Republic is best candidate to help lure other partners: M’sian official.

(SINGAPORE) In the same way a shopping mall needs a big-name store to be its ‘anchor tenant’ so as to help draw in customers for the other stores, Malaysia could be looking for Singapore itself to be ‘anchor tenant’ in its new development zone in Johor.

Dr Ng: There’s synergy to be derived from Singapore’s position as a world financial hub

The suggestion came from Lim Chee Sing, executive director at RHB Research Institute, speaking yesterday at the Malaysia-Singapore Business Forum. He said that the planned Iskandar Development Region (IDR) needed such an anchor tenant to help it take off - and Singapore was the best candidate.

‘That’s the best catalyst that IDR can hope for,’ Mr Lim said. He said that the key was for the IDR to offer a low to medium cost manufacturing base for Singapore companies and multinationals, including backroom offices.

If political obstacles were overcome and security issues addressed, the region could become a powerful source of new growth for businesses in the two countries, he said.

Malaysia’s deputy finance minister, Ng Yen Yen, made a keynote address to over 100 delegates at the forum.

‘We believe that if Singaporeans come in, the IDR project will take off very well. We want to see you as a partner, not a competitor,’ Dr Ng said.

She said there was synergy to be derived from Singapore’s position as a world financial hub and Malaysia’s standing as a leading centre for Islamic finance.

Dr Ng also touched on various areas that Malaysia has sought to beef up, such as security in Johor, the approval of land use through a one-stop centre, and keeping land valuation work down to 14 days. She emphasised that it was important not to let politics get in the way of economic co-operation and mutual benefit.

The IDR, which is three times the size of Singapore, will allow foreign companies to enjoy tax incentives and permit them to have 100 per cent ownership of land and equity. There is a 50-per cent discount on stamp-duty for each housing transaction below RM250,000 (S$108,000) and no restriction on home ownership by foreign direct investors.

So far, some RM382 billion in investments has been committed over a period of 15 years, with US$1.2 billion of it coming from the Middle East.

In a panel discussion at the forum, the IDR Authority’s senior vice-president, Ismail Ibrahim, said that the region has the advantage of gaining economic influence from Singapore given their proximity, an advantage not enjoyed by other development zones in Malaysia such as the Northern Corridor Economic Region and the Eastern Corridor.

‘We are clear with regards to IDR that we want to establish very good rapport and relations with Singapore,’ Mr Ismail said.

According to the IDR master plan, the economic impact stemming from the IDR is 0.09 percentage point on Malaysia’s gross domestic product.

Earlier on at the forum, ministers for education from both countries signed a memorandum of understanding on educational co-operation. They noted that the rise of China and India has increased the urgency for an integrated value chain in Asean.

This requires Asean countries to approach the challenge in a pragmatic manner,’ Malaysian minister Ismail Ibrahim said. ‘And pragmatism here requires us working together to attract investors in this region through new approaches that suit the prevailing context.’

Singapore minister Tharman Shanmugaratnam also emphasised the creation of a single value proposition within Asean that will attract investors not just to individual economies but to an integrated Asean entity.

‘The IDR creates buzz for the region as a whole. There could be competition in some aspects but more importantly, it creates buzz … and a sense of a single value proposition,’ Mr Tharman said.

Source: Business Times