Why Singaporeans Are Fleeing to Malaysia Every Weekend | AB Explained

0:00 All over the world right now, there's this heated debate about mass migration and border crossings. But did you know there is one international border, a single stretch of road, that almost nobody outside of Asia even knows exists? I genuinely had no idea until our local sources tipped us off recently. That crossing is called the Johor-Singapore Causeway, barely two-thirds of a mile long, Just over a kilometer, it connects Singapore to Johor Bahru, the capital city of Malaysia's southern state of Johor. It's actually one of only two land crossings connecting Singapore and Malaysia. Get this, over 300,000 people cross this border every single day. I don't know about you,

0:45 but that number sounds so big it's hard for me to even wrap my head around. To put it in perspective, San Isidro, the busiest entry point on the entire US-Mexico border, handles roughly 180,000 people daily going both directions. This place moves nearly double that. Every single day. And that's just the average. During school holidays, the number regularly pushes past 400,000. And on the single busiest day ever recorded — Good Friday 2024 — the number hit 510,000 people in a single day. So who are all these people crossing between Singapore and Malaysia, and what's leading to this kind of mass migration, the portion of which locals are referring to as "weekend refugees"?

1:33 Once you understand what's actually going on, you might never look at your own city, your own cost of living, or your own government's policy the same way again. The way I see it, this is an economic canary in a coal mine because the same thing is happening all over the world. Before we dive in, whether or not you're planning on visiting Asian countries like Singapore or Malaysia, how you manage your money at home as well as on the road is increasingly becoming more important. Makes sense, right? Because the economy is only getting tighter and you need every financial edge you can get. That's why we partnered with our sponsor, Revolut, to offer you some real financial value. Revolut is the all-in-one financial app that we actually use ourselves, and over 70 million people worldwide use it every day.

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3:52 Let's get back to the deep dive. Okay, imagine this scenario. It's 5am on a weekday and your alarm goes off. You need to get up and get ready for work. Now, why wake up at 5 AM? It's way too early for most people, right? Fair enough, except your office is only about 10 miles away, roughly 16 kilometers. In theory, you should easily be able to drive there in under 20 minutes. Except you're not budgeting 20 minutes. You're budgeting 3 hours. One way. And the commute back home? Potentially worse, maybe 4 hours. So on a regular day, you're spending 6 to 7 hours of your life just sitting in a car.

4:38 Just to get to work and back, all because you're not commuting across a city. You're crossing an international border from Malaysia into Singapore just to go to work every day. You're a migrant worker, like literally. Now let's imagine another scenario. It's finally the weekend. It's Saturday morning, and instead of sleeping in, your alarm goes off at 7am. You want to sleep in a bit, but you've got errands to run. A haircut, a dentist appointment. Groceries. So you get ready, get into your car, and budget about 6 to 7 hours of driving time just to be able to do those things. But why? You live in Singapore, one of the smallest countries on Earth, so everything should be within striking distance.

5:24 In fact, you shouldn't even have to drive because Singapore has a world-class public transport system. Any of those errands on a normal day shouldn't take more than 3 hours tops. Except here's the thing. Instead of spending money locally, you decide to drive to Malaysia. So you sit in a 2-3 hour line at the border, cross into Malaysia, do all your errands there, and then sit in another massive line for another 3-4 hours to come back home. You're one of the growing number of weekend refugees in Singapore and one of tens of thousands of Singaporeans crossing into Malaysia to spend money every single day. And at the heart of all of this, for both the Malaysians crossing into Singapore for work and the Singaporeans crossing

6:10 into Malaysia to spend money, is the Johor-Singapore Causeway. Now, in case you're not familiar with the word, a causeway is essentially a raised road built across a body of water. So it's not a bridge. And this particular causeway has one of the most fascinating and surprising origin stories of any piece of infrastructure in Asia. Let's rewind to the late 1800s. At that time, Singapore and the Malay Peninsula were both under British control. Not exactly one unified territory, Singapore was ruled directly by the British while the Malay states still had their own local rulers or sultans as they were called. But for all practical purposes, they functioned as one connected economic system.

6:56 Singapore was an island sitting just off the southern tip of the peninsula. But here's the thing. There was no bridge, no causeway, no land connection of any kind. The only way between Singapore and the mainland was by boat. But Singapore was the crown jewel for the British. Why? Because right underneath Singapore is the Singapore Strait. A strait is this narrow waterway that ships have to pass through. The Singapore Strait is basically a maritime highway. Around 2,000 merchant ships pass through it every single day. And together with the Strait of Malacca just to the west, this corridor carries roughly 25% of all the world's traded goods, including oil, manufactured products, coal, and raw materials.

7:44 Basically, every single ship moving between Europe, to the Middle East, India, and East Asia had to pass through the Singapore Strait. So whoever controlled Singapore effectively controlled the flow of global trade between East and West. And the British knew exactly what they had. They turned Singapore into a super strategically positioned trading port and one of the busiest commercial hubs in all of Asia. And Johor, the state directly to the north of Singapore, was rich in rubber and tin. Two of the most valuable commodities in the world at the time. The problem was getting those commodities from Johor down to Singapore's port because despite being practically neighbors, Singapore and the Malay Peninsula are separated by a narrow body of water

8:30 called the Strait of Johor. Now I know I'm throwing a lot of straits at you, but stay with me. The Singapore Strait is underneath Singapore and flows west into the Strait of Malacca. The Strait of Johor sits above Singapore, between Malaysia and Singapore. So in the late 1800s, the only way across the Strait of Johor was by ferry. For passengers, small boats shuttling people back and forth all day. For cargo, large flatboats hauling goods across the water. It worked for a while, but by the early 1900s, the volume of trade had exploded. By 1917, Roughly 54,000 loads of goods were being ferried across the strait every single year, up from just 11,000 6 years earlier.

9:17 The system was at a breaking point, so the British colonial administration started asking, "Hey, what if we just connected the Malay Peninsula and Singapore?" But the main question was how to build it. They thought about building a conventional bridge but ditched the idea because the Strait of Johor is deceptively deep in places, going down to about 70 feet or roughly 21 meters at certain points. Building bridge foundations in those conditions with the technology available in 1919 would have been super expensive and technically questionable. So the engineers came up with a different solution that seemed— rather simple. Instead of building a bridge over the water, they decided to just fill in the water. Literally. They proposed dumping millions of tons of rock and granite rubble

10:06 directly into the Strait of Johor. Now, where do you get millions of tons of granite in Singapore? As it turns out, Singapore sits on some incredibly rich granite deposits. The hills at Bukit Timah in the center of the island and the nearby island of Pulau Ubin were essentially giant natural quarries. So here's what they did. Over the course of 5 years, over 2,000 workers blasted the rock out of the hillsides on the Singapore side, broke it into rubble, loaded onto large flatboats and transported across the water to the Johor side where construction had begun. Then they tipped those boats, dumping hundreds of tons of broken rock directly into the sea. And then they came back and did it again. And again. And again.

10:52 More than 1.5 million cubic yards or roughly 1.15 million cubic meters of granite slowly piled up on the seabed until the water disappeared, and a road emerged in its place. But in case you're thinking, surely it cannot be that easy to build a causeway, just dump rocks? Yes, this wasn't just random dumping of rocks into the sea. Before a single rock hit the water, the engineers had spent 2 years studying the tidal patterns of the Strait of Johor, and what they discovered was alarming. Once you fill in the strait, you essentially split it into 2 complete separate bodies of water with different tidal rhythms on each side. That could create dangerous currents, structural damage, and a complete blockage

11:37 of natural water flow through the strait forever. So they built 3 separate systems directly into the structure to deal with this. First, near the Johor end, they left a deliberate gap in the rocks— a 170-foot opening— and over that gap they installed an electrically operated drawbridge. A 570-ton mechanical structure sitting on top of the causeway that could be raised to let small ships pass underneath. And then lowered again to restore the road and railway on top. Think of it like a drawbridge on a castle, except it's carrying a road and railway tracks. Raising it takes about 8.5 minutes. Second, built into the same gab was a system of double floodgates to regulate the tidal flow between the two sides of the causeway

12:23 and prevent dangerous water pressure from building up. And third, 10 underground tunnels were built into the base of the causeway itself. Running from one side of the strait to the other, to keep water circulating naturally and prevent pollution from accumulating in the enclosed water on either side. You can see how this would have been quite an engineering marvel, right? All of it built by hand in tropical heat. The project was completed and officially opened on June 28th, 1924, and the total cost came to 17 million Straits dollars, which is equivalent to roughly $1.6 billion in today's terms. That was more than half of the entire annual government budget of the territory, and at the time of its completion, this was described as one of the greatest

13:10 engineering achievements in the entire Far East. By the way, if you are a Singaporean watching this video, you might go, "Wait, I have driven past the causeway, and it looks nothing like how you described." You are absolutely right, because almost none of that original engineering structure exists today. Here's what happened. During World War II, in late 1941, Japan launched a devastating military campaign sweeping down the Malay Peninsula. By January 1942, Japanese forces had pushed all the way to the southern tip of Malaysia, right to the edge of the Strait of Johor. Japan wanted Singapore because it was the most important British military and commercial base in Asia. So, in a desperate last-ditch attempt to slow down the advance,

13:57 the retreating British forces made a decision to destroy the causeway. On January 31, 1942, after the last Allied troops had crossed back into Singapore, British engineers set off explosions to destroy the drawbridge and lock channel, as well as blow a 70-foot or 21-meter gap in the causeway itself. It didn't work. The Japanese crossed the Strait of Johor anyway by using small boats under cover of darkness on the night of February 8th, 1942. Within days, they had repaired the gap in the causeway themselves and were using it to bring in tanks and heavy equipment. On February 15th, 1942, just 2 weeks after the British blew up their own bridge,

14:43 Lieutenant General Arthur Percival surrendered Singapore to the Japanese. It was the largest surrender in British military history— 85,000 Allied troops laying down their arms to a Japanese force of just 35,000. But the story doesn't end there. The British returned after World War II and rebuilt the road and railway across the Causeway in 1946. Except this time, there was no restoration of the drawbridge, the lock channel, or any of the original water management systems. Then during a widening project in 1975, 4 of the 10 underground water tunnels were damaged and never repaired. More were lost in subsequent construction. Today, not a single one of those original systems functions.

15:30 And there is a real-life consequence to that. The natural water flow through the Strait of Johor has been blocked and disrupted for decades. Pollutants— I am talking about industrial waste, sewage, debris— have been gradually building up on both sides with nowhere decades ago. In 2006, Malaysian authorities declared parts of the strait a health hazard because of it. Singapore pushed back, arguing that pollution came from Malaysian industrial areas and rivers on the Johor side, not from the blocked water flow. The dispute was never fully resolved. Either way, just remember, the road that 300,000 people drive across every single day is the partially degraded remains of what was once one of the most sophisticated pieces of infrastructure ever built

16:17 in this part of the world. But now that you know the origin of the Causeway, how do you explain the sheer number of people that cross it? Because unlike the times when the Causeway was built, Singapore and Malaysia are not even the same country anymore, and I'm sure the original intention of the Causeway wasn't to facilitate mass migration. Let's take a look. Okay, so now we know how the Causeway came to be. But why are 300,000 people crossing it every single day? Let's start with the Malaysians crossing into Singapore for work. The first advantage is wages. Singapore's average monthly salary is 4 to 6 times higher than Malaysia's.

17:03 A cleaner, a construction worker, someone working the line at a food court— they earn significantly more in Singapore dollars doing exactly the same work they could do back home. For example, Malaysia's minimum wage is 1,700 Ringgit or about $488 US dollars a month. A full-time cleaner doing the exact same work in Singapore earns up to S$2,325 or roughly $1,800 US dollars a month according to Singapore's own Ministry of Manpower. That's more than 4 times the Malaysian minimum wage. For mopping floors. In fact, in 2025, a job posting for a cleaning specialist role in Singapore went viral in Malaysian social media.

17:49 The salary being offered was up to S$4,000 or roughly $3,000 US dollars a month. Malaysians in the comments called it heaven-sent, and honestly, it makes me wonder if I should be working as a cleaner in Singapore. Anyway, Another thing that makes Singapore so attractive for Malaysians is that they enjoy a special status in Singapore's labor market that workers from most other countries don't have. Unlike workers from Bangladesh, India, or Myanmar who face strict limits on how long they can stay, Malaysians can work in Singapore indefinitely with no maximum employment period. Singapore essentially treats Malaysian workers as a permanent reliable labor supply

18:35 for the sectors that locals don't want to fill. Construction, cleaning, F&B, security, manufacturing, you name it. There's actually a term for this category of work that's well known across Southeast Asia... 3D jobs. Dirty, dangerous, and demanding. And this is exactly where Malaysian workers come in. Because young Singaporeans themselves will absolutely not take these jobs. Why would they? They went through a super competitive education system and went to a world-class university. Of course they expect a desk job with an air conditioner and a solid career path, right? By the way, this should sound familiar to you because this is basically the story of every developed economy on Earth.

19:20 And it's that structural gap—jobs that need to be filled but that locals won't take — that's exactly what the Causeway supplies to Singapore every single morning. But if that wasn't good enough for Malaysian workers in Singapore, it gets better. The second advantage kicks in the moment they get paid. Because every Singapore dollar they earn gets converted back to Malaysian ringgit when they go home. And right now, 1 Singapore dollar buys roughly 3.5 Ringgit. So that higher Singapore salary gets multiplied again the moment it crosses the border. Now, let's flip it around, because on weekends, Singaporeans pour into Malaysia in numbers that are pretty staggering. In just the first seven months of 2025, Singaporeans made 11 million visits to Johor alone,

20:09 spending an estimated S$1 billion there. Between 2022 and 2024, Singaporean spending in Johor was growing at 40% per year. But what are they spending their money on? Mostly food, actually. Dining makes up about 15% of all spending. Then groceries. Then clothes. Basically everything Singaporeans could be doing at home. It's just that things are much cheaper in Malaysia. How much cheaper? The cost of maintaining the same standard of living in Johor Bahru runs about 73% less than in Singapore. Simply put, both groups — the Malaysian workers and the Singaporean weekend refugees—are responding to the same massive financial gap

20:55 between two neighboring countries that share a border. So where does that gap actually come from? By international standards, Malaysia is still classified as a developing country. According to the World Bank, its GDP per capita in 2024 was around $11,874 USD, ranking 79th in the world. Compare that to Singapore's GDP per capita of $90,674 USD, ranking 7th in the world. That's nearly an 8-to-1 gap. There are many reasons for this economic gap. Singapore, under the leadership of Lee Kuan Yew, essentially turbocharged its economy from scratch after independence in 1965 — rooting out corruption, attracting foreign investment

21:43 and building world-class institutions. We did a whole deep dive on that already, so check it out after this video. But putting all the history, leadership, and political stuff aside, the price gap between Singapore and Malaysia isn't just the result of two economies at different stages of development. It's actually maintained and in some ways deliberately engineered by two central banks making completely rational but different decisions for their own countries. Let me try to break down how these two central banks differ. First of all, every country has a central bank, right? It's the government's bank. In the US, it's the Federal Reserve. In Singapore, it's the Monetary Authority of Singapore, or MAS. In Malaysia, it's Bank Negara Malaysia, or BNM,

22:31 which literally translates to ”National Bank of Malaysia“. These are the institutions responsible for keeping the economy stable, making sure prices don't spiral out of control, and managing how much the country's currency is worth. And most central banks around the world use this one basic tool to achieve those goals. Interest rates. Now, whenever you hear the so-called experts on TV talking about interest rates, it just sounds super confusing what it actually does to the economy. I'm one of them, okay? So through our own research, this is how I make sense of it, and I hope this makes sense for you as well. When you borrow money from a bank, whether it be for a house, a car, or a business, the bank charges you interest, right? That interest rate is influenced by the central bank's official rate.

23:20 Think of it like a bakery. The central bank sets the wholesale price of money. Your local bank borrows at that price and lends to you at a markup. So when the central bank raises its rate, your bank's costs go up. And like any business, it passes the cost on to you. Your mortgage gets more expensive. Your car loan gets more expensive unless you lock in a fixed rate in advance. So when the central bank raises its official rate, borrowing becomes more expensive across the whole economy. People take out fewer loans, they spend less, businesses invest less. Conversely, when the central bank cuts its rate, borrowing becomes cheaper, people spend more, businesses expand,

24:06 and so on and so forth. Does that make sense? But why would the central bank raise or cut the official rate in the first place? Let's say the economy is doing fantastic. Growth is strong, employment is high, people have money and they're really spending it. Almost too much money chasing too few goods, let's say. Can't remember the last time things were that good, but anyway. If things are going almost too well, prices start rising too fast, because demand is outrunning supply. The economy is overheating, basically. In that case, the central bank steps in to pump the brakes, by raising the official interest rate. This is typically done in small increments of 25 basis points, which is just 0.25%. Now, in the opposite scenario,

24:52 if the economy is struggling, the central bank cuts rates to make borrowing cheaper, and get people spending again. In economics, this whole toolkit of raising and cutting rates is called monetary policy, and this decision is made by the central bank of a country. So here is a question for you: What should a central bank do in the current economic climate? The global economy is doing real bad with almost zero growth. Companies are laying people off left and right, and yet inflation is crazy high and prices won't come down. So it's not the good kind of inflation that comes from an overheating economy. Actually, it came largely from governments printing. That's right, literally printing— massive amounts of money, and pumping trillions into their economies during COVID,

25:40 just to keep things alive. So in this case, Should a central bank cut its rate or raise it? Economists actually have a term for this specific scenario. It's called stagflation —stagnant growth plus inflation and it's the central bank's worst nightmare, because the two problems require opposite solutions. Cut rates to stimulate growth and you risk making inflation worse. Raise rates to fight inflation as you would normally do, and you make the weak economy even weaker. If a central bank just looked at the high inflation and raised rates, without understanding the full context, it could end up destroying an already fragile economy even further. This is the tightrope that central banks around the world are walking right now,

26:28 including Malaysia's central bank, BNM. BNM's version of the official rate is called the Overnight Policy Rate, or OPR. Currently, it sits at 2.75%, and they are expected to potentially cut a further 25 basis points to 2.5%, in the first half of 2026, depending on how global trade conditions evolve. This is basically them acknowledging, "Yeah, we get how bad economy is, so we are doing our best to stimulate growth." Now, Singapore does something completely different from Malaysia. Singapore's central bank MAS does not use interest rates as its main tool. It doesn't really control interest rates at all. Instead, it uses the exchange rate. Hmm interesting.

27:14 But it makes sense when you think about it. Singapore is a tiny island with basically no natural resources. It cannot produce its own energy nor manufacture everything it needs, so it imports almost everything. Food, fuel, raw materials, consumer goods. In fact, out of every single dollar that Singaporeans spend domestically, about 40 cents goes towards imports. And Singapore's total trade is more than 3 times the size of its entire economy. That's a lot. For the average country, trade is about 50-60% of GDP. For Singapore, it's over 300%. No other major economy on earth is that dependent on trade. So if your currency gets weaker,

28:00 everything you import gets more expensive overnight as well, right? Your grocery bill goes up, your electricity bill goes up. This is why the exchange rate is a far more powerful tool for Singapore, than interest rates. And how Singapore's MAS manages this is through something called the S$NEER. S$NEER stands for Singapore Dollar Nominal Effective Exchange Rate. And it's basically the Singapore dollar's average strength, against all its trading partners' currencies combined. So the Singapore dollar is tracked against a whole basket of currencies, including the US dollar, the euro, the Japanese Yen, the Chinese Yuan, and the Malaysian Ringgit. MAS then sets the upper and lower limits —like a band

28:46 —within which the Singapore dollar is allowed to move based on market forces. If the Singapore dollar drifts too low and hits that floor, MAS steps in and buys Singapore dollars to push it back up. If it drifts too high towards the ceiling, they sell Singapore dollars, to bring it back down. They are essentially managing their own exchange rate within a defined range. By the way, other countries like China, also control their exchange rate this way to varying degrees, but Singapore does it very openly and transparently. With the explicit goal of controlling inflation. China does it too, but it's less transparent about it, and it has historically been accused by the West, of keeping its currency artificially weak, to make Chinese exports cheaper.

29:32 Let me give you an example of how this exchange rate control works. Singapore imports about a third of its chicken from Malaysia. Let's say the Malaysian chicken farmer raises his price by 10%. Because his own costs went up. Under normal circumstances, that 10% increase lands directly on Singapore's supermarket shelves. But if at the same time, the MAS manages the Singapore dollar to strengthen by 10% against the Ringgit, the price increase cancels out, right? The stronger currency absorbed the inflation, and the chicken costs exactly the same in Singapore dollars as it did before. That's the mechanism. So here is the consequence of Malaysia using interest rates, as a tool to control inflation,

30:18 and Singapore using the exchange rate as a tool to control inflation. When global economic conditions get tough, the Malaysian Ringgit weakens. In early 2024, the Ringgit hit its weakest level against the US dollar since the 1998 Asian financial crisis. At the same time, the Singapore dollar stays where it is because their central bank actively manages it within acceptable band. So every time the Ringgit weakens against the Singapore dollar, the price gap across the causeway gets wider and wider. To put it in historical perspective, back in the 1990s, 1 Singapore dollar bought you roughly 1.5 to 2 Malaysian Ringgit. Today, it buys you around 3.1 to 3.5 depending on the day.

31:04 That gap has more than doubled in 30 years. And every time it widens, more Singaporeans find it worth their while, to sit in the 3-hour line at the Causeway. At this point, you might be getting the impression, that Singapore's way of managing inflation, through controlled exchange rates, is fundamentally better than Malaysia's traditional monetary policy, of adjusting interest rates. But it's not that simple. Both ways have pros and cons that require specific context and conditions. Here's a perfect example. Singapore's cost of living still skyrocketed during COVID, compared to Malaysia. Why? Because in theory, their managed exchange rate should have absorbed the inflationary pressure, right? Well, it did, but only for the roughly 40% of spending that goes towards imports.

31:54 It did absolutely nothing for the other 60%—the domestic goods and services. Rent, food, haircuts, construction labor. Those prices are set domestically in Singapore, and no exchange rate adjustment can touch them. And during COVID, those domestic prices went completely out of control. With a flood of foreign professionals moving to Singapore as a regional hub, demand for housing exploded while supply was frozen. Private residential rents surged nearly 30% in 2022 alone. Overall inflation went from basically zero to 7.5% between 2020 and 2022. On top of that, Singapore's government raised its equivalent of value-added tax, called Goods and Services Tax or GST,

32:42 adding further pressure on everyday spending. In 2022 and 2023, Singapore reclaimed its position as the most expensive city on earth. What about Malaysia? Well, Malaysia's prices barely moved. Because it turns out Malaysia doesn't import stuff as much as Singapore does. They produce their own stuff and they didn't have the same housing demand shock. So when the border reopened after COVID in April 2022, Singaporeans crossed back into Johor Bahru, and discovered that the gap they remembered, had grown dramatically wider while they were locked out. The services they used to get for a fraction of the Singapore price, were even now cheaper in relative terms. So it's hard to say in absolute terms, which policy of handling inflation is better.

33:29 Because the two countries are very different. The point is, while most locals might have been aware, that there is this financial gap or arbitrage to exploit, they might not have understood the underlying cause of the gap. Hopefully now you have some ideas. That being said, Can you see how this could lead to some very serious side effects? I mean, what could possibly go wrong, when 300,000 people are crossing an international border, for financial reasons every day. Look, I would only be telling you half the story, if I just left things at Singaporeans crossing into Malaysia, just to get haircuts and groceries. The biggest question I had looking into this was:

34:15 Are both the Malaysian and Singaporean governments aware of what's happening? The obvious answer is yes. It appears so, because there are even websites like CausewayTraffic.sg built specifically just to track the live traffic, at this one border crossing in real time. So if both governments are aware of what's going on, what are they doing about it? Because when there's that much movement of people taking place, there are bound to be some repercussions and unintended consequences. One is crime. Among locals, Johor Bahru or JB has a bit of a reputation. If you ask any Singaporean who crosses the causeway regularly, they'll tell you not to leave anything valuable in your car,

35:01 because it might get broken into. A Singapore-registered car in a JB parking lot, is an immediate signal, because there could be Singaporean dollars inside the car. There is also petty crime, especially in areas further from the city center. Like bag snatching. JB's crime index is roughly double Singapore's. To be fair, given that Singapore is one of the safest cities on earth, that double crime index, doesn't make JB super dangerous by global measures. But it is noticeably different from what Singaporeans are used to back home. But petty theft is just really the surface. Because once you look past the car break-ins and bag snatching, you start seeing a whole other economy operating in the gray zone, of that border crossing.

35:47 And it starts with cigarettes. A pack of cigarettes costs roughly 15 ringgit in Malaysia, which is about $3.40. The exact same pack in Singapore costs around 16 Singapore dollars, roughly $12, nearly 4 times the price. Singapore has zero duty-free allowance for cigarettes, which means every single pack is subject to tax the moment it crosses the border. So bringing cigarettes across without declaring them is technically smuggling. And naturally, people try anyway. Cigarettes stuffed into door panels, cartons hidden under seats— it's been happening for years. As recently as April 2026, a former security officer at Tuas Checkpoint— the second land crossing between Singapore and Malaysia,

36:35 was convicted in Singapore for facilitating— get this, 26 separate cigarette smuggling operations, taking bribes to let shipments through. He was sentenced to 17 months in jail. And the bribes that made all of this happen? Roughly $1,230. That's how cheap it was to compromise Singapore's border security. For cigarettes. But the more interesting story is vapes. Singapore banned vapes entirely in 2018, citing health concerns for young Singaporeans. In fact, as of August 2025, the Prime Minister of Singapore announced that vaping, would be treated not as a tobacco issue but as a drug offense with criminal penalties to match. What's interesting is that cigarettes are not banned in Singapore,

37:24 though one could argue that they cause way more damage to your health. But anyway, Singapore drew the line on vapes before a new generation got hooked. Malaysia has not followed suit, so you can walk into almost any store in JB and buy a vape openly. And because vapes sell for up to 3 times their Malaysian price, on Singapore's black market, the profit margin for smuggling them across the causeway is enormous. Between January 2024 and March 2025 alone, Singapore authorities seized S$41 million worth of vapes. That's roughly $30 million. Here is where it gets darker. Because what started out as individuals stuffing a few vapes in their bags, has evolved into something much more organized.

38:11 Crime syndicates in JB have figured it out that the easiest way to move product across the causeway, is to recruit young unemployed men on both sides of the border, paying them roughly $230 to over $1,000 per trip, to carry packages they are told contain harmless goods. In 2025 alone, Singapore detected 57,400 cases, of illegal goods being smuggled across the border, a 30.6% increase from the year before. And Malaysia's own health ministry revealed, that 65.6% of vape liquids seized in 2023 and 2024, contained dangerous drugs. So what appears on the surface, to be petty smuggling of cigarettes and vapes,

38:57 is really highlighting the deeper issue, that Singapore is most serious about— drugs. Most of you might have heard that Singapore has some of the harshest drug-related laws on earth. Trafficking above certain quantities carries a mandatory death penalty. No exceptions. And the Causeway has been a drug pipeline into Singapore for decades. The direction of this flow is almost entirely one way— from Malaysia into Singapore. And it's why every car entering or re-entering Singapore at Woodlands Checkpoint, gets inspected with a level of scrutiny, that would feel extreme anywhere else in the world. Suddenly, the 3-hour wait at the Causeway to get back into Singapore, makes a lot more sense, doesn't it?

39:44 By the way, while we're at it, there is this one specific rule that every single Singaporean who drives to JB knows by heart. Before you even leave Singapore, your gas tank must be at least three-quarters full. This is Singapore's own rule enforced at the checkpoint on the way out. If your tank is below that threshold, you get turned around. The reason is that Malaysian gas is heavily subsidized, and significantly cheaper than Singapore's. Without this rule, every Singaporean would just drive into Malaysia on empty, fill up entirely on cheap subsidized Malaysian gas while they are there, and drive home. So Singapore mandates that you leave with a nearly full tank, meaning you have already paid Singapore prices before you cross.

40:31 It's a small rule that perfectly illustrates the entire dynamic of this border. And then there is the issue that is perhaps causing the most friction of all— Property. It turns out, a lot of Singaporeans aren't just crossing the causeway, for haircuts and groceries anymore. They are buying homes in JB. And the scale of it is pretty noticeable. Singaporean demand for Johor real estate has tripled since 2019. And they are paying 20-30% premiums above what local buyers pay for the same units. Because even at such a premium, a JB condo is still a fraction of what the same money buys in Singapore. So when Singaporeans flood a property market with Singapore dollars, they lift prices for everybody, including local Malaysians

41:19 who earn Malaysian Ringgit. A young Malaysian professional earning RM3,000 a month, is now competing for housing with Singaporean buyers, who earn 3 to 4 times that in a stronger currency. The math just doesn't work for locals. Even studio apartment rentals nearly doubled in just 2 years. Among some Johoreans, there's what you'd call a zero-sum feeling. Every condo snapped up by a Singaporean investor, is one less affordable option for a Malaysian family. Entry-level condos in the city center are increasingly out of reach, for first-time Malaysian buyers. And the Malaysian government has noticed. As of January 2026, Malaysia doubled the stamp duty, which is a property tax,

42:05 on foreign residential property purchases from 4% to 8%. That is a government pumping the brakes, before its own citizens get priced out of their own city. But even then, it might not matter so much. Like I said, JB property is still a fraction of equivalent Singapore property, and the gap is just too big. So if this continues, if JB keeps getting more expensive, at some point, the financial arbitrage that drives the whole weekend refugee phenomenon, starts to disappear. And then what? That question is exactly what both the Malaysian and Singapore governments are trying to answer. And they have a plan. Two plans, actually. One is a train. The other is an entire economic zone. So let's briefly go through each of them.

42:52 First, there is the RTS Link, which stands for Rapid Transit System Link. It's a 4-kilometer or roughly 2.5-mile rail connection being built, between Bukit Chagar Station in JB, and Woodlands North Station in Singapore. And the train journey from one side to the other will just take 6 minutes. As for the immigration processing, they will have AI-powered e-gates installed at each gate, will be able to process a traveler in about 7 seconds. That doesn't even feel like an international border anymore, does it? By the way, this isn't just some hypothetical plan. As of April 2026, structural works on both stations are largely completed, with actual operations targeted for January 2027. At launch, it is projected to carry around 40,000 passengers a day,

43:41 eventually rising to 140,000 daily in the long term. But the RTS Link is only one half of what both governments are building. On January 7, 2025, Malaysia and Singapore signed an agreement formally establishing, the Johor-Singapore Special Economic Zone, called the JS-SEZ. It covers over 3,500 square kilometers —that's roughly 1,350 square miles. Across 9 designated zones in southern Johor, more than 4 times the size of Singapore itself. They actually modeled this zone after China's Shenzhen Special Economic Zone, which transformed Shenzhen from a fishing village into China's Silicon Valley,

44:27 in under 40 years. So while the Special Economic Zone is physically located in Malaysia, and governed by Malaysian laws, both governments jointly administer it through a set of harmonized rules, with incentives designed to attract global companies. Examples? How about a 5% corporate tax rate for qualifying businesses in sectors, like AI and advanced manufacturing. A flat personal income tax rate of 15%, for skilled workers like engineers and developers? In its first year alone, the Special Economic Zone secured the equivalent, of $17.3 billion US dollars in investment. But in the end, what does all this mean for the working-class people of Johor? The Special Economic Zone will create 20,000 skilled jobs over 10 years.

45:16 But Johor has millions of residents. And the forces being unleashed here —fast crossing times, more Singaporean spending power flooding in, higher property values —those forces will naturally trickle down to the working-class Johoreans, trying to afford a home in the city they grew up in. The weekend refugee phenomenon started, because ordinary Singaporeans found the pressure valve for a cost-of-living crisis their own government couldn't fully solve. The influx of ultra-wealthy foreigners into Singapore, made life unaffordable for regular working-class Singaporeans, who started crossing the Causeway to escape it. And now, those same Singaporeans with their stronger currency, and higher purchasing power,

46:02 are doing to Johor's working class exactly what was done to them. It's ironic, isn't it? Now, both governments are formalizing that escape route, and building infrastructure around it, attracting global capital to it. But where do ordinary Johoreans go, when their own city becomes too expensive for them? And if they cannot go anywhere, what does that mean for the wealth gap, and the social tensions that may follow? Look, in our video, we always try to tie everything back to what things mean for the working class, not because we're some anti-capitalism crusaders. I'm a founder myself, and I'm all for entrepreneurship and building wealth. The world genuinely needs more innovators, more builders, more problem solvers,

46:49 that need to be rewarded according to the value they create. But we are seeing the disappearance of the working class all over the world, at a rate that's alarming. And I'm genuinely not sure that's sustainable for a functioning society. The Causeway has always been the bridge between two very different worlds. Let's just hope that whoever is building on top of it, doesn't forget about the people crossing it every day. If you found this video insightful and feel like you learned something, the only thing that I would ask is that you subscribe to Asian Boss, and turn on the notification bell. Because the YouTube algorithm tends to prioritize more recent, entertainment-focused content, you might not see our new videos when we upload, even if you are a regular viewer of ours.

47:36 We put a lot of time and effort into our research and storytelling, even though we might not get everything right. That's why we take our time. But if we don't get strong viewership within the first day or so after uploading, the algorithm assumes people aren't interested, and starts prioritizing other videos instead. Which is ironic because the reason people don't watch right away, is that they don't even know the video is out. So yeah, if you feel like we're delivering value, please turn on the notification bell. We're not here to waste your time with entertainment. We want to build a real community of educated and culturally curious people, who can help power the content we create, so that we can be the go-to source for authentic, non-political news and insights on all things Asia.

48:22 And together, I really believe we can cut through the mainstream media noise. I hope you do as well. Of course, I am Stephen Park. Thank you for watching all the way till the end. And as always, stay curious.