Malaysia’s Johor-Singapore SEZ set to spur growth, but ‘development gap’ poses risk

The Johor-Singapore special economic zone (JS-SEZ) is no longer just seen as a catalyst to revive the troubled Forest City multi-billion development, as a sprawling vision has been unveiled to boost trade, investment and jobs across a range of sectors on the Malaysian side of the causeway.

Experts, however, warn that goal alignment and narrowing the development gap between the two countries will be crucial to ensure the success of the JS-SEZ, which will span 3,500 sq km (1,400 square miles) in Johor’s southern and eastern regions.

In a joint news conference in Putrajaya on Tuesday, Malaysian Prime Minister Anwar Ibrahim hailed the “spectacular” and “unique” partnership between Malaysia and Singapore.

“Very rarely do you find two countries working together as a team,” which was a sign of their “compact relationship”, Anwar said, after he and his Singaporean counterpart Lawrence Wong witnessed the signing of a deal to develop the JS-SEZ.

A total of 16 sectors will anchor the JS-SEZ, ranging from manufacturing and electronics to tourism.

Johor is the third largest contributor to Malaysia’s economic growth, at 9.5 per cent of gross domestic product in 2023.

Johor Bahru, which is the core of the JS-SEZ, however, suffers from a lack of diversity in revenue as local businesses rely heavily on weekend trips by wealthier Singaporeans looking to stretch their dollar at local grocers and hair salons.