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Malaysia and Singapore agree to launch a special economic zone in a rare move to attract investors

ROB GILLIES
January 07, 2025

KUALA LUMPUR, Malaysia (AP) -- Malaysia and Singapore leaders signed an agreement on Tuesday to create a special economic zone to attract global investment and ease the cross-border flow of goods and people.

Malaysian Prime Minister Anwar Ibrahim called the Johor-Singapore special economic zone a "unique initiative" that harnesses each other's strengths and deepens linkages in a world that is becoming more polarized.

"Very rarely you find two countries working together as a team," he told a joint news conference after the signing ceremony. "These two countries have a common strategy, to assist one another, to work and benefit from each other's strengths... This is the new attitude we must have other than talking always in terms of rivalry and unnecessary conflicts."

The zone, in Malaysia's southernmost Johor state, will offer tax breaks and include several flagship areas for various sectors, from manufacturing and aerospace to tourism, energy and healthcare. Officials are targeting to attract 50 projects within the economic zone in the first five years, creating 20,000 skilled jobs. The move is a boon to Singapore, a global financial hub with scarce natural resources and land.

Singapore Prime Minister Lawrence Wong said the neighbors' strong linkages are an important foundation and building block for an integrated region. Malaysia is the chairman this year of the 10-member Association of Southeast Asian Nations.

"Where ASEAN is concerned, we are talking about not just more trade and investment linkages, but infrastructure linkages including the ASEAN power grid. These are all good projects that Singapore will support and we hope under Malaysia's leadership, we can make good progress," Wong said.

"The greater competition we face is not among ourselves within ASEAN, it's outside of the region... so ASEAN has to come together, look at ways in which we can enhance our value proposition and be competitive together," he said.

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