As Malaysia heads into its 13th General Election, Singaporean companies are adopting a wait-and-see stance in investing in the country, especially in Iskandar Malaysia. They say that any investments will be done after the election, which is slated to be held within weeks.
Malaysian Prime Minister Najib Razak on Wednesday had dissolved the Parliament, paving the way for Malaysia’s 13th General Election.
Although some Singaporean companies say they may hold on to their investment decisions for the time being, they are still interested in finding out what the economic prospects are in southern Johor. Some business assert that they are prepared for any potential changes in the political landscape.
Some 200 businessmen were recently in Johor for a fact-finding mission to Iskandar Malaysia, led by the Singapore Manufacturing Federation.
Managing Director of Paclin Office Products, Patrick Chang said, “Like everything else, you change the top, but the base is still there. So, it’s just a management change and life goes on. Of course, there will be slight policy alterations here and there, but I guess generally it’s for the economy and the economy drives everything else. I have a branch in Penang, and reports from Penang are that they have done even better. They are now running a surplus.”
Iskandar Malaysia in Johor was developed in 2006 and Singapore is the largest single foreign investor there. Statistics drawn from the Malaysian Investment Development Authority indicate that Singaporean companies have set up more than 300 manufacturing projects in Iskandar Malaysia.
Developers are also starting to heavily invest in infrastructure, with concepts like gated and guarded green business parks.
Divisional General Manager of SP Setia Bhd, Hoe Mee Ling said, “The cost in Iskandar Malaysia is much lower; perhaps about a third of the cost in Singapore. Another reason is the good infrastructure and the investment climate in Iskandar Malaysia is very conducive as of late. There are a lot of incentives given.”
Some Singaporean businesses believe in the adage of “better late than never” in investing in Iskandar, especially with changes in Singapore’s manpower policies. Says Billy Wong, Managing Director of Metrohm, “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 the government’s new long term directions for the economy of Singapore, it will give us a driving force for people to reconsider the option. JB Iskandar is in the vicinity of the home country, and that makes Iskandar re-emerge as an attractive place for Singaporean entrepreneurs.”
About 70 per cent of current investments in Iskandar Malaysia are in manufacturing, with the remainder in services. The Iskandar Regional Development Authority intends to reverse that trend to shift the economic corridor towards a more services-based industry by 2025.