JOHOR, MALAYSIA: As Malaysia heads for its general election, some Singapore companies are adopting a wait-and-see attitude in investing in the country, especially in Iskandar Malaysia.
They say any investments, if any, will be done after the election, which is widely expected to be held within weeks.
On Wednesday, Malaysian Prime Minister Najib Razak dissolved parliament, paving the way for the country’s 13th general election.
While some Singapore companies say they may hold on to their investment decisions for a while, they are still keen to find out what the economic corridor in southern Johor can offer.
Some 200 businessmen were in Johor recently for a fact-finding mission to Iskandar Malaysia led by the Singapore Manufacturing Federation.
Some businesses say they are prepared to take changes in the political landscape in their stride.
Patrick Chang, managing director of Paclin Office Products, said:
“Like everything else, you change the top, the base is still there. So, it’s just a management change, life goes on. Of course, there will be slight policy changes here and there, but I guess generally it’s for the economy and the economy drives everything else. I have a Penang branch, and reports from Penang are that they have done even better. They are now running a surplus.”
Iskandar Malaysia was developed in 2006, and Singapore is the largest single foreign investor there.
Statistics from the Malaysian Investment Development Authority indicates that Singapore companies have set up more than 300 manufacturing projects in Iskandar Malaysia so far.
Developers are also ramping up infrastructure, with concepts like green business parks which are gated and guarded.
Hoe Mee Ling, divisional general manager of SP Setia, said: “The cost in Iskandar Malaysia is much lower, I would say just one third the cost in Singapore. Another reason is the good infrastructure and recently the investment climate in Iskandar Malaysia is very good. There are a lot of incentives given and…enhanced security.”
Some Singapore businesses say they believe it’s better late than never to consider investing in Iskandar, especially with changes in Singapore’s manpower policies.
Billy Wong, managing director of Metrohm, said: “I think Singapore SMEs have no pressure or urge to move out yet during that time. But I think because of the recent Budget and government’s new long term directions for the economy of Singapore, that will give us driving force for people to reconsider the option. JB Iskandar is in the vicinity of the home country, that makes Iskandar probably re-emerge as an attractive place for Singaopore entrepreneurs.”
Currently, about 70 per cent of investments in Iskandar Malaysia are in manufacturing, with the remainder in services. By 2025, the Iskandar Regional Development Authority wants to reverse that trend to shift the economic corridor towards a more services-based industry.
This shift will propel Malaysia to improve the income of its workers.
Singapore companies believe this will have an impact on enterprises going into Iskandar in the future, but concede it’s a natural progression for any country who wants to move up the economic ladder.
Singapore firms adopt wait-and-see attitude ahead of Malaysian election
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