PETALING JAYA: While the Johor-Singapore Special Economic Zone (JS-SEZ) deal, scheduled to be signed today, promises job creation and economic benefits, experts say its success will depend on regulatory alignment, strong leadership and seamless cross-border collaboration.
Socio-Economic Research Centre (SERC) executive director Lee Heng Guie said leadership and commitment are the foundational pillars of the SEZ.
“Hopefully, we secure a win-win outcome. Top leadership must be committed and that commitment must cascade down to those driving the SEZ,” he told StarBiz.
Similarly, public policy analyst Adib Zalkapli stressed the importance of regulatory alignment.
“I think one of the most important measures to make JS-SEZ a success is to harmonise existing regulations of the two countries to create a seamless business environment,” he noted.
He also pointed out that strong bilateral relations and political stability in Malaysia would be essential for the SEZ’s long-term success.
Lee highlighted the need to reduce bureaucracy and improve processes for investors and cross-border movement.
“What investors want is reduced bureaucracy, easy entry. For the causeway, you need to make people-to-people movement simple and easy,” he added.
He also stressed the need for seamless collaboration among federal, state, and local authorities for the SEZ to be successful.
“Customs and immigration are federal matters, so federal, state and local councils must work together to coordinate and quickly address areas that need improvement,” Lee explained.
While he acknowledged that the full benefits of the SEZ may not be immediate, Lee is optimistic about its long-term impact.
“In the shorter term, we may not see its full potential. But when investments kick off and create jobs, there will be a lot of spillover effects on the local economy, helping to boost not just Johor’s economy but the nation’s as well,” he said.
Johor’s contribution to Malaysia’s gross domestic product (GDP) has remained steady at around 9.5% in recent years, registering 9.5% in 2023.
This is despite the state accounting for 12.3% of the country’s population, or 4.1 million people and 12.7% of the national labour force, which totals 16.4 million people.In comparison, Selangor leads with a 26% share of GDP, followed by the Federal Territory of Kuala Lumpur, including Putrajaya, at around 16%.
Johor’s GDP per capita has grown from RM30,469 in 2015 to RM41,902 in 2023, according to data from the Statistics Department.
However, this remains below the 2023 national average of RM54,612 and significantly behind Kuala Lumpur at RM131,038 and Penang at RM72,586.
For context, Singapore’s GDP per capita in 2023 stood at S$113,779.
The JS-SEZ spans over 3,500 sq km – four times the size of Singapore.
It stretches across six districts in Johor, including Johor Baru, Iskandar Puteri, Pasir Gudang, Pontian, Kulai, and Kota Tinggi, covering areas from Kulai and parts of Pontian to Pengerang.
According to Johor officials, the JS-SEZ has the potential to generate 100,000 new jobs and contribute US$26bil annually to Malaysia’s economy over the next six years.
Johor’s GDP contribution in 2023 stood at US$37.6bil.
Economy Minister Rafizi Ramli once described the partnership as a “perfect match,” highlighting the synergy between Singapore’s sophistication and Malaysia’s cost and resource advantages.
