ISKANDAR PUTERI, Johor: Prime Minister Anwar Ibrahim’s plan to designate Johor’s beleaguered Forest City development as a special financial zone could be a boost for Singapore-Malaysia business cooperation - if it can overcome multiple obstacles and take off as envisaged, say industry leaders. They say
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Melvin Tan led Singapore Manufacturing Federation's one-day business mission to Johor Bahru in August. “The SFZ could trigger a multiplier effect - more Singaporean companies set up base in Forest City, and Johor companies will also enjoy more business cooperation with them and enjoy transfer of technological knowledge and expertise,” added Mr Low.
Economics professor Dr Yeah Kim Leng of Malaysia’s Sunway University said Forest City's redesignation as an SFZ, which comes with fiscal and financial incentives to attract international firms, would also encourage Johoreans currently working in Singapore to consider finding employment closer to home instead.
The project would also need the support of the governments of both Malaysia and Singapore, as well as the developer of Forest City, Country Garden Malaysia, they added. The task force studying the zone is scheduled to give a progress update at the 10th Singapore-Malaysia Leaders’ Retreat to be held in Singapore later this year.
He noted that a similar special economic zone was set up in 2009 by then prime minister Najib Razak in Terengganu and Pahang to draw China investment into the east coast of peninsular Malaysia. The area is called the Eastern Corridor Economic Region Special Economic Zone . Economist Walter Theseira from the Singapore University of Social Sciences noted that this concept of a special financial or development zone in Malaysia to take advantage of Singapore’s proximity, as proposed by PM Anwar, is not new.
“What the regional economies outside Singapore naturally hope for is to acquire a larger slice of the high value added pie over time, but it is unclear if these special zones have helped achieve those objectives.
On Tuesday , Reuters reported that Country Garden was seeking to add a 40-day grace period for the repayment of a 3.9 billion yuan private onshore bond due on Saturday. “How the financial challenges of the parent organisation affect any particular development would depend on how the finances are organised for that particular project ,” he added.
SMF’s Mr Tan echoed similar sentiments, as he acknowledges that Singapore firms will be wary of investing in areas with poor infrastructural amenities and a questionable financial track record.
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