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SINGAPORE’S government is aware of concerns that the Johor-Singapore Special Economic Zone (JS-SEZ) might hurt certain industries, and is monitoring the zone’s impact, said Minister of State for Trade and Industry Alvin Tan in Parliament on Wednesday (Feb 5).

He was responding to Member of Parliament Saktiandi Supaat (Bishan-Toa Payoh GRC), who asked if there were concerns that some industries will be negatively affected, with certain investments and firms relocating to the JS-SEZ.

Saktiandi noted that the Singapore Transport Association, to which he is the adviser, is worried that the local transport and logistics sector will be affected by Malaysian logistics entering Singapore.

He asked about mitigation measures to ensure investments intending to enter Singapore will not be affected by overlapping incentives offered by both countries.

Tan replied: “Indeed, these are views that we have also gotten on the ground in our frequent interactions with businesses across different sectors.” He noted that the MP’s concerns are shared by the Singapore Business Federation (SBF).

Discussions between both countries are ongoing, said Tan. “More details will be released, and we are monitoring all the impact that the SEZ will have on both sides.”

Gaining an edge

Tan noted “considerable investment interest” in the JS-SEZ, with more than 100 Singapore firms to join SBF’s mission to the zone later this month.

With an increasingly uncertain economic landscape and intensifying global competition for talent, trade and investments, “it is imperative that if Singapore wants to be competitive, we need to be more nimble, more innovative and enhance our competitive gain,” he said.

“If executed well, the JS-SEZ will give us that additional competitive edge… It will give us the opportunity and the impetus to build on our inherent strengths.”

Earlier in his response, Tan said companies can benefit from the zone with twinning operations in both countries, which many Singapore-based companies already have.

For instance, they could site some operations in Johor to take advantage of resources there, while focusing headquarter and research functions in Singapore to leverage the city-state’s relative strengths.

“The JS-SEZ seeks to capitalise on the complementary strengths of Singapore and Johor to strengthen Singapore’s competitiveness and create good jobs for Singaporeans,” he said.

“Businesses across sectors including manufacturing, logistics and the digital economy can benefit from the improved cross-border flow of goods and people, and ease of doing business in the JS-SEZ.”

Both countries can also jointly attract new investments, which may establish operations in Singapore or tap services provided here, said Tan.

He cited the example of Singapore-headquartered agri-commodities and food ingredient company Agrocorp International, which recently set up a plant protein extraction facility with its Japanese partner in Malaysia.

“These investments in Johor create value for the Singapore economy as our firms grow,” said Tan.

Saktiandi also asked what government schemes, such as productivity grants or investment incentives, can be extended to Singapore companies investing in the zone.

Tan replied that the government will continue to support such businesses through existing schemes, such as the Market Readiness Assistance grant and the Enterprise Financing Scheme administered by Enterprise Singapore.

On the Malaysian front, an incentive package with special corporate and income tax rates for qualifying investments has similarly been announced, added Tan, and more details will be released in due time.

More BT stories here on the JS-SEZ.