Johor eyes more S'pore investment<\/p>\n
By David Chew<\/p>\n
SINGAPORE (JP): The South Malaysian state of Johor wants an
\ninflux of Singaporeans now that massive traffic jams along the
\ncauseway, which had discouraged them from patronizing it, have
\neased. The jams came about when the customs department made
\nstringent checks on goods vehicles in late September to curb
\nsmuggling, false declarations and other transgressions.<\/p>\n
However Johor's Chief Minister, Datuk Abdul Ghani Othman,
\nfeels that the 1-km long causeway should not be the only main
\naccess for the Singaporeans who have traditionally found his
\nstate's close proximity, abundant resources, excellent facilities
\nand friendly people conducive for business and recreation.<\/p>\n
There is instead to be a second link -- a 1.9 kilometer
\nconcrete bridge linking southwestern Johor to northwestern
\nSingapore, which will be officially opened by the Prime Ministers
\nof Malaysia and Singapore on Jan 2.<\/p>\n
With a three-lane dual carriageway capable of carrying 200,000
\nvehicles daily, or four times the capacity of the causeway, this
\nalternative main access will considerably reduce the traffic
\ncongestion on a long-term basis at Malaysia's first road and rail
\nlink with Singapore which was constructed in 1923.<\/p>\n
Johor's concerted trade promotion moves targeted at Singapore
\nform the thrust of an overall wider Malaysian effort to attract
\nforeign investors and tourists in the wake of the currency and
\nstock market turmoils that have hit Southeast Asia, a situation
\ncompounded by the haze.<\/p>\n
Now that the monsoon rains have phased out the haze, Malaysia
\nbelieves that many foreign investors and tourists who kept out of
\nthe region could be persuaded to come back. This could give the
\ncountry an opportunity to sell them its attractions, including
\nstrong economic fundamentals, excellent facilities and friendly
\npeople.<\/p>\n
Malaysia believes Singapore can play a dual role as an
\ninvestor and a market for its attractions to foreign investors.
\nSingapore has the world's busiest port and airport, and is also
\nthe commercial and technological hub of Southeast Asia where the
\nregional headquarters of many foreign multinational companies
\n(MNC's) are located.<\/p>\n
From 1980 to August 1997, Singapore invested in 2,059 projects
\nworth M$12.684 billion in Malaysia's growing manufacturing
\nsector, far ahead of many foreign investors. The island republic
\nis also Malaysia's second largest trading partner after Japan,
\naccounting for 16.9 percent of Malaysia's total trade in 1996
\ncompared to 19 percent for Japan, according to official
\nstatistics.<\/p>\n
With its strong economic fundamentals and sound financial
\npolicies, Singapore has also emerged relatively unscathed from
\nthe currency and stock market turmoils, and is helping world
\norganizations like the International Monetary Fund (IMF) with
\nrescue packages for countries like Thailand and Indonesia which
\nhave been badly hit.<\/p>\n
The bulk of Singapore's investments in Malaysia are
\nconcentrated in Johor because it is the nearest Malaysian state
\nto the island republic. Of the M$12.86 billion Singapore invested
\nin Malaysia's manufacturing sector between 1980 and 1997, M$6.35
\nbillion or 50 percent was in Johor, around Johor Baru and its
\nimmediate vicinity.<\/p>\n
Delivering a keynote address at an investment promotion
\nconference in Singapore on Nov. 6, Ghani said the long-term
\nsolution to the traffic jams would be \"a modern and very
\naccessible crossing which will serve the needs of vehicles to and
\nfro much better than the causeway\".<\/p>\n
It is part of an integrated project to develop a 10,000-ha new
\ntown in Gelang Patah, southwestern Johor, at a cost of M$1.6
\nbillion, which would be physically linked to Tuas in northwestern
\nSingapore by a concrete bridge.<\/p>\n
The bridge is close to where many of Singapore's electronics
\nfactories are located. Their raw materials sourced from Johor and
\nother states further north, and the state's requirements of
\nforeign imports via Singapore, would bypass the causeway, thus
\neasing the congestion there.<\/p>\n
Ghani also disclosed that the second link could provide easy
\naccess for Singaporeans to take advantage of investment
\nopportunities beyond Johor Baru and its vicinity, in areas
\nfurther north like Muar, Kluang, Segamat, Batu Pahat and Kota
\nTinggi. This is because it is connected to the vast network of
\nroads, highways and flyovers serving these areas which have been
\nearmarked for long-term development.<\/p>\n
\"We have tremendous space as Johor is a big state with
\ncompetitive advantages and practices a very open economy. There
\nare 30,000 acres of mixed development comprising of industries,
\ncommerce and good housing in the immediate vicinity of the second
\nlink,\" he said in an interview with the writer in Johor Baru on
\nNov. 24.<\/p>\n
Traditionally Singaporean investors have preferred Johor Baru
\nand its suburbs where they have opened up branches of their
\ncompanies or set up joint ventures with the people of Johor. The
\nstate capital's proximity enables them to commute daily via the
\ncauseway from Singapore where they maintain their headquarters
\nand also export their Johor-manufactured products overseas.<\/p>\n
How will Singaporeans respond to Johor's overtures in the
\nlight of Ghani's latest trade mission? Judging from the many
\ninquiries at the exhibition booths, especially on investment
\nopportunities in property development and tourism, it would
\nappear they are quite keen on investing in Johor.<\/p>\n
But it would be too simplistic to suggest that they will
\nimmediately make a beeline for Johor, as how they will decide
\ndepends very much on latest developments in Malaysia\/Singapore
\nties.<\/p>\n
Johor is the front-line state in Malaysia's ties with
\nSingapore, traditionally along the lines of a hinterland with its
\nport. Johor\/Singapore links are so close and so numerous in terms
\nof economics, politics, culture and personal\/family ties that
\nthey have become both cordial and troublesome -- experiencing
\nboth ebbs and flows like the tide.<\/p>\n
On the one hand, Johor has benefited from the spill-over
\neffects of Singapore's rapid development where pressure on land
\nand escalating costs made it necessary for land and labor-
\nintensive industries to be relocated north of the causeway with
\nits abundant land, cheaper labor and lower costs. Since then
\nJohor's economic development has tailed closely behind
\nSingapore's, progressing as Singapore progresses.<\/p>\n
But on the other, these advantages appear to be offset by more
\nSingaporean visitors. There already about 30,000 of them crossing
\nthe causeway daily to do business, shop or visit friends and
\nrelatives. Their lavish spending, amounting to millions of
\nMalaysian Ringgit, has raised the cost of living and price of
\ngoods in Johor, especially Johor Baru, making the average Johor
\nconsumer resentful of what he feels to be imported inflation.<\/p>\n
Johor maintains a system of checks and balances in its ties
\nwith Singapore which are motived by economic expediency but
\nconstrained by political considerations. Johor must always remind
\nitself that despite its close economic ties with Singapore, its
\npolitical affiliations lie with Kuala Lumpur. As a state within a
\nlarger federation, it cannot deal directly with an independent
\nnation like Singapore without prior clearance from Kuala Lumpur.<\/p>\n
One issue central to Johor\/Singapore ties concerns
\ninternational trade, or more specifically, Malaysia's
\nexport\/import of goods via Singapore as the world's busiest port.
\nMalaysia is developing its own ports and would prefer its
\nexports\/imports be shipped through them, particularly Port Klang,
\nthe premier port serving Kuala Lumpur and the Klang Valley. In
\nthis way considerable foreign exchange could be saved.<\/p>\n
Malaysia has given directives for its exporters and importers
\nto use Port Klang for their international shipments, which meant
\nbypassing Singapore. To many Singaporeans, this was a major cause
\nof the causeway traffic jams.<\/p>\n
Johor walks a tightrope in following this directive. Though
\nnational pride dictates otherwise, it makes economic sense for
\nthe bulk of its factories, which are located in the Johor Baru
\narea, to ship their exports\/imports via Singapore rather than
\nPort Klang, about 500 km to the north. Moreover many of the
\nfactories owned by Singaporeans would prefer Singapore rather
\nthan Port Klang as the entry\/exit point for their products.<\/p>\n
Johor's answer is to develop its own ports, Pasir Gudang and
\nTanjong Pelepas, so that its importers\/exporters can eventually
\nuse them in line with the Federal Government's directive to use
\nMalaysian ports. But in the interim, Johor would presumably
\nexplain to Kuala Lumpur why Singaporean investors should be
\nallowed to use their own port if Johor wants them to put their
\nmoney in the state.<\/p>\n
The second link between Johor and Singapore will become
\noperational in a month's time, and its success in facilitating an
\ninflux of Singaporean and other foreign investors to Johor will
\ndepend very much on how bilateral ties are conducted.<\/p>\n
The writer is a freelance journalist based in Singapore.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/johor-eyes-more-spore-investment-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }