Malaysia and Singapore have signed a memorandum of understanding to establish the Johor-Singapore Special Economic Zone (SEZ). Benedict Weerasena, Research Director of Bait Al Amanah was interviewed by Nikkei Asia on his perspective of the SEZ.
Weerasena explained that the Johor-Singapore SEZ is a positive catalyst for enhancing cross-border business activities and attracting investments. Aligned with the Madani Economy Framework, the SEZ will facilitate the movement of goods, capital, people, and knowledge to promote greater regional economic integration. The initiative is seen as instrumental in revitalizing and propelling Iskandar Malaysia’s growth, particularly in the wake of the impact of pandemic-related border restrictions. However, the specific sectoral growth opportunities will only be seen as more details are made public in due time.
While the SEZ holds great promise, its feasibility as Malaysia’s Shenzhen depends on several key factors which made Shenzhen Special Economic Zone a clear success story. These include market-oriented reforms such as the reduction of bureaucratic hurdles and decentralization of power to local authorities; the expansion of preferential policies such as tax incentives and favourable land policies; robust physical and digital infrastructure development; emphasizing innovation through research and development (R&D) and technology-driven industries.
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