Study: 93% of S’porean traders are for tie-up, key challenges ahead
PETALING JAYA: Findings from a special report on the proposed Johor-Singapore Special Economic Zone (JS-SEZ) have revealed overwhelming interest among Singapore businesses in the project.However, it also identified challenges such as talent shortage and the need for improved cross-border movement.
According to the “Greater Together: Two Economies, One EcoSystem” report launched by the Singapore Business Federation, 93% of survey respondents viewed Johor as an attractive investment destination with 50% already operating in the state.
Some 160 Singaporean businesses across various industries were engaged for the survey.
JS-SEZ Singapore Business Working Group chairman Teo Siong Seng described the economic zone as a potential game changer for both countries.
He said the enthusiastic response clearly signals the zone’s immense potential for the region.
“This is about more than just closer integration. It’s about crafting an economic powerhouse that harnesses our complementary strengths on a sustainable basis.
“By bridging our economies, we’re creating new opportunities that will benefit businesses on both sides of the Causeway,” he said.
The report further identified three key success factors for the JS-SEZ.
This includes drawing on complementary economic strengths, steadfast commitment from both the Singapore and Malaysian governments and embracing experimentation and agility.
It said the SEZ should leverage Johor’s favourable operating costs and land availability as well as SIngapore’s strength in connectivity, branding, talent pool and headquarters functions.
“Target sectors include manufacturing, logistics, digital, industries, healthcare, education and more,” the report said.
It added that coordinated governmental frameworks with authority and autonomy are crucial to ensure tailored governance for businesses within the SEZ.
While enthusiasm towards the proposed SEZ is high, the report revealed several challenges, including a talent shortage.
It said nearly 60% of businesses in the survey reported difficulties in sourcing technical and skilled workers in Johor with additional issues in attracting Singaporean talent to work across the border.
“Furthermore, 60% of businesses linked the manpower crunch to employment pass issues and 58% cited issues with skill gaps in the Malaysian labour force while 21% noted salary mismatch as a factor,” it said.
To this, the Singapore Business Working Group (SBWG) proposed creating a labour system that leverages the strengths of both economies.
“The ecosystem would combine Singapore’s management as well as research and development capabilities with Johor’s technical skills for execution and operations supporting various industries,” according to the report.
It also highlighted the need for improved cross-border movement, citing how the Johor-Singapore land border crossings handle over 300,000 travellers daily.
It said 36% of survey respondents expressed hope for better connectivity in terms of a special immigration lane for people to facilitate smoother travel.
Here, the SBWG proposed streamlined customs and border clearance processes, including implementing a passport-free QR code clearance system and digitised cargo clearance.
It also proposed developing enhanced border crossing hubs with biometric automated clearance and investing in efficient multi-modal connectivity.
The upcoming Johor-Singapore Rapid Transit System Link slated for 2026 is also viewed as pivotal in addressing logistical challenges, according to the report, but it also pointed out challenges in the movement of goods between Singapore and Johor.
“55% of businesses in the survey cited difficulties in handling tax issues and 48% indicated that more expedient cargo clearance will be critical to enabling an efficient flow of goods,” it said.
To this, the SBWG recommended implementing streamlined customs and border clearance procedures, harmonising tax and tariff policies, developing integrated transport networks and logistics infrastructure and enhancing digitalisation and ecommerce enablement.
It added that streamlined processes are needed to realise the investment potential of the JS-SEZ.
“SBWG recommends several measures, including streamlining investment approvals and offering attractive tax incentives, developing robust legal and regulatory frameworks, providing comprehensive business facilitation services and enhancing the interoperability of financial systems,” it said.
