Plans for Johor

Malaysia

Economic News

22 Jul 2010
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This week it was announced that the state of Johor would become one of the primary growth engines of the country under the Ninth Malaysia Plan (9MP). The southern state will become the fist of four new power-corridors in the country, a magnet for investment and job growth.



"It will be the engine of growth for the manufacturing sector in the region," Prime Minister Abdullah Ahmad Badawi said in an off-the-cuff announcement on Sunday. He was addressing a crowd assembled to greet him at Senai airport in Johor Baru. Dubbing the new initiative the South Johor Economic Region (SJER), he said that foreign firms were ready to invest RM15bn ($4.11bn) to jump-start the project.



According to the Abdullah, the SJER will be a priority development by the government under the 9MP. It is set up to facilitate growth for various sectors, including service, manufacturing, industries, information and communication technologies (ICT), and logistics.



He also framed the progressive initiative as a return to past glory for the state. "I want Johor to prosper just like in the old days under rulers like Sultan Abu Bakar, who is the founder of modern Johor," Abdullah said.



Johor's allocation of RM1.55bn ($424m) under the 9MP is the largest among all states. The SJER, when fully developed, could surpass Klang Valley as the nation's largest growth area, and place Johor as a rival to Singapore. At 10,000 ha the SJER site is about twice Singapore's size. Abdullah compared the envisioned Johor with metropolises such as Hong Kong and Shenzhen in China, which in 25 years grew from a fishing village to a catalyst for Chinese economic growth.



Most of the new developments are geared towards attracting industry. A new waterfront city is being constructed as well as a Cybercity - south Johor's answer to the Multimedia Super Corridor south of Kuala Lumpur. The corridor will also incorporate the logistical capacities of the ports of Tanjung Pelepas and Johor, as well as Senai airport. The latter will be integrated even further to provide greater ease in transporting manufactured goods. A medical hub and an Educity are also in the works.



As part of the plan, Johor will also receive a new administrative capital at Nusajaya. The city is already under construction and due for completion in August 2007. It will include a new legislative centre and secretariat for the state, and accommodate federal government offices.



The SJER master plan, which will outline the developments in greater detail, will be completed and announced by the end of this year.



The government believes that Johor's location at the southern tip of south-east Asia allows it a considerable strategic advantage, and the abundance of land and low prices will pique the interest of investors who might otherwise have gone elsewhere in the region.



Unlike some areas in the region, Johor also possesses quality infrastructure, including communications capabilities, as well as a large population, which could provide human resources.



Besides being a potential boon to manufacturing and investment in the region, it is also good news for property developers and construction outfits, who will see a surge in demand for their services in the region. As the project is scheduled to be completed over the course of several years, it also means that the growth in these sectors will be sustained over time.



Khazanah Nasional Berhad, the government's investment arm, is providing direct investment for the project, as well as co-ordinating private sector participation from international and domestic firms. Khazanah is also overseeing the planning and production of the SJER master plan.



An important component of the SJER will be the creation of a one-stop, fast-track mechanism agency to expedite investment, both domestic and foreign.



The federal and state governments will also play a major role in facilitating an environment friendly to foreign investment. Immigration, education, land and tax issues will all be managed though close liaison with local authorities.



The prime minister will personally oversee the progress of initiative. He will co-chair the project's implementation committee along with Johor's chief official, Menteri Besar Datuk Abdul Ghani Othman.



Plans for Johor's development have been discussed since last year. Abdullah made it clear on July 31 that he was the primary source for the development initiative. "It is my own vision and plan to create this super corridor in south Johor to make it the nation's premier growth centre," he said.

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