Proposed Special Economic Zone Aims to Enhance Business Ties Between Singapore and Malaysia
Singapore and Malaysia agreed on new economic incentives to boost border trade at the Memorandum of Understanding Signing Ceremony on Jan. 11.
Both countries have partnered to create a special economic zone (SEZ) in Malaysia’s Johor State that is expected to be signed at the 11th Leaders Retreat at the end of 2024. This agreement will serve as an impetus to strengthen business between the two countries, which has suffered due to the global economic slowdown.
Singapore’s Prime Minister Lee Hsien Loong and Malaysian Prime Minister Anwar Ibrahim said in the conference that they ‘are committed to improving the flow of goods and strengthening the business ecosystem to support investment.’ The SEZ will also serve as a chance for the two nations to improve mobility between countries, which is an important factor in strengthening business.
Additionally, SEZ will include several other initiatives. One of them being the one-stop business and investment service centre in Johor that will ease the application process for Singapore businesses. This will be especially beneficial to those who are looking to start a business with connections to several countries.
They also shared the idea of creating a passport-free clearance system on both sides of the border. The countries will consider training and work-based learning programs to bridge gaps in relevant industries. Additionally, they will collaborate on joint promotional events to strengthen ties between the two countries.
Other key points made by the prime ministers include trading success. Malaysia and Singapore were each other’s second largest trading partners in 2022 as well as Singapore was Malaysia’s top source of foreign direct investment (FDI), contributing 20.5% to Malaysia’s total FDI in the same year.
Recently, both prime ministers witnessed the completion of the first connecting span Rapid Transit System (RTS) link connecting Singapore and Johor Bahru. This 4-kilometer railway link, set to commence passenger services in December 2026, will connect Johor Bahru’s Bukit Chagar station with Singapore’s Woodlands North station.
According to Prime Minister Lee, the RTS and JS-SEZ would “enhance cross-border links, support businesses and create jobs on both sides of the Causeway.”
Johor-Singapore Causeway continues to be one of the world’s busiest border crossings with over 350,000 travelers daily.
