Singapore-Johor update: ISEAS Perspective "Iskandar Labours to Develop" by Khor Yu Leng and Vasiliki Mavroeidi

Just to alert you that I have a new update on Iskandar Malaysia, released by the Institute of Southeast Asian Studies. This was co-written with Vasiliki (PhD scholar at Cambridge University), who has been a Research Associate on a bunch of papers and studies.

ISEAS has released an abridged version of our update: http://bit.ly/1DX0Oa4, written by Guest Writers Khor Yu Leng and Vasiliki Mavroeidi and titled “Iskandar Malaysia Labours to Develop”.

Key topics:

• Iskandar Malaysia located in southern Johor is now marketed as the northern adjunct of Singapore and for transboundary living. 40% of investments were in the real estate sector.
• High profile, large-scale property development projects by China-based companies has been the latest phenomenon. Country Gardens is the most noted.
• The role of the Sultan of Johor in business is figuring high.
• Another issues is the recently increased cost of vehicles crossing the border.

Extracts from full report:

Iskandar Malaysia is developing as the de facto northern adjunct of Singapore, in a significant policy supported by the sovereign wealth funds and the administrations of Malaysia and Singapore. Malaysia and international property developers have done much to sell it as a dormitory town to the booming island state. This is amidst Johor’s already key role as a provider of cheaper goods and labour to Singapore, attested by the heavy flow of traffic across the border each day. The Iskandar project, centred on the development of the Medini zone, and with a sprawling territory is in its early rapid build-up stage as infrastructure (including new key road arteries to unblock Johor logistics congestion) and residential estates are being put in place. In this early first phase of implementation, a critical mass of population has yet to come in place. More property is set to come via the ambitious Country Gardens – Johor “Forest City” reclamation project. The current issues surrounding the grand Johor-Singapore project relate to Johor political-business power shifts, nascent stakeholder concerns on their poor inclusion and alienation in it, and concerns about the rising cost of living (housing and transport) of the cross-border lifestyle and the outcome of the property push by China and other developers. Some of these issues will probably see some resolution as the large build of property and cost-effective mass rapid transport roll out in the short and medium term. As Iskandar starts to be populated, investors will likely be playing close attention to property occupancy rates as well as new manufacturing and high-end service investment and jobs creation.

The most vociferous public concerns have come from former Prime Minister Mahathir Mohamad. In his personal blog, he worried the radical changes in the landscape of the “new Johor Bahru” (in Malay: Johor Bahru Baru) would not see Malays from the city or nearby villages occupy the many skyscrapers in the planning. In a jibe at selling out to foreigners, Mahathir noted that Singapore was sold in 1819 to the British for only 60,000 Spanish dollars by the Temenggong (governor acting for the Sultan of Johor) when the island was only inhabited by a few fishermen. He also pointed out that new citizens could become a political force in Johor and affect the balance with ethnic Malay voters. Mahathir cites a Malay proverb that development may come with a hefty price (“Yang penting ialah Malaysia menjadi negara maju walaupun ayam dikepok mati kelaparan dan itik di air mati kehausan”): locals would suffer in their own bountiful land due to the influx of outsiders (Mahathir 2014). In reaction from the political opposition, PAS vice-president Salahuddin Ayub said: “We hope that former prime minister Tun Dr Mahathir Mohamad will give further explanations on the fight to prevent the Iskandar region from being taken over by foreigners,… because it involves the issue of national security which the Iskandar project seem to have threatened” (Malaysia Chronicle, 14 July 2014).