Bridging Economies: Malaysia-Singapore Improves Economic Co-Operation
Together, Malaysia and Singapore agreed to create a special economic zone along the Singaporean border in the southern province of Johor in Malaysia. The primary objectives include attracting investments and facilitating the seamless movement of people and goods across their shared boundaries.
The Johor-Singapore Special Economic Zone (JS-SEZ) memorandum of understanding (MOU) was signed by Malaysia’s Economy Minister Rafizi Ramli and Singapore’s Trade and Industry Minister Gan Kim Yong to formalize their cooperation. Later, in a joint statement, the two leaders reaffirmed their commitment to moving forward with a thorough agreement. The Memorandum of Understanding outlines Malaysia and Singapore’s collaborative efforts to improve the movement of people and goods across international borders while also fortifying the SEZ’s economic environment to draw in investments.
Exploring additional measures to boost the JS-SEZ’s growth, both countries are considering a passport-free passage system on both sides of the border and potential collaboration in the renewable energy sector. The overarching goal of the agreement is to create a business-friendly region in Johor, free from government restrictions, fostering economic growth and improving connectivity.
Furthermore, the collaborative ventures are exploring potential additional initiatives, including the establishment of a consolidated one-stop business-investment service center in Johor tailored for Singaporean companies, the implementation of streamlined digital procedures for cargo clearance at land checkpoints, co-hosting an investors’ forum, and fostering cooperation in renewable energy within the Johor-Singapore Special Economic Zone (JS-SEZ).
In a separate development, both nations welcomed the completion of the initial connecting span for a new light rail transit system (RTS) that links Johor Bahru, the state capital of Johor, with Singapore. Spanning 4 km and boasting a peak capacity of up to 10,000 people per hour in each direction, the RTS is designed to connect Johor Bahru’s Bukit Chagar station with Singapore’s Woodlands North station. Anticipated to commence passenger service by the end of 2026, the RTS aims to alleviate traffic on the Johor-Singapore Causeway, the busiest land crossing globally. The Johor-Singapore Causeway witnesses a daily transit of over 350,000 individuals. Valued at 10 billion ringgit ($2.2 billion), this train link is the latest addition to the Causeway, initially constructed in 1924 and subsequently undergoing various expansions and upgrades.
There were discussions between Malaysia and Singapore centered around the possibility of developing a 350-kilometre high-speed railway connecting Singapore and Kuala Lumpur, supplementing their current connectivity. Despite the initial announcement in 2013, the project was shelved in 2020 due to disagreements and financial hurdles on the Malaysian side. Recent signals indicate a potential inclination from Anwar’s government to resurrect the project, contingent upon substantial cost savings.
Malaysia and Singapore have established a thriving bilateral trade, anticipating a value of $90.3 billion in 2022. This exceeds the combined trade of both nations with Indonesia, Thailand, the Philippines, and Vietnam. Economy Minister Rafizi Ramli underscored the importance of the Johor-Singapore Special Economic Zone (JS-SEZ), describing it as a distinctive opportunity for both countries to amplify cross-border trade and movement. These agreements are poised to further fortify the already intimate economic bonds between Singapore and peninsular Malaya. The positive momentum is evident in the upward trajectory of Malaysian stocks with substantial exposure to Johor in the weeks leading up to the signing of the memorandum. The expected deepening of the relationship between these nations is anticipated to deliver an additional economic stimulus for the region.
