Analysis: Need for Malaysia, Singapore authorities to strike balance on key issues for SEZ in Johor to succeed

KUALA LUMPUR: As plans to launch the Johor-Singapore Special Economic Zone (JS-SEZ) gain momentum and more details emerge on its scope and goals, both sides will need to strike the right balance on key issues for it to succeed, say analysts.

These include how to attract “high-end” investments from all over the world while being cognisant of the need to minimise bureaucracy and red tape.

Beyond that, they added that both countries must be in tandem with one another in decision-making, and especially between the Johor state government and its federal counterpart.

Malaysia’s Economy Minister Rafizi Ramli told reporters on Wednesday (Jul 10) that the proposed JS-SEZ aims to attract “cutting-edge” firms backed by venture capital (VC) and private equity (PE) investors that move nimbly.

This, he said, would require minimal bureaucracy in the zone, a task experts described as challenging given it is expected to cover an area in Johor four times bigger than Singapore with multiple local and federal authorities involved.

Dr Shankaran Nambiar, an economist and visiting fellow at Australia National University’s Crawford School of Public Policy, said Singapore and Malaysia should work together to address such issues in a bid to attract “global players” to the JS-SEZ.

“Technically, Singapore and Johor offer the best blend of competencies and advantages that will benefit both nations,” he told CNA, referring to Singapore’s expertise in attracting high-value investment and Johor’s lower cost of doing business.

Dr Nambiar stressed that Malaysia’s state and the federal agencies will need to match up to Singapore's demands in terms of the ease of doing business. 

“Agencies in Singapore will set the tone on procedures and timelines, but if