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January 13, 2025 | 07:58 am
TEMPO.CO, Jakarta - Malaysia and Singapore recently announced an agreement to establish a Special Economic Zone (SEZ) in the Malaysian state of Johor, aimed at supporting investment and facilitating the movement of goods and people between the two countries.
The agreement was announced during a visit by Singaporean Prime Minister Lawrence Wong and several senior ministers to Malaysia. The SEZ had previously been agreed in principle by both countries a year ago.
"This is a significant project. We can become more competitive, enhance our value proposition and together attract more investment to our region," Lawrence Wong said at a joint press conference with Malaysian Prime Minister Anwar Ibrahim as reported by Reuters.
Prime Minister Anwar Ibrahim emphasized that the project is a unique initiative as it is rare for two countries to work together on a single major project. The Johor-Singapore SEZ is expected to attract high-value investments in sectors such as manufacturing, logistics, tourism and energy transition.
"The two countries have a common strategy to help each other, work together and leverage each other's strengths. This is a new approach that we should take rather than continuing to talk about unnecessary rivalry or conflict," Anwar said.
Malaysian Economic Minister Rafizi Ramli added that the SEZ's target includes 50 projects in the first five years with the creation of 20,000 skilled jobs. Malaysia will manage an infrastructure fund to support companies that want to invest in this zone. Meanwhile, Singapore will provide its own funds to support Singaporean companies operating in Johor.
This economic zone will offer tax incentives and include a number of mainstay areas for sectors such as manufacturing, aerospace, energy and health. This effort is not only expected to attract global investment but also encourage economic integration in the ASEAN region.
Prime Minister Lawrence Wong stated that the close relationship between Malaysia and Singapore is an important foundation for building a more integrated region. He also emphasized the importance of ASEAN regional cooperation in enhancing mutual competitiveness, rather than competing with each other.
In addition, the two leaders opened up the opportunity to revive the high-speed rail project between the two countries. Anwar stressed that the project should be led by the private sector with minimal government involvement.
One immediate impact of the agreement is the introduction of a passport-free QR code system to speed up immigration clearance processes for land travel between the two countries. Additional measures are also being considered, such as streamlining operations for Singapore-based businesses operating in Johor, Malaysia, including digitizing cargo clearance processes at land checkpoints.
Thousands of Malaysians travel to Singapore every day for work and study, often causing congestion at the border, one of the world's busiest. With the SEZ, both countries hope to ease that burden while also improving economic ties.
REUTERS | APNEWS.COM
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