RECENTLY, a major cooperation project between Malaysia and Singapore has made significant progress.
Reports indicate that both countries aim to finalise the agreement for the construction of the Johor-Singapore Cross-Border Special Economic Zone (referred to as the Johor-Singapore Special Economic Zone) in Johor, Malaysia, by the end of this year.
This initiative seeks to create a “Shenzhen-style super hub.”
As early as October last year, Malaysia and Singapore announced plans to implement special tax arrangements, bonded warehouses, and other measures to facilitate the cross-border movement of goods and people in the Johor Baru Special Economic Zone.
The special zone, covering 3,505 sq km, will focus on developing 16 economic sectors, including the digital economy, financial and commercial services, energy, aviation, special chemicals, creative industries, and manufacturing.
Officials expect the zone to create 100,000 jobs in Johor and generate US$26bil annually by 2030.
Politically, this project is the most important cooperation initiative between the newly established governments of Malaysia and Singapore.
The unity government was established in November 2022, while Singapore’s Lawrence Wong government took office in May this year.
Both administrations have worked hard to ensure stable governance.
His Majesty Sultan Ibrahim, the King of Malaysia, is also from Johor.
His support, alongside that of Prime Minister Datuk Seti Anwar Ibrahim, has created a stable political environment conducive to rapid development and stronger Malaysia-Singapore cooperation.
Geographically, the Johor-Singapore Special Economic Zone is strategically located at the southern tip of the peninsula, bordering Singapore.
Malaysia has been keen on developing digital industry-related businesses and large-scale data centres on the peninsula.
This initiative follows a broader strategy of establishing special economic zones with neighbouring countries, although similar projects with Thailand, Indonesia, and the Philippines have faced various challenges.
The “dam-separated” proximity of Johor and Singapore makes the location ideal for such an economic zone, solving Singapore’s severe land shortage issue and creating mutual benefits.
The Johor-Singapore Special Economic Zone symbolises inherited and ongoing cooperation between Malaysia and Singapore.
While public opinion in both countries is mixed due to past failed projects like the Kuala Lumpur-Singapore High Speed Rail and historical disputes, there remains significant anticipation for the special zone’s prospects.
The initiative aims to overcome these doubts and challenges, fostering deeper cooperation.
The Johor-Singapore Special Economic Zone aspires to be the “Shenzhen of South-East Asia.”
In March, Johor Mentri Besar Datuk Onn Hafiz Ghazi visited Shenzhen to learn about the “Shenzhen-Hong Kong” model.
He identified four factors essential for success: central and local government support, an environment of reform and opening up, foreign investment, and innovation competitiveness.
Blueprint for success
Given Johor and Singapore’s frequent exchanges, this model offers a blueprint for success.
China’s support extends beyond providing a model.
Chinese companies and the China-Malaysia “Two Countries, Two Parks Cooperation” framework are also contributing to Johor’s development.
Future cooperation experiences between China, Malaysia, and Singapore will add valuable insights to the Johor-Singapore Special Economic Zone, potentially involving other regional countries.
On a geopolitical level, Anwar has underscored the importance of strengthening ties with China while maintaining neutrality.
Anwar has publicly criticised the United States for its divisive tactics, affirming that Malaysia will not be swayed to challenge China.
Malaysia and Singapore share similar populations, cultures, and customs, fostering close relations.If successful, the Johor-Singapore Special Economic Zone could become a model for development in ethnically and culturally diverse South-East Asia.
Its success will depend on factors such as infrastructure, special tax and financial systems, cargo clearance efficiency, and cross-border personnel flow.
The potential of this zone to accelerate regional cooperation and deepen relationships in South-East Asia is indeed promising.
Zhong Darong is from the Research Centre for Malaysia in HuaQiao University. The views expressed are the writer’s own.
