This article first appeared in The Edge Malaysia Weekly on June 9, 2025 - June 15, 2025

MUCH progress has been made since the Johor-Singapore Special Economic Zone (JS-SEZ) was first announced in 2024, with a slew of investments flowing into data centres, the Forest City Special Financial Zone and the manufacturing sector, among other things.

It has been touted as a bright spot in an uncertain global economy, marked by trade tensions and disrupted supply chains, and an economic driver for Johor and Malaysia.

However, despite the optimism, there are also questions on whether this ambitious project will be sustainable and inclusive, and if it can stay resilient amid the volatility in the market caused by the trade war and rapid technological changes.

The Edge-HSBC JS-SEZ Forum 2025 will attempt to unpack the latest developments and explore how the JS-SEZ is relevant in the current and future economies, while highlighting the business and investment opportunities in the special economic zone.

Titled “Enabling the Next Leap Forward”, the forum gathers industry leaders from the public and private sectors in Malaysia and Singapore to discuss their hopes and plans, ahead of the JS-SEZ roadmap that is expected to be finalised by the end of the year.

“The JS-SEZ represents one of the most forward-looking regional collaborations in Asia. This ambitious initiative aims to tap into the two countries’ comparative advantage, which is Malaysia’s vast land and energy resources, as well as its labour potential, along with Singapore’s capital and technology,” says Datuk Omar Siddiq, CEO of HSBC Bank Malaysia, which is the main partner for the forum. “Additionally, it serves as a catalyst for transforming Johor’s economy, enhancing bilateral trade and strengthening Malaysia-Singapore ties.”

Omar observes that the JS-SEZ is a necessary catalyst for the Malaysian government’s efforts to attract more high-quality foreign direct investments (FDI) and propel the country’s economic growth, thus improving the quality of life for Malaysians.

The JS-SEZ has nine flagship areas and promoted sectors including electrical and electronics, petrochemical and oleo chemical, food and agro-processing, logistics, tourism, healthcare, financial and business services, and creative and education.

High value investments are expected to flow into these sectors, says Omar. The tourism industry, for instance, is projected to increase in the JS-SEZ, with the state government targeting RM42 billion in tourism revenue from its Visit Johor 2026 initiative.

To attract talent, the state has negotiated with foreign investors in the JS-SEZ, enabling them to offer premium salaries starting from RM3,500 to local workers, while special border passes are given to senior management officials from firms that are part of the JS-SEZ to travel between Johor and Singapore.

Passport-free QR code clearance for visitors and digitised processes for cargo clearance have also been implemented to enable smoother movement of people and goods across the border. Work on the much-awaited Rapid Transit System (RTS) Link, meanwhile, is making significant progress.

These are important initiatives to ensure the JS-SEZ’s success and contribute to stronger intra-Asean ties, which some observers see as critical amidst the trade war.

“The success of JS-SEZ will reinforce Asean’s vision of economic integration and digital transformation, enhancing regional supply chains and investment flows. As Asean pushes towards a single digital economy, the JS-SEZ can be a showcase of how interconnected infrastructure, talent mobility and trade facilitation can thrive in a multi-country context,” says Omar.

The JS-SEZ is also beneficial for Singapore, which has a long-standing economic relationship with Malaysia. The special economic zone provides a practical framework for both countries to scale new industries, attract FDI and enhance supply chain integration, observes Datuk Lee Chun Fai, group CEO and managing director of IJM Corp Bhd (KL:IJM).

“For Singapore, the zone offers a natural extension of its limited physical footprint. It enables expansion into sectors that require space, infrastructure and talent, all of which Johor can provide competitively. For Malaysia, it is an opportunity to anchor high-value economic activity closer to home, develop future-ready infrastructure and raise Johor’s profile as a regional gateway,” he says.

IJM Corp is a supporting partner of The Edge-HSBC JS-SEZ Forum 2025.

“This isn’t just a policy ambition. The JS-SEZ creates a more competitive, integrated economic corridor — a real opportunity to capture regional investments and turn plans into outcomes,” adds Lee.

The forum will include a dialogue session to discuss the factors that make the JS-SEZ a new growth catalyst. It will feature Liew Chin Tong, deputy minister of investment, trade and industry; Lee Ting Han, chairman of trade, investment, consumer affairs and human resources at the Johor State Executive Council; and Omar.

Johor, where 50 data centres are said to be in stages of application or construction, or are already operational, is fast emerging as a major tech hub in the region. This is one of the often-mentioned strengths of the JS-SEZ, even as the US-China trade war changes the landscape.

“Asean is undergoing a transformational phase and data centre capacity is projected to grow over five times to 8.9GW by 2030, and Malaysia and Singapore together are expected to account for over 60% of Asean’s market share,” says Omar. “The digital economy, which encompasses artificial intelligence development, cloud infrastructure, cybersecurity and fintech platforms will also see growth due to the data centre boom.”

There are concerns regarding the energy-and-water-intensive data centre operations, and whether they will generate sufficient high-value jobs for the local community or support technological innovation in the state.

Some of these questions will be explored during a panel discussion at the forum, where representatives from major data centre players in Johor — Princeton Digital Group, AirTrunk and Microsoft — will discuss how the state can become a tech hub that is sustainable and innovative.

Another sector that is raising interest is logistics, thanks to the RTS Link and the Gemas-Johor Bahru Electrified Double Track Project, expansion of highways and initiatives to facilitate smoother cross-border movement of goods.

“The zone provides the right enabling conditions: improved connectivity, investor confidence and regulatory support. IJM Corp is already active in this space. We’re involved in three data centre projects and in the construction of the RTS Link’s Immigration, Customs and Quarantine Complex — a key cross-border infrastructure project,” says Lee.

“We’re participating across multiple fronts — infrastructure, technology and urban development. The JS-SEZ gives companies like IJM the platform to do more, and to do it faster.”

Lee will be a speaker — along with Natazha Hariss, CEO of Invest Johor, and Samuel Tan, CEO of Olive Tree Property Consultants — on a panel to discuss the opportunities across the various sectors in the JS-SEZ.

A key catalyst for the success of the JS-SEZ is policy alignment and commitment from the federal government, Johor government and the Singapore government, observes Omar. Continued public-private partnership is also essential.

“The essential ingredients for the JS-SEZ to succeed are already in place — its logistical advantage, infrastructure readiness, rule of law, access to talent and capital, and more,” he adds.

This is echoed by Lee, who says coordinated execution is crucial. Government support will play a central role in aligning infrastructure, incentives and regulatory clarity.

“At the same time, the active involvement of private players, government-linked companies, investors and financiers will sustain the momentum and drive real transformation on the ground,” he says.

“From a business perspective, harmonising cross-border regulations, enabling talent mobility and ensuring infrastructure readiness are all critical. Execution timelines must be reliable, and approval processes must be streamlined to give investors the confidence to act.”

This is a long-term transformation for Johor and it has to be done right with urgency, alignment and focus, adds Lee.

These perspectives will be highlighted during a panel discussion titled “A wishlist for JS-SEZ” that will feature Teoh Kok Lin, senior advisor for the Associated Chinese Chambers of Commerce and Industry of Malaysia; Kok Ping Soon, CEO of Singapore Business Federation; and Datuk Mohd Noorazam Osman, CEO of Iskandar Regional Development Authority.

The business and investment opportunities presented by the JS-SEZ are clear, and Omar hopes that private sector players will leverage it.

“With strong support from the government, attractive tax incentives and a focus on high-growth sectors like the digital economy, advanced manufacturing and infrastructure, private sector players will be able to see the genuineness of these opportunities, and consider JS-SEZ as a compelling platform to not only grow and scale regionally but to also develop new capabilities,” he says.

The Edge-HSBC JS-SEZ Forum 2025 will be held on June 23, 2025, at Doubletree by Hilton, Johor Bahru. The event is by invitation only.

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