Johor-Singapore SEZ: Businesses say Malaysia’s “tougher” government has boosted their confidence in projects, but brain drain remains a risk

Singapore Manufacturers Federation president Lennon Tan told CNA that he hoped the SEZ would not follow the same path as the SIJORI Growth Triangle and Iskandar Malaysia projects, thanks to the active involvement of government officials this time.

“There’s been more private sector consultation and more industry consultation, both for the government and for both sides,” Mr Chan said.

He added: “Senior government officials from both sides are doing their utmost to support and promote the SEZ plan, so we have reason to believe that the plan will bear fruit.”

Mr Tan, head of data security firm Adera Global, told CNA that the timing of Singapore’s SEZ proposal is helpful for some manufacturing companies in Singapore that are struggling with rising costs and inflation.

“Small businesses are struggling to survive in the face of these challenges, so the SEZ provides a new avenue for businesses to relocate part of their operations to Johor, remain competitive and maintain the same cost structure as before,” he added.

“Businesses are waiting for more information about the special economic zones … but I think they are still very, very keen and very interested,” Mr Chen said.

Mr Jason Su, managing director of Singapore-based venture capital firm Farquhar, told CNA he was optimistic the SEZ would be “successful”, partly due to support from Mr Anwar’s federal government, which he described as a pro-business technocratic administration. Mr Farquhar specialises in investing in small companies expanding their businesses in Johor.

Mr Anwar has won praise from regional business leaders for creating a positive environment that encourages foreign investment.

During his tenure as prime minister, multinational corporations (MNCs) including Microsoft, Nvidia and Alphabet announced partnerships and investments in Malaysia.

US tech giant Microsoft Committed investment of US$2.2 billion China launched projects in the fields of artificial intelligence (AI) and cloud computing in May to help develop the country’s AI infrastructure.

Additionally, during a meeting with Prime Minister Anwar in December 2023, Nvidia CEO Jensen Huang jokingly referred to Anwar as the “prime minister of AI” and praised the government for having “excellent infrastructure” to advance AI in the region.