KUALA LUMPUR: Singapore firms view Johor as an attractive destination and are eager to set up operations and invest in the proposed Johor-Singapore Special Economic Zone (JS-SEZ), according to a report released by the Singapore Business Federation (SBF).
Key findings from the JS-SEZ Singapore Business Working Group's (SBWG) report, titled 'Greater Together: Two Economies, One Ecosystem,' revealed that 93 per cent of respondents consider Johor an appealing investment destination, with half of them already operating in the state.
However, they expressed concerns about sourcing skilled and technical workers, congestion at the land crossings delaying the movement of people and goods, and difficulties handling tax issues.
Nearly 60 per cent of the Singaporean businesses surveyed reported challenges in sourcing technical and skilled workers in Johor, and they also faced difficulties in attracting Singaporean talent to work across the border.
Additionally, 61 per cent of the companies attributed the manpower crunch to employment pass issues, 58 per cent cited skill gaps in the Malaysian labour force, and 21 per cent pointed to salary mismatches as a contributing factor.
The findings were released at a JS-SEZ Joint Investor Forum on Thursday and are based on SBF's engagements with 160 Singaporean businesses across various industries. Speaking at the forum, SBWG Chairman Teo Siong Seng said the enthusiastic response to the report highlights the JS-SEZ's great potential for the region.
"This isn't just another project; it's a potential game-changer for both Malaysia and Singapore. This is about more than just closer integration; it's about crafting an economic powerhouse that harnesses our complementary strengths on a sustainable basis.
"By bridging our economies, we're creating new opportunities that will benefit businesses on both sides of the causeway," he added.
To address the manpower crunch, the SBWG suggested that authorities from both sides create a unique labor ecosystem that leverages the strengths of the two economies: Singapore's research and development (R&D) and management capabilities with Johor's technical skills for execution and operations supporting various industries.
Other key proposals included developing harmonized workforce regulations, investing in each other's workforce to enhance manpower capabilities and bridge skill gaps, and establishing talent acquisition programs.
In January, Singapore and Malaysia signed a Memorandum of Understanding (MOU) on the JS-SEZ, which is expected to offer both fiscal and non-fiscal incentives like tax breaks and easier travel between the two countries.
The special economic zone will target sectors related to electronics, financial services, business-related services, and healthcare.
Economy Minister Rafizi Ramli, who is heading SEZ negotiations for Malaysia, said at an investor forum for the JS-SEZ on Wednesday that the signing of the agreement is on track for September, with officials from both sides working on finalizing the details.
Rafizi said that Malaysia has presented its framework to Singapore and is awaiting a response, adding that negotiations should be kept confidential and that specific details, including the JS-SEZ's geographic scope, can only be announced after the agreement is signed.
Following that, Malaysia aims to present its financial package for the JS-SEZ, including fiscal and non-fiscal incentives, in the October budget speech.