Prime Minister (PM) Tun Dr Mahathir Mohamad recently alluded to Singapore’s seemingly ‘unfair’ advantage over the price of water it buys from neighbour Johor as a catalyst for the island republic’s continued economic success.
But is Singapore a bane for Johor’s development or is PM Mahathir’s confrontational diplomacy a stab in the back for the island’s neighbour?
Johor’s economic projects vs Mahathir’s vision
Shortly after winning the elections, PM Mahathir put the brakes on a series of Chinese-backed projects in Johor such as the US$100 billion Forest City project, and the Singapore-Malaysia High-Speed Rail (HSR), citing its unfavourable terms and downplaying its project benefits.
The premier’s administration would later set off on a diplomatic spat with Singapore involving Johor’s airspace and maritime boundaries, resulting in the postponement of a ministerial meeting between both countries which had planned to meet to discuss Johor’s Iskandar Region project – a multi-billion ticket that was meant to benefit Johor immensely.
Another project, the Johor Bahru-Singapore Rapid Transit System (RTS) which was hailed as a welcomed initiative to alleviate the congestion at the causeway has been delayed repeatedly due to inefficiencies with the Malaysian transport ministry.
So what gives?
In understanding Johor’s economic progress so far, we first have to question the progress of the projects that were meant to put Johor at the forefront of Malaysia’s economy in the first place.
Johor’s Iskandar Malaysia
The Iskandar Development Region (IDR) is Malaysia’s answer to Shenzen and is geared to become a manufacturing and technology hub – all within Johor.
The Joint Ministerial Committee for Iskandar Malaysia (JMCIM) is an annual meeting between leaders from both Singapore and Malaysia to jointly discuss initiatives focusing on cross-border transportation, immigration, tourism and environment specific to the IDR.
In January this year, the JMCIM was to have its 14th annual meeting, but it was postponed due to the intrusion by Johor’s Menteri Besar (Chief Minister) Dato’ Osman Sapian into Singapore waters.
Osman’s intrusion comes on the back of Mahathir’s administration pursuit to reclaim control of its airspace in Pasir Gudang, Johor, and its unilateral decision to increase the Johor Port Limits well beyond Singapore’s territorial waters.
A postponement of the JMCIM meeting puts a dent on the mutual economic cooperation enjoyed by the two neighbours so far and puts into question Singapore’s continued investment into Johor.
Singapore is the largest investor in the IDR.
The Kuala Lumpur (KL)-Singapore High-Speed Rail is a 350km-long railway line aimed at reducing travel time between both cities to around 90-minutes by train, from the current 11 hours on existing train services.
Both countries have since agreed to defer the project to 2031 instead of 2026, with Malaysia paying abortive costs amounting to about S$15 million.
Johor crown prince Tunku Ismail Sultan Ibrahim hailed the project as a “very, very positive project” that will help boost Johor’s economy and potentially attract more foreign investment into the state.
The Johor Bahru-Singapore Rapid Transit System (RTS) could reduce travel time from Singapore to JB by 30 minutes, and it was meant to be completed by 2024. Like the current Causeway jam, the RTS may be delayed beyond 2024.
According to Singapore’s transport minister Khaw Boon Wan, milestones in the project have been missed due to Malaysia’s delay in appointing a partner to oversee the project.
Malaysia’s Transport Minister Anthony Loke said that the country remains committed to the RTS project.
Singaporeans remain the largest source of tourist receipts for Malaysia. Most enter via Johor.
Just last month, Malaysia’s tourism director-general Datuk Musa Yusof released figures showing a drop of 14.7% in Singaporean arrivals, citing reasons such as traffic congestion and changing travelling trends among Singaporeans.
US$100 billion Forest City project
Launched in 2014, Forest City was touted to be an eco-smart, futuristic city. Johor ruler Sultan Ibrahim Iskandar said the project would help extend Johor’s land bank, boost the tourism, education and healthcare sectors, and create over 200,000 jobs.
Mahathir criticised the project in 2017 for allegedly favouring buyers from China and in 2018 – shortly after winning the general elections – the leader suddenly announced that Malaysia would not allow foreigners to buy residential units in Forest City citing sovereignity concerns.
The decision wracked investors’ confidence with the Johor Housing and Rural Development Committee Chairman Dzulkefly Ahmad arguing that the move will have a serious impact on the state’s property sector.
An UMNO lawmaker calls Mahathir’s move an economic sabotage.
Such an action could also deter potential investors into Johor.
Forest City is presently a ghost town. The city expects more than 700,000 residents by 2050.
Johor in 2019 but Mahathir still in 2000?
Mahathir’s involvement – or interference – in various economic projects involving Johor and Singapore, either through his direct hand or by proxy of his administration is well documented.
It is important to note, however, that the disruption of the abovementioned projects was premised upon a certain degree of reasonableness, such as mitigating the country’s ballooning debt (in the case of the HSR). The problem herein lies in the approach of ensuring that such disruptions are not at the expense of putting Johor at a disadvantage in the eyes of stakeholders and investors, especially when the state itself is gunning for foreign direct investments to improve its economy.
Interestingly, each time Mahathir takes a swipe at Singapore, the state of Johor stands as a reluctant wedge, with the biggest loser coming from Johor itself.
As of now, Mahathir remains a prickly thorn in Johor’s economic progress.