Firms that wish to undertake major projects in business-friendly Singapore but run into challenges will find the special economic zone in Johor a “big plus”, Singapore Prime Minister Lawrence Wong said on Tuesday (7 Jan).

The Johor-Singapore Special Economic Zone (JS-SEZ) will allow these companies, for instance, to tap Singapore’s strengths in areas such as research and development (R&D) as well as Johor’s strengths in having abundant land, said Mr Wong.

“That, I think, (is) a big plus, potentially, if the whole idea of an SEZ will make it even more attractive for new investors to come and say, ‘Look, I have a big project I would like to do. In the past, (it was) very hard to do it all in Singapore. But now, with Singapore and Johor, I can start to configure the operations.’”

He noted that besides R&D, Singapore has strengths in other areas such as higher-end advanced manufacturing.
 

“Some of the other parts which (are) different – different value propositions – which we don’t have strengths in, but Johor has strengths in, which take up more land, for example, perhaps (these are) more competitive, more attractive in Johor.” 

Mr Wong was speaking to Singapore media after witnessing with Malaysia Prime Minister Anwar Ibrahim the exchange of an agreement on the JS-SEZ, which aims to woo high-value investments and create skilled jobs to boost economic growth in both countries.

Mr Anwar had hosted Mr Wong for a two-day Malaysia-Singapore Leaders’ Retreat in Putrajaya.

 

Mr Wong called the JS-SEZ agreement “a good one between both sides”, although he warned that this was just the beginning and that the zone’s success depends on how businesses respond to the initiatives in place.

Both governments will also need to have some “degree of responsiveness to continuous feedback from the business community”, and closely track progress in terms of new investments and jobs created, he said.

Assuming that both sides work out the implementation details well, including aspects like the freer flow of goods, people, and data, Mr Wong thinks that businesses will “respond positively”.

“And from as far as we can see, there’s a lot of interest on the Singapore side. I mean, we have not engaged in Malaysian businesses, but when we engage Singapore businesses, there is a lot of interest,” he said.

Despite that, Mr Wong said the JS-SEZ will not only target existing businesses in Singapore, but also investments from around the globe.

“The even bigger attraction to us is not just about existing Singapore businesses. That’s just optimisation of configuration of an existing operation,” he added.

“What we hope to do is to attract new investments.”
 

Regular meetings on bilateral issues

The JS-SEZ agreement has been a year in the making as officials from both sides thrashed out a deal, in what Mr Anwar had described earlier on Tuesday as a unique and rare initiative between two countries working as a team.

Moving forward, Mr Anwar said he and Mr Wong have also agreed to meet on a “quarterly basis” to review the progress of resolving outstanding bilateral issues between the two countries. These include areas like water supply, airspace management, and maritime boundaries.

Mr Wong said in the wrap-up interview on Tuesday that the two sides have made “some progress” on these complex issues but have “understandably” not come to a resolution, citing differences of views.

“So, both Prime Minister Anwar and I are fully committed to continuing the engagement and discussions, and hopefully with the nudging from the prime ministers, with the constant engagements we have and continued dialogue, we can see some progress by the next leaders’ retreat across all three bilateral issues,” he said.

Mr Wong said the leaders are also working out the schedules for the quarterly meetings, with ample opportunities to meet until the next leaders’ retreat in Singapore later this year.

“We are discussing a few platforms where we might do so, including possibly at Johor-Singapore SEZ,” he said.

“So, there will be some of these that we will find suitable milestones to get together, to meet, and when we do so, we can use these occasions to take stock of the discussions on the outstanding bilateral issues and make sure that we continue to make progress on that.”

Mr Wong said he has had several occasions – including at Association of Southeast Asian Nations (ASEAN) and multilateral forums – to meet Mr Anwar, and that the both of them have built up a “good friendship” with a relationship based on mutual trust and understanding.

“So, that sets the tone for the overall relationship – the relationship amongst the ministers and officials – and also for us to work together on bilateral issues,” he said.

“I would say that we are on a very strong foundation, starting with the leadership level. And among the ministers, many of them have been interacting with one another on numerous occasions as well including last night and today at the leaders’ retreat.”

Mr Wong added that he had also suggested that both sides restart “civil service games” that they used to hold as a tradition.

“So, it’s not always about work, it’s not always about officials coming together to talk business or negotiate and to engage on difficult issues,” he said.

“But informally as well, there is an opportunity for us to get together, relax and get to know one another and hopefully more of these exchanges can continue to happen across the board.”
 

New areas of cooperation

Meanwhile, Mr Wong noted that Malaysia and Singapore will pursue new projects like importing electricity from Sarawak through undersea cables, calling this a “massive project if it comes to fruition”.

Earlier on Tuesday, both countries also exchanged Memorandums of Understanding (MOU) to cooperate further in areas like education, urban development, and the environment.

“The MOUs we just signed today, for example, on carbon capture. That’s just an MOU and we can potentially flesh out cooperation on more concrete projects on sustainability and renewable energy,” Mr Wong said.

“So, these are new areas which we hope we can flesh out and potentially be able to take concrete steps forward by the time we next meet at the next leaders’ retreat.” 

Another area of cooperation that Mr Wong highlighted is the Johor Bahru-Singapore Rapid Transit System (RTS) Link, which aims to ease congestion on the Causeway and is expected to start operating by the end of 2026.

Mr Wong acknowledged that some businesses in Singapore had expressed concerns that the RTS will take away their business as more Singaporeans head across the border.

However, he urged these businesses to update their offerings and business models to better attract Malaysians who might use the RTS to visit Singapore too.

“So, what’s clear is whether we have the RTS or not, the nature of business is constantly changing. There will always be new models, new competition, new disruptions and businesses have to adapt to all of that,” he said.

“You cannot just stick to the same old thing all the time. You have to adapt. You have to adjust. You have to update your offerings in order to appeal to new customers. That’s why, from the government’s side, we will continue to support our heartland businesses.”
 

Source: This article was first published on CNA.