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Malaysia Budget 2024: Discussions ongoing for a Special Economic Zone in Johor state

Malaysia Budget 2024: Discussions ongoing for a Special Economic Zone in Johor state

Deputy Minister of Investment, Trade and Industry  Liew Chin Tong welcomes the efforts of Malaysia and Singapore's Governments respectively to form a Special Economic Zone (SEZ).

The Malaysia Budget 2024 has been passed at the committee stage with a voice vote in the Dewan Rakyat on 27 November 2023.

In discussing the Johor State Budget 2024, Deputy Minister of Investment, Trade and Industry (MITI) Liew Chin Tong touched on the potential of a new economic relationship between Johor and Singapore.

According to Deputy Minister Liew, three significant shifts in economic thinking are happening, and this requires a paradigm surge in response; prior logic dictated production according to the "just-in-time" practice, but has now changed to "just-in-case".

"This means that companies no longer only care about efficiency but also focus on supply chain security."

In turn, this change gives Malaysia a chance to once again develop its industry after experiencing "premature deindustrialisation," per the Minister, which now forms the basis for a new economic relationship between Johor and Singapore.

Creation of a Special Economic Zone

Speaking about the Johor State Budget 2024 in Parliament, Deputy Minister Liew welcomed the efforts of Malaysia and Singapore's Governments to form a Special Economic Zone in Johor state (JS-SEZ), which he proposes will mark the centenary of the Johor Causeway which was inaugurated by the late Sultan Ibrahim on 28 June 1924.

In his speech, for a successful SEZ, Deputy Minister Liew suggested that:

  1. A comprehensive transport study to be carried out jointly by Malaysia and Singapore, including the cross-border transport situation of Greater Johor Bahru and Singapore.
  2. Public transport in Greater Johor Bahru to have a higher target to generate a positive impact for the people.
    • Deputy Minister Liew hopes the State Government can target a 50% public transport capital share in Greater Johor Bahru within 10 years.
    • The construction of infrastructure such as BRT or LRT should take into account the movement of people on the horizontal axis from Pasir Gudang to the Second Link, especially after RTS services start.
    • He welcomes the allocation of RM26.5mn for the Johor Consensus Bus. It is suggested that half of this allocation be used for on demand buses (booking services through apps such as Kumpool) so that demand and supply can be adjusted.
  3. Ferry services between Pasir Gudang and Changi, Puteri Harbor with Tuas, and Forest City with Tuas, should be considered to be implemented to reduce the number of vehicles and subsequently, road congestion.
  4. More efforts to coordinate administration in the four local governments in Greater Johor Bahru — namely, Johor Bahru City Council, Iskandar Puteri City Council, Pasir Gudang City Council, and Kulai Municipal Council.
    • Although these four City Councils have different management, for the benefit of the people and also those who come from abroad, the management of Greater Johor Bahru including parking, landscaping, roads, policies for industrial areas, should be coordinated. It is proposed that a new portfolio named "Greater Johor Bahru" be added to the duties of the Local Government Exco to ensure that the expected rapid development in Greater Johor Bahru can be well managed.
  5. Plans to make Ibrahim International Business District a Central Business District (CBD) and a sustainable international business hub are welcome.
    • It is suggested that this CBD should make it easy for pedestrians, that is walkable with universal access facilities so that all residents of the city can walk comfortably in this area.
    • A study by an expert city planners should be carried out on the waterfront from Stulang Laut to Danga Bay so that cycle paths and pedestrian paths can be established along those 8 kilometers.

Economic security and economic inclusion

The Minister further went on to emphasise the importance of security and economic inclusion factors, including ensuring that income gaps are controlled and reduced.

"We should always remind ourselves that all economic measures and decisions made by the Federal Government and the Johor State Government must be directed towards generating better jobs with reasonable wages, and giving more business opportunities to local companies.

"Some people do not understand why, even though the inflation rate is so low now, which is 1.8% in October, there are still many people who feel burdened by the cost of living. The main issue is because of the salary level of people."

In this regard, another paradigm shift involves Centralised Labour Quarters (CLQ), or accommodation for foreign workers. Malaysia aims to reduce dependency on foreign workers in the manufacturing sector for the future. With this, State and Local Governments can provide incentives to industrial area managers to build comfortable accommodation facilities for local engineers and technicians, and also provide childcare services to encourage women's involvement in the economic sector, he suggested.

Lastly, more and more parties understand that not all things in life can be managed by market mechanisms, and the risk of over-financialisation needs to be addressed.

"One of the important ideas is that not everyone needs to buy and own a home. Our housing development philosophy should shift from home ownership to occupancy. Those who can afford it can choose to own a house, the majority of others can rent. The option to rent is not just for the poor."

Renting by the middle class, especially the young, will help meet housing needs, he stressed. Perfection of the process and legislation to protect the rights of both owners and tenants of houses should be given focus. It is proposed that a house rental enactment be drafted. With enactment protection and a focus on renting, areas with excess housing stock such as Forest City can be inhabited by more people.

Deputy Minister Liew also agreed with the Chief Balancer's suggestion that any increase in assessment tax should not exceed 15% so as not to become a burden to the people.

Lead image / Deputy Minister of Investment, Trade and Industry (MITI) Liew Chin Tong

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