Singapore, Malaysia aim to sign MOU on Johor-S’pore Special Economic Zone by early 2024: PM Lee

The zone aims to improve the flow of goods and people between both sides of the Causeway, and enhance the ecosystem of the Iskandar development region and Singapore.

Goh Yan Han

Goh Yan Han

The Straits Times


The two-day retreat between Malaysian Prime Minister Anwar Ibrahim and Prime Minister Lee Hsien Loong is their first since the Covid-19 pandemic. PHOTO: THE STRAITS TIMES

October 31, 2023

SINGAPORE – The leaders of Singapore and Malaysia had very productive and substantive discussions during a two-day retreat here, including on the Johor-Singapore Special Economic Zone, said Prime Minister Lee Hsien Loong on Monday.

The two countries plan to ink a memorandum of understanding (MOU) for the next stage of the project on Jan 11, 2024.

The zone aims to improve the flow of goods and people between both sides of the Causeway, and enhance the ecosystem of the Iskandar development region and Singapore.

Speaking at a joint press conference with Malaysian Prime Minister Anwar Ibrahim at the Istana, PM Lee said the 10th Singapore-Malaysia Leaders’ Retreat was an important milestone that reflects the continued importance both countries place on bilateral ties and on working together positively to bring tangible benefits to their peoples.

Datuk Seri Anwar had arrived in Singapore on Sunday for the retreat, the first between him and PM Lee and also the first since the Covid-19 pandemic.

On the Johor-Singapore Special Economic Zone, which he called a “substantial and promising project”, PM Lee said there is currently a feasibility study to see what the two countries want the project to focus on, and to look into where there is interest from investors and market demand.

The zone may come with special tax arrangements and other initiatives to improve the flow of goods across borders, he added.

There should also be better and easier arrangements for people who have to work on both sides of the Causeway, so that companies in the zone are able to get the right mix of personnel they need, PM Lee said.

He added that after the feasibility study is completed, there would be negotiations for an MOU.

“We’re hoping to have that done by early next year, but it’s a lot of work (for the Ministry of Trade and Industry) and the Ministry of Economy on the Malaysian side. I think they will have to scramble, but we would like to see it done as soon as we can,” he said.

Mr Anwar added that Malaysia would try its level best to accelerate the process.

“We’ve given a very short timeline to get them to agree on the parameters and sign the MOU by Jan 11… We look forward to having some sort of arrangement and agreement of understanding by mid-January,” he said.

PM Lee noted that the two countries’ bilateral relations are strong, particularly on the economic front, as each other’s second-largest trading partner.

Investments from Singapore to Malaysia have also grown tremendously, he said. Singapore was the top foreign investor in Malaysia in the first half of 2023.

“In an increasingly uncertain post-pandemic world, we need to enhance our cooperation, in particular our economic links and our people-to-people ties,” he said.

The two countries will build on agreements on the digital and green economies signed during Mr Anwar’s earlier visit in January, to pursue further win-win cooperation, added PM Lee.

The leaders also agreed to strengthen cooperation on renewable energy.

The renewable energy could potentially come from peninsular Malaysia as well as from east Malaysia, PM Lee added.

With both countries moving towards a low-carbon and sustainable future, they are pursuing cross-border electricity trading, he said.

On connectivity, good progress is being made, said PM Lee. One key project is the Rapid Transit System (RTS) Link between Johor Bahru and Singapore that is to be completed by end-2026.

“PM Anwar and I also discussed our efforts to alleviate congestion at our land checkpoints,” said PM Lee.

On Singapore’s end, the Immigration and Checkpoints Authority has introduced initiatives to make cross-border travel smoother and more efficient, while maintaining border security.

Singapore has also started to redevelop Woodlands Checkpoint to increase its capacity and meet the expected long-term growth in cross-border commuters, said PM Lee.

“I am glad that (Mr Anwar) welcomes and supports Singapore’s efforts,” he said.

Other efforts discussed at the retreat include the exchange of culture and heritage between the two countries, as well as the agreements signed between the respective economic agencies.

These are meant to strengthen collaboration between the two sides’ small and medium-sized enterprises and also update the Malaysia-Singapore Business Development Fund.

The fund aims to support joint test-bedding and pilot projects by Singapore and Malaysia enterprises in other countries in areas such as the green and digital economies. More information on the enhanced fund will be available from January 2024.

The two leaders also discussed outstanding bilateral issues, including maritime delimitation, reclamation at Pedra Branca, water and airspace, said PM Lee.

“These are all important issues, and we will consider them holistically and constructively, within the broader context of our overall relationship,” he said.

“Importantly, they will not be allowed to colour and affect this overall relationship, or detract from the many positive areas of cooperation between us. I am confident that the two countries can work out durable and mutually beneficial ways forward on all of these issues,” he added.

Mr Anwar thanked PM Lee for the candor, assistance and friendship shown.

“My colleagues will certainly share with me in expressing their gratitude and also appreciation for the fact that many of these issues are able to be resolved amicably… because of your kind interest and leadership and support,” he said.

He added that issues should not be taken in isolation, but looked at in the context of the entire bilateral set-up.

“Even water, which has been long outstanding, our position is clear that we have to honour the commitment and the supply of water from Johor to Singapore, and we will have to work jointly to ensure that Johor will be able to enhance the capacity to supply both for Johor’s needs, which are also expanding, and for Singapore,” he said.

On maritime boundary delimitation, he said Malaysia’s position is that both sides, in particular the attorneys-general, should conduct the discussions immediately to try and resolve it.

“Because I think (for) Malaysia and Singapore, it is a showcase of how two great friends can try and resolve in a win-win situation,” said Mr Anwar.

On how quickly bilateral issues are resolved, PM Lee said: “Sometimes there are reasons why things take time. But the PM and I both would like to move as expeditiously as we can to address these problems and address them from a national point of view, holistically, taking into account the overall relationship and cooperation between our two countries.”

PM Lee added: “We also have the determination on both sides to want to work together and to tackle these problems now, and have the confidence that politically, this is something which we can explain to our populations, to the rakyat (the people), that these are some things which will benefit the population on both sides and it’s good to do, win-win.”

Both leaders confirmed that the next annual Leaders’ Retreat in 2024 will be in Malaysia.

Mr Anwar also paid a courtesy call on President Tharman Shanmugaratnam, during which they discussed global and regional developments, as well as opportunities for future cooperation.

In a Facebook post after their meeting, Mr Tharman observed that Singapore and Malaysia have many common ties in areas such as culture, kinship and history. Leaders, civil servants and entrepreneurs in both countries are also in regular contact, he said.

“These shared bonds have allowed us to weather challenges together in the past. They will also enable us to work together to create a more borderless environment for enterprises, local and foreign, so we can complement each other and maximise the economic potential of our countries as well as Asean,” he added.

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