Johor Set for $38b Economic Boost from JS-SEZ by 2030

Southern state expected to rival Klang Valley as Malaysia's economic engine

- Shannon Teoh

Johor is expected to rival the Klang Valley as Malaysia's economic engine within the next decade, thanks to a projected US$28 billion (S$38 billion) boost in gross domestic product from the newly agreed upon Johor-Singapore Special Economic Zone (JS-SEZ).

Malaysian Economy Minister Rafizi Ramli told The Straits Times that this quantum of growth is expected by 2030, based on the target of 50 new high-value projects to be located in the zone in the next five years.

"If you put into your model all the spillover effects... one project (investment value) is about RM3 billion (S$912 million) to RM4 billion," he explained in a Jan 9 interview.

The JS-SEZ agreement, signed on Jan 6 in conjunction with the recent Malaysia-Singapore Leaders' Retreat in Putrajaya, will allow investors to leverage the expertise of Singapore, and the resources and cost benefits of Johor across nine "flagship zones" catering to different economic sectors encompassing the entire southern half of the state.

The huge projected economic boost will partly be due to investors in the new special economic zone being able to structure their businesses to take advantage of the lower trade barriers of either nation, as part of efforts to "reduce friction between operating in Singapore and Johor", Mr Rafizi said.

The impending return of President-elect Donald Trump to the White House has raised concerns of sweeping tariffs, especially against nations that run a trade surplus with the US.