Business Times Article dated 10 March 2012
Najib rolls out the red carpet for S'pore SMEs
Iskandar Malaysia to beef up security, improve transport links to draw S'pore businesses
By MALMINDERJIT SINGH
IN JOHOR BARU
ISKANDAR Malaysia will court small and medium-sized enterprises (SMEs) in Singapore struggling with high rental and other business costs to establish some or all of their operations there. To help achieve this aim, Malaysian Prime Minister Najib Razak yesterday announced new initiatives to ease concerns about the security and accessibility of the economic region.
MR NAJIB
Announced investment of RM24.5 billion to improve conditions in the Iskandar development region
Mr Najib announced an investment of RM24.5 billion (S$10.2 billion) to improve conditions in the Iskandar development region as well as the rest of southern Johor through 32 projects in three key areas: security, public transport, and physical outlook and infrastructure. According to Ismail Ibrahim, chief executive of the Iskandar Regional Development Authority (IRDA), these initiatives will be used to attract more Singaporeans, particularly SMEs, to Iskandar.
'We will very much look towards Singapore businesses to come here, and this interest is already happening as I have regular contact with the business community in Singapore and whenever I have any discussions, I will consult them,' Mr Ismail said.
He said Iskandar Malaysia would be looking towards attracting businesses that operate within the region's designated economic growth sectors and those that can create skilled jobs and add value to the wider Johor economy. The nine sectors that have been identified as instrumental in catalysing growth for the Iskandar region are: education; tourism; logistics; creative industries; petrochemicals; polychemicals; electronics and electrical engineering; food and agro processing; and healthcare.
Speaking to BT, Mr Ismail noted that with these 32 projects in the pipeline, Iskandar Malaysia could become an attractive destination for SMEs from Singapore, with the cost advantages thrown in. Many SMEs coming into Iskandar Malaysia have already done their sums, but he didn't rule out more sweeteners in the future. 'Any incentives rolled out in the future will be a bonus,' he said.
Mr Ismail explained that from consultations with Singapore businesses, their concerns about the Iskandar region centred around the location, connectivity, infrastructure and security of the place - concerns that he feels have been addressed by Mr Najib's announcement yesterday.
'To improve access to Iskandar Malaysia, we need to ensure that infrastructure is built. If we don't improve connectivity, in 2-3 years, we may face problems for the movement of people and goods from Singapore to Iskandar Malaysia,' he said.
Mr Ismail added that the Rapid Transit System (RTS) was an example of how both governments saw a need for greater connectivity. 'We are targeting the RTS for 2018, probably by developing a tunnel. The RTS could either happen by rail, road or a combination of the two.'
Mr Najib said that the quality and capacity of the public bus system would be improved and there would be better roads to drive on. There would be an integrated terminal and ticketing system for public transport. The taxi industry would be reformed.
This will be followed by other more innovative measures including establishing a domestic rapid rail and water taxi system by 2020, which will involve redeveloping key river routes in the region.
Mr Ismail acknowledged that security is a concern for Singaporeans and so measures have been rolled out to ease these worries. 'In order to ensure that this region can offer an attractive environment for business and investment, we need to look very closely at matters regarding safety and security,' he said.
Adding that a security blueprint with 40 measures had been developed, he pointed out that the crime rate in Iskandar Malaysia had fallen - last year's crime index showed that the crime figures for the region were lower than the national average.
Nevertheless, he pointed out that out of the 32 projects announced by Mr Najib, up to 10 were specific to addressing security concerns. These include an integrated CCTV system and 138 community police posts to be set up by 2020 across Iskandar Malaysia, closer coordination among enforcement agencies and crime prevention programmes.
'An estimated RM14.2 billion, or 58 per cent, of the total investment for these projects (RM24.5 billion) will be fulfilled using public funds, while the remaining RM10.3 billion or 42 per cent, will be contributed by the private sector,' Mr Najib said.
The prime minister was speaking on a visit to Johor Baru yesterday, where he launched the Iskandar Malaysia Economic Corridor Transformation Programme, a programme that includes 27 Entry Point Projects in the tourism, education, and oil and gas sectors.
Along with the security, infrastructure and transportation initiatives, the total of 59 projects unveiled by the prime minister yesterday are expected to attract as much as RM139.3 billion in cumulative domestic and foreign investments, while contributing RM25.57 billion to Malaysia's gross national income (GNI) and creating 68,000 jobs by 2020.