Singapore and Malaysia are partnering to create a special economic zone (SEZ) in Malaysia’s Johor state (JS-SEZ), adjacent to the Singaporean border.

The joint effort is designed to foster stronger business connections and improved connectivity between the two countries, as the region combats a global economic slowdown.

An MOU was signed between the leaders of the two countries on January 11 with a full-fledged agreement expected to be signed at the end of 2024.

The JS-SEZ is expected to attract more multinational firms into Johor as part of their risk-management strategy caused by U.S.-China trade tensions. 

Background

In late October, the Malaysian Prime Minister, Anwar Ibrahim, conducted a two-day leaders’ retreat with Singaporean Prime Minister Lee Hsien Loong in Singapore. The 10th Singapore-Malaysia Leaders’ Retreat marked a significant milestone in their bilateral relations, which the two prime ministers aimed to leverage for mutual economic benefits. The occasion was also their first such bilateral interaction after the pandemic.

Key goals

The planned SEZ seeks to enhance the movement of goods and people across the Johor-Singapore Causeway, while also bolstering the overall ecosystem of Iskandar Malaysia and Singapore. Established in 2006, Iskandar Malaysia is the main southern development corridor in Johor. 

(source)