From today's Business Times Singapore editorial...
Since the Tanjung Pagar KTM handover, almost everyday got some good news about Singapore being closer to Iskandar...
Editorial
Published July 5, 2011
Prospects for win-win deals with Malaysia
WITH the chapter on the railway land deal closed in the Malaysia-Singapore story, the path now seems clearer for both countries to look into new avenues of cooperation and collaboration. As leaders and officials on both sides look back at a diplomatic triumph, they will also realise that they now have a window of opportunity to leverage on goodwill and trust to achieve new milestones.
But before they embark on any new ambitious project, it would perhaps be more useful that they focus on reaching more realistic and attainable goals. That is, pick the 'low-lying fruit' that are already within reach. Later on, if all goes well, it might be feasible to look at bigger deals - such as a comprehensive economic agreement, which would have more wide-ranging benefits.
A clear area of collaboration in the short term is the Iskandar region in Johor. The jewel of Malaysia's new economic plans, the Iskandar project can potentially offer interesting win-win possibilities. Malaysia would undoubtedly benefit from greater Singapore participation - which would help catalyse investments from elsewhere - while Singapore companies would gain from accessing a low-cost hinterland with good infrastructure less than an hour's drive away.
While there have been some investments from Singapore companies, there is clearly room for more, particularly in areas such as health care, education, and high-technology ventures. Some of these can be joint ventures, with Malaysian and/or third-party entities.
An initial endorsement from a Singapore government-linked company that invests in Iskandar would probably be the confidence booster that other Singapore businesses need to follow suit.
As for Malaysia, it makes sense to reach out to Singapore to help boost the profile and appeal of Iskandar to a global level. Singapore's success in attracting investments could also serve as a blueprint of sorts to Iskandar as well. But for that to happen, there are two things in particular that Malaysia will have to address - security and regulations.
Although the Johor police may have stepped up their efforts to battle crime in the state, safety is still topmost on the minds of many Singaporeans who may look toward investing there. Intensifying security efforts in a visible way would do much to encourage more participation in Iskandar - and not only from Singapore.
Many Singaporean companies also still seem unsure about the regulatory environment in Malaysia, especially given the host of new economic programmes and incentives rolled out over the last year.
Malaysia should look into expanding its outreach efforts in Singapore and explaining the benefits and features of its new economic initiatives. What most Singaporeans would like to know, especially, is the extent to which the economic and regulatory frameworks in Iskandar and elsewhere are insulated from the vagaries of Malaysian domestic politics.
http://www.businesstimes.com.sg/sub/views/story/0,4574,446091,00.html?
