM4,000 (S$1,210) for graduates in Johor.
He added that investors should see the lower wage expectations – at around 50 to 75 per cent of Singapore’s salary levels – as part of the SEZ’s broader cost advantage.
In a separate panel discussion at the forum titled “Building Digital Nations: Innovation, Inclusion and Impact” – which mostly focused on retaining talent in Johor – Johor Corp’s chief talent officer Najmie Noordin acknowledged that it will be an uphill task to bring Malaysians working across the border back home.
He noted that it would be difficult to convince Johoreans earning the equivalent of RM15,000 in Singapore to return for just RM5,000.
Moderator Brian Fernandez, CEO of BizTech Asia, pointed out that many of these Johoreans – “the cream of the crop” – work in the Republic purely for the higher pay.
However, he added, many would also be willing to stay if salaries were even half of those in the city-state, especially given the daily grind of commuting.
In any case, Najmie noted that one plan is to develop more high-quality local talent and encourage them to stay, as well as attract workers from other parts of Malaysia, such as Melaka.
Responding to the discussion, Fadzli Abdul Wahit, head of digital transformation at Malaysia Digital Economy Corporation, said that efforts to retain talent must also focus on understanding industry demand.
Rather than compete directly with advanced economies, Malaysia should identify niche opportunities, such as supplying digital assets to mature gaming and animation markets such as Japan and South Korea, where such content is in short supply, he added.
Even so, panellists discussing the JS-SEZ maintained that Johor’s cost and location advantages make it a compelling base for companies looking to scale up.
Idzham noted that the cost of doing business in Johor is nearly 60 per cent lower than in Singapore, and about 30 per cent lower than in Kuala Lumpur – a key advantage for companies looking to expand across the border to grow their businesses.
As for what Singapore brings to the table, Noorazam highlighted its global networks and financial strength. He added that Johor’s vast land availability, affordability and talent pool make it a natural partner.
In response to Takahashi on how the JS-SEZ would shape Johor’s future as an innovation hub, Idzham said that the master plan for Medini is focused on business tourism, research and development (R&D), and environmental, social and governance-led urban development.
The plan includes a new convention city near Legoland, a tech zone for R&D, and a net-zero carbon business district, with support from universities, the government and industry players.
“We should look at both Johor and Singapore as one growth area,” noted Noorazam. “The JS-SEZ… can become the gateway to Asean, a market of 700 million people.”
