Brief Summary
The Johor-Singapore Special Economic Zone (JS-SEZ) is a new economic zone launched in January 2025, aiming to attract high-value investments and create jobs in Johor. While the government promotes it as a "gamechanger," experts express concerns that the JS-SEZ could disproportionately benefit Singapore, potentially leading to a loss of high-value industries and an imbalance of benefits for Malaysia.
- Experts warn of potential risks like debt traps and Singapore's influence on decision-making due to its funding of infrastructure projects.
- Concerns are raised about the potential for Singapore to control high-value processes and export products through its own ports, while Malaysia only benefits from low-cost manufacturing.
- The impact on affordable housing in Johor due to increased demand for luxury properties from Singapore is also a concern.
JS-SEZ: Potential Risks and Concerns
This chapter explores the potential risks and concerns surrounding the JS-SEZ, highlighting the possibility of Singapore gaining more benefits than Malaysia. Experts point out that while foreign direct investment brings economic opportunities, Malaysia faces risks such as a possible debt trap, loss of high-value industries, and an imbalance of benefits between the two countries.
Nazery Khalid, a maritime analyst, emphasizes the importance of infrastructure projects in the development of the JS-SEZ but warns that Malaysia's financing of these projects could lead to financial risks if not mitigated. He draws a parallel with the One Belt, One Road initiative, where several countries have incurred significant debt exposure. Nazery also expresses concern that Singapore's funding of certain projects could give it significant influence and greater say in decision-making, potentially compromising Malaysia's interests.
JS-SEZ: Concerns about Job Creation and High-Value Investments
This chapter focuses on concerns regarding the JS-SEZ's ability to create high-value investments and genuine job opportunities for Malaysians. Experts argue that the JS-SEZ's blueprint primarily benefits Singapore, with companies establishing low-cost manufacturing hubs in Malaysia due to cheaper resources.
Ibrahim Abdullah Zaik of the IRIS Institute points out that while Malaysia could collect tax revenue from the manufacturing sector, the actual revenue flows to Singapore, where high-value processes take place. He also warns of the strain that data centers in the JS-SEZ could put on Malaysia's energy and water supply.
JS-SEZ: Impact on Affordable Housing and Technology Transfer
This chapter examines the potential impact of the JS-SEZ on affordable housing in Johor and the challenges of technology transfer. Experts highlight the sharp increase in luxury properties in Johor, driven by demand from Singapore, which could lead to a shrinking stock of affordable housing and make home ownership increasingly difficult for low-income Malaysians.
Nazery also emphasizes the importance of safeguarding Malaysia's interests in technology transfer, arguing that it is naive to expect Singaporean companies to freely share patented technologies. He stresses the need for Malaysian government agencies to be closely involved in projects to ensure that Malaysia's interests are protected.
