Johor-Singapore SEZ to spur trade, labour and investments: Maybank 

The initiative could help ease the shortage of talent.

Maybank Investment Banking Group expects the proposed Johor-Singapore Special Economic Zone (SEZ) to unlock opportunities and spur the exchange of trade, labour, investments and green energy initiatives between the two economies.

In a note, Maybank’s macro team led by Chua Hak Bin laid out six key catalysts that could maximise the potential of the SEZ as the two Southeast Asian neighbours stand to reap immense economic rewards.

At the onset, they said the initiative already enjoys strong support from both national governments and Malaysia's new King, Sultan Ibrahim Sultan Iskandar. The two nations have also strengthened cross-border integration efforts with the rollout of passport-free immigration clearance via QR code at the Causeway and Tuas Link land checkpoint in March.

The analysts highlighted that the upcoming Johor-Singapore RTS Link, to be operational in 2026, will boost connectivity and reduce traffic congestion between the two nations. They also allayed the fears of a possible repeat of the terminated 2021 Kuala Lumpur-Singapore High Speed Rail (HSR) project, noting that the political environment has improved. 

Faster and streamlined connectivity will likely attract more Johor workers to work at Singapore-based companies, as well as boost the appeal of the Malaysian city as a business hub.

Further, the SEZ is expected to create high-value added jobs and address issues on talent and labour shortages.

“We are optimistic that the creation of a SEZ will drive a step-up jump in the cross-border flow of goods, people and investments. There is a strong impetus from both the Malaysia and Singapore governments and the King to make the SEZ a success, given that it offers win-win opportunities that tie in with long- term policy goals,” the analysts said in the research note dated May 10.

The Maybank experts also see the SEZ boosting the appeal of Singapore and Johor as a manufacturing base for multinational companies diversifying their supply chains away from China. 

Johor likewise offers firms lower operating costs, competitive wages and favourable exchange rates, which could provide Singapore companies a reprieve in light of the spiking business costs in the city-state.

Lastly, the analysts also see opportunities created in the green space. 

“Singapore’s access to green funding and its own sustainable energy needs, coupled with Johor’s abundance of land and natural resources should catalyze joint investments in renewable energy projects,” they said.