Greater Johor Bahru as the second metropolitan

A fresh look at the immense potentials of Greater Johor Bahru, also known as the Iskandar region, would serve as the catalyst for Malaysia’s second economic takeoff. Greater Johor Bahru should be positioned as the nation’s second metropolitan after the Klang Valley, and to achieve this end, be given adequate resources and policy support.

Political structure

Before Independence in 1957, as a result of the British decentralised governing structure, Penang, Ipoh, Johor Bahru/Singapore, and Kuala Lumpur, were of similar level of economic importance. Post Independence, Kuala Lumpur became the nation’s unrivalled commercial centre while the disparity between Kuala Lumpur and the nation’s other cities grew wider.

Political structure was one of the many underlying factors that resulted in the widening gap. UMNO was the dominant party that provided the candidate for the Prime Minister while almost all Peninsula states were governed by an UMNO Menteri Besar, who was most likely a state liaison UMNO chief appointed by the UMNO President who also wielded powers as Prime Minister. Under such tacit institutional setting, the state governments tended to acquiesce to most of the federal government’s dictates.

The Malaysian Constitutional framework provides that the federal government takes all the proceeds from income taxes while the state government could only rely on land taxes and other natural resources.

However, since the end of the Barisan Nasional’s one-party state structure in 2018, states have become important power centres. Even if the state Menteris Besar of Chief Ministers are from the same party, the Prime Minister and the federal government had to be more consultative with them. In the case of Johor, the Sultan is a strong advocate for states’ rights.

The new political milieu should provide an impetus for more attention to be given to the needs and potentials of the greater Johor Bahru.

There were similar attempts before. Prime Minister Tun Abdullah Ahmad Badawi created new federal “corridor” agencies, such as Iskandar Region Development Authority, with the objective of developing the region with federal resources and projects. However, the approach is now generally regarded as merely adding a “corridor” layer of bureaucracy without the intended benefits of conurbation effect.

Prime Minister Datuk Seri Anwar Ibrahim has recently instructed the corridor agencies to cease investment promotion function. In the long run, IRDA should be “returned” to the state of Johor and synchronised with the state authority.

The Singapore factor

Since the fall of the Berlin Wall in 1989, which symbolised the collapse of Communism, the world entered into a period of hyperglobalisation. Coupled with the containerisation of transport, which only became the dominant form of freight in the last half-century, outsourcing of manufacturing under the ethos of “just-in-time” was the rule of the game until Covid-19 hit the world in 2020.

Singapore was the poster child of hyperglobalisation. As the global city and regional financial hub, firms from Europe and North America set up regional headquarters in Singapore while locating their main production lines in China and other low cost countries around the globe. For some decades, Singapore needed no hinterland.

What has changed? Covid-19 and other pandemics, as well as health challenges such as ageing society, means firms have to price in disruption. Likewise, wars and geopolitical tensions, climate change and climate-related disasters, and financial instability, are disruptions that can no longer be ignored.

The world has now moved from “just-in-time” to “just-in-case”, from the sole pursuit of economic efficiency, i.e. low production cost to economic security. The key phrase now is “shorter and more secured supply chain”.

In such a context, the Greater Johor Bahru provides Singapore a production site. Investors investing in Singapore are demanding to see their factories within a couple of hours of flight time. Johor is within sight, and reachable by roads, very quickly.

Housing costs, especially rental, have increased tremendously over the past few years in Singapore largely due to the influx of China investors who relocated from China for various reasons. The high housing costs in Singapore is juxtaposed with a glut of apartments, condominiums and high-end residential properties in Johor Bahru. Singapore and Johor Bahru may be each other’s cure as far as the housing question is concerned, provided commuting is smooth.

The separation between Malaysia and Singapore in 1965 wasn’t entirely cordial and this has created  a sense of competition between the two neighbours. It was real with the older generation of leaders who knew each other personally but tended to compete with each other, such as Tun Dr Mahathir Mohamad and the late Mr Lee Kuan Yew. Today’s leaders may have less sense of animosity and suspicion between them.

Rethinking Greater Johor Bahru

An important mindset shift is that the federal government would need to recognise that if any parts of the nation are thriving, such as Johor Bahru, the result is inevitably beneficial to the country as a whole.

There is a need to see Greater Johor Bahru as the second metropolitan of the nation, after the Klang Valley. The region is huge and sees economic migrants from as far as Sabah and Sarawak, as well as northern and eastern states, relocating to find better opportunities, whether in Johor Bahru or in Singapore.

Once Greater Johor Bahru is seen in different lights from other state capitals, resources and policy support could be channelled to fulfil human development needs, such as schools, hospitals and care facilities, and other economic requirements.

My parliamentary seat of Iskandar Puteri and the state seat of Perling are both in Greater Johor Bahru, and I can see very clearly the needs for more resources for human and social development. The current planning doesn’t take into account the huge number of Malaysian economic migrants who congregate in the region.

More resources should also be channelled to provide decent public transport for the region, especially bus and water-based modes of transport. Many Johoreans are familiar with Singapore and therefore can easily become accustomed to taking public transport if sufficient services are available.

A Greater Johor Bahru-wide transport master plan also takes into consideration cross-border traffic should be commissioned. The advent of the Rapid Transit System – scheduled to be completed in 2027 – is a good start to make commuting more convenient. But it should not end there.

More efforts should be made to make immigration checks easier with the introduction of newer technology and speed. Special arrangements should be made for holders of Malaysian and Singaporean passports, or at least regular users of the crossings, to cross borders with minimal checks. If there’s a fear of crime, the authorities on both sides, especially the police, have already had extensive cooperation to deal with it. 

The KTM Tebrau Shuttle should not cease service after the coming of the RTS. And, more catamaran-based ferries should be introduced, such as between Forest City and Julong, and between Pasir Gudang and Changi, to provide more options besides the Causeway and the Second Link. Making walking across the Causeway a more comfortable experience with walkalator and roof-cover, as announced by the Prime Minister in January, should be pursued as a low-hanging fruit by the Home Ministry and its counterpart in Singapore.

With more commuting links, firms could set up shops in Greater Johor Bahru while continuing to maintain a presence in Singapore. When more businesses locate some parts of their operations in Greater Johor Bahru, they still can save on other operation costs even when paying their workers at least two-thirds of Singapore’s pay. It will help shift the wage structure of the Greater Johor Bahru, with more employers having to pay higher wages across the board.

When many more Malaysian workers get better paid in Johor, less will need to travel to work in Singapore while consumption in Greater Johor Bahru will thrive further through integration and a general population that has better income.

If done well, Greater Johor Bahru as the second metropolitan will be one of the engines of growth that will power Malaysia’s second economic takeoff.

(This piece was first published in The Edge on 4 September 2023)