Winds of change: Malaysia’s corridors of power
In a recent interview that I had with Rafidah Aziz, Malaysia’s Minister of Trade and Industry, I asked her how the ninth Malaysia Plan was progressing. Under this plan, the government had identified four new “power corridors” that focus on job creation and investment, which in turn will help the country to lessen the regional imbalances and improve income gaps between the rural and urban areas.
With the launch of the South Johor Economic region in 2006, both Aziz and Prime Minister Badawi concurred, “Our vision is to make South Johor into a new international rendezvous for business, leisure, and culture, and have it be a showcase for the entire country.”
The South Johor region is being promoted as an area for logistics, the services industry and ICT. The area, also known as The Iskandar Development Region, is adjacent to Singapore and has the potential to become a serious rival to its prosperous neighbor to the south. Some of the developments include a waterfront city as well a cybercity. A full integration of the airport and the ports of Tanjung Pelepas and Johur is in the cards. A medical hub and “education city” are also planned.
From a real estate persepective, Johur Baru and its suburbs have long dreamed of becoming a “Shenzen” to Singapore as Shenzen is to Hong Kong. With the many promising plans for the Iskandar Development Region, this could become a reality.
The IDR promotes two main draws for foreign investment. The price for virgin land remains competitive when compared to Singapore RM30 (USD7.9), per square foot, versus RM800 ($210) in Singapore. Second, new passport-free access zones will be built near the actual border crossings. Companies are looking to that zone to enjoy tax incentives similar to the Multimedia Super Corridor.
As if that were not enough, the final developmental boost would be the government’s resumption of a high-speed train link from Thailand to Singapore.
The northern region of Malaysia is also due to receive a large influx of capital for the creation of The Northern Corridor Economic Region (NCER) to support the traditional, agriculture-based economy, tourism, and the expansion of the Kulim high-tech park.
The Eastern Corridor Economic Region (ECER) plan will drive growth in the east coast states of Pahang, Terengganu and Kelantan. Key developments will include government spending on tourism infrastructure, airport, oil and gas, and petrochemical production.
The ECER is spearheaded by Petronas, Malaysia’a national petroleum company. The planned allocation of 33 billion dollars will be used to develop infrastructure and facilities in the region.
Even the more isolated states of Sabah and Sarawak in Borneo, will receive nearly 3.5 billion dollars for key infrastructure to help industry and tourism. Sabah can look forward to a new palm oil industrial cluster and Sarawak, a new deep-fishing complex.
Promotional efforts are afoot to target select industries and companies in line with growth areas. Part of the effort will be a first—an on-line business-matching service to connect businesses—and will help in connecting local companies at the growth areas with international business partners. ( E-Connect).
In 2008 Malaysia plans two trade missions to the United States, covering St. Louis, New York City, and Salt Lake City in May 2008 and Boston, Cincinnati, and San Diego in December.
