Malaysian Pie in the Sky?

Will a new Malaysian development project aimed at cashing in on proximity to Singapore end up a waste of money?

By Catherine Chan for

In uptight Singapore, the Malaysian city of Johor Bahru had a reputation as a seedy escape of fast cars, cheap golf and sex tourism. It’s a stereotype, though, that holds less truth in recent years.

Malaysia's attempts to create a special economic zone to take advantage of its more prosperous neighbour, much like the relationship with China’s Shenzhen and Hong Kong, has seen a spate of building activity under the Iskandar Project. Conceived more than six years ago—and more than twice the size of Singapore—the region around Johor Bahru, just north of Singapore, has had infrastructure money poured into it, with Prime Minister Najib Razak allocating some RM339 million ($111 million) for transport and highway construction in 2011.

Driving along the road next to the expanse of flat water that makes up the Straits of Johor, the quiet tempo of life is being disturbed by roads being ripped up and traffic rerouted. Factories are opening in designated industrial areas, and 'attractions' like Legoland, Hello Kitty and Bob the Builder theme parks and a medical faculty affiliated with Britain’s Newcastle University are due to come online in the next 18 months.

An estimated 100,000 people make the daily commute from Malaysia to Singapore to work and study, a growing case of brain-drain that Iskandar hopes to reverse, or at least stem. Nusjaya, an administrative, business and residential project, is being developed under the Iskandar project by UEM Land, the government-linked property company. Aimed at 'complementing Singapore', by 2025 the population of the Iskandar region is expected to increase by 30 percent to 3 million, a portion of this coming from Singaporeans escaping increasing costs of living.

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So far, UEM has succeeded in attracting some Singaporean companies to set up factories in Nusjaya. Singapore's land scarcity, lack of natural resources, a natural population replacement rate at well below sustainable levels and an aging society make Iskandar seem like it could be of benefit to both nations.

On the waterfront of the causeway straits however, the depressing reminders of past attempts to capitalise on Singapore's wealth stand in the shape of enormous abandoned shopping malls, now mouldering in the tropical humidity. In one of the functioning shopping centres that was open for business during the Chinese New Year lull, defunct train lines stood half finished, rusting away along what was supposed to be a high-speed link with Singapore.

Hopes are that Iskandar doesn't turn into another Putrajaya, the perfectly peaceful government planned city 30 kilometres south of Kuala Lumpur, which serves as Malaysia's federal administrative centre. Developed in 1993 and home to a host of grandiose showcase buildings, Putrajaya's residential population stands at around 70,000, with 20 ministries and 51 government departments and agencies in the city.

Attracting human capital will be the main challenge for strengthening the economic growth of the area. One long-term Johor Bahru resident, a Malaysian-Chinese doctor, isn’t so sure. 'I could have moved to Singapore long ago,’ the doctor said. ‘But the reason I stayed isn’t only because I am a Malaysian, but also for the lifestyle. I just don't see young people being attracted to a city like JB. It just doesn't have a nightlife. There's nothing for young people to do here except go across the border.'

Catherine Chan is an environmental lawyer and journalist based in Beijing.

(This article is an edited version of an entry that appeared in the Lowy Institute's Interpreter that can be found here.)