Malaysia’s proactive approach in establishing ties with all countries, in line with the government’s neutral and independent stance, will help to create investment opportunities while boosting exports.

Prime Minister Datuk Seri Anwar Ibrahim said although the nation’s investment ties are seen to lean towards China, Brazil, South Africa, Canada and Mexico, its trade relations with the United States (US) continue as usual.

“The US remains an important trading partner. Trade with the US stands at 11 per cent, which is quite high, and Malaysia’s exports to the US are still close to 13 per cent,” he said during the Minister’s Question Time in the Dewan Rakyat today.

He said this in reply to a question from Lim Guan Eng (PH-Bagan) on Malaysia’s stance regarding the global trade war sparked by the US President’s tariff policies.

Lim also asked whether Malaysia would align itself with China, Canada, and Mexico, as well as financial and fiscal measures that would be taken to protect the Malaysian economy and its people from the impact of these tariffs.

“We cannot act too hastily as there are uncertainties in some of the decisions announced by the US President Donald Trump.

“For instance, there was a policy change just yesterday when he decided to delay the implementation of tariffs on Canada and Mexico. So, within a month, further policy shifts could happen, or the decision may be maintained,” Anwar said.

Aside from expanding its trade network, the Prime Minister stressed that the government must also ensure domestic growth initiatives are strengthened, in line with policies that have been announced, including the industrial, energy transition, and digital transformation plans.

The commitment of government-linked investment companies (GLICs) to inject RM120 billion into national development projects over five years is also expected to help drive economic growth.

“This will be complemented by several fiscal measures, including subsidy rationalisation, which will ensure sustainable growth and keep inflation under control,” he added.

Source: Bernama

Malaysia’s global ties to boost investments, exports – PM Anwar

The overall progress of the East Coast Rail Link (ECRL) project, spanning four states — Pahang, Kelantan, Terengganu and Selangor — has reached 78.5% as of last month, said Second Finance Minister Datuk Seri Amir Hamzah Azizan.

He said this promising progress aligns with the scheduled completion of the first phase of the ECRL, running from Kota Bharu, Kelantan, to the Gombak Integrated Terminal, Selangor, by December 2026, with operations expected to begin in January 2027.

Amir Hamzah added that the second phase, connecting Gombak to Port Klang, is set to be completed by December 2027 and fully operational by January 2028, based on the project’s current developments.

“Alhamdulillah, this is no small project — it is a major endeavour involving many stakeholders working together. I congratulate MRL [Malaysia Rail Link Sdn Bhd] and CCC-ECRL [China Communications Construction] for their collaboration in achieving the current progress.

“This project will boost the economy of the East Coast, acting as a catalyst to attract more investments to the region while creating numerous job opportunities in Kelantan, Terengganu and Pahang,” he said.

He was speaking at a press conference after launching the SDG Sukuk Impact Reporting for the ECRL project at the Section 10 ECRL project site on Tuesday. Also present was MRL chief executive officer Datuk Seri Darwis Abdul Razak.

Regarding the Sukuk report, Amir Hamzah highlighted in his speech that it serves as proof of MRL’s commitment to ensuring sustainable, high-impact infrastructure development for long-term benefits.

By leveraging the Sukuk SDG Impact Report, he said the ECRL project not only enhances connectivity but also aligns with the United Nations’ Sustainable Development Goals (SDGs), advancing environmental, social and economic objectives for the country.

“The report highlights the significant progress made and the measurable impacts of this landmark initiative. In April 2024, MRL achieved a historic milestone by becoming the first Ministry of Finance [MOF] company and the first in the transport industry to establish an SDG Sukuk programme.

“This groundbreaking effort raised RM4.5 billion in 2024 to fund the ECRL, a transformative project connecting Kelantan, Terengganu and Pahang to the Greater Klang Valley as well as enhancing connectivity and unlocking vast economic opportunities across these regions,” he said.

He said the SDG Sukuk issuance attracted overwhelming interest from investors and achieved the tightest spread for a government-guaranteed Sukuk in Malaysia’s history.

“This success earned prestigious accolades, including Best Islamic Finance Deal in Southeast Asia and Best Green Sukuk 2024 by Alpha Southeast Asia, further reinforcing Malaysia’s global leadership in Islamic finance and sustainable development,” he added.

Meanwhile, Darwis stated that the ECRL project is on track for completion as scheduled, with construction progressing smoothly across 361 active work sites involving more than 18,000 personnel along the ECRL route.

“With this highly encouraging construction momentum, MRL is optimistic about commencing ECRL operations in two years, aligning with the aspirations of the public and the business community in providing seamless transportation for passengers and cargo.

“As such, East Coast residents living in the Klang Valley will only need to wait for two more Syawals before they can take the ECRL home to celebrate Hari Raya Aidilfitri in 2027,” he said.

Source: Bernama

ECRL progress surpasses 78%, first phase to start operations in 2027

Malaysia’s export diversification is crucial as its manufacturing sector continues to face headwinds from subdued global growth prospects, geopolitical tensions and trade policy risks, economists said. 

TA Securities, in a note, cautioned that any slowdown in China’s trade flows could have indirect repercussions for Malaysia, given that China is one of its largest export destinations.

Moreover, the ongoing shift in global supply chains, coupled with geopolitical uncertainties, may introduce further volatility in trade performance, the house said. 

“Against this backdrop, Malaysia’s ability to diversify its export markets and enhance trade resilience will be crucial in sustaining economic growth targets for the year,” it added. 

The seasonally adjusted S&P Global Malaysia manufacturing purchasing managers index (PMI) edged up slightly month-on-month to 48.7 in January 2025, compared with 48.6 in December 2024, but marked the eighth consecutive month of output contraction on a year-on-year basis.

PublicInvest Research noted that subdued global growth prospects and escalating geopolitical tensions could weigh on export-oriented industries. Additionally, heightened uncertainty surrounding global trade policies — particularly in light of US President Donald Trump’s policy stance — may further pressure industrial activity.

“Despite these challenges, steady domestic consumption, fiscal measures supporting investment, and a gradual recovery in key trading partners may help mitigate external headwinds,” the house said in a note.

BIMB Securities, meanwhile, highlighted that Trump’s renewed trade war — especially tariffs on Mexico, Canada, and China — could negatively impact Malaysia’s export-driven industries, particularly those deeply integrated into China-centric supply chains. 

Sectors such as electronics, automotive components, and machinery, which rely heavily on cross-border supply networks, are especially vulnerable, the house said.

Nevertheless, it said Malaysia could benefit from the “China+1” strategy, as companies seek to diversify their production bases away from China. This could drive investment inflows into the country, strengthening its manufacturing capabilities and trade competitiveness, said the research house. 

“Despite ongoing challenges, Malaysia’s manufacturing sector has the potential for stabilisation in 2025, supported by sustained electronics exports and increased foreign direct investment under the China+1 strategy. Additionally, domestic policy support under Budget 2025 is expected to stimulate demand and provide a buffer against external headwinds,” said BIMB. 

Source: The Edge Malaysia

Export diversification crucial for Malaysian manufacturers as US tariffs, China slowdown weigh, say economists

The Johor-Singapore Special Economic Zone (JS-SEZ) is still in a strong position to attract foreign investment despite the global economic uncertainties sparked by the United States’ recent tariff imposition, says Lee Ting Han.

The Johor investment, trade, consumer affairs and human resources committee chairman said this is because the JS-SEZ is a platform for foreign investors to tap into the growing Asean market.

“There is uncertainty following the United States’ move to impose high tariffs on goods from Canada, Mexico and China. In my personal view, this could impact the global supply chain.

“However, it will not immediately impact the JS-SEZ as the zone is a window of opportunity for foreign investors to get into the Asean region, which has a population of almost 700 million,” he said yesterday.

On Saturday, US President Donald Trump slapped 25% tariffs on imports to the US from Mexico and Canada, and 10% for goods coming from China.

Analysts have warned that the move risks igniting a trade war and cause global economic uncertainty as the US and China are the world’s two largest economies.

Despite these concerns, Lee said the JS-SEZ continues to attract investments from western firms, including those based in the US.

He added that recently, Microsoft acquired several plots of land from two developers in Johor to expand its data centres.

“The investments made by Microsoft showed that there are tech companies not only from United States or other western countries, but also from within Asia setting up their data centres here,” he said.

According to business magazine Forbes, the plot, located within the Nusa Cemerlang Industrial Park, was purchased by Microsoft Payments Malaysia, the company’s data centre arm, for RM119.8mil.

This is the company’s fourth land acquisition in Johor, which has become a hub for data centres.Lee said the US’ tariffs could inadvertently benefit Malaysia.

“Malaysia, in particular the JS-SEZ, could be at an advantage but it is still too early to tell as we need to know what kind of goods that are being imposed with high tariffs,” he said.

He also said that the state government was following the current situation closely so that they would have a clearer picture of what is expected to happen.

“The Johor government will continue to play its role in attracting more foreign investments into the state through the JS-SEZ.

“This is because our target still remains, to attract high-quality investments that will generate thousands of high-income jobs for locals,” he said.

Source: The Star

JS-SEZ still strong despite uncertainty over US tariffs

His Majesty Sultan Ibrahim, King of Malaysia commended the government’s efforts to boost foreign investment in high-tech and digital sectors.

At the same time, His Majesty called for the immediate strengthening of digital infrastructure and the economy, enhanced cybersecurity, and the adoption of the latest technology.

“The government service system must also be upgraded with more efficient and transparent digital technology to combat corruption, abuse of power, and the bureaucratic ‘red tape’ that burdens the people,“ His Majesty said.

Sultan Ibrahim said this during the opening ceremony of the First Meeting of the Fourth Session of the 15th Parliament for the Dewan Rakyat and Dewan Negara here today.

His Majesty also urged the government to continue improving the country’s economic performance.

Expressing satisfaction with Malaysia’s economic and trade growth, he emphasised that the benefits should be enjoyed by everyone and not just certain groups.

“I am grateful to see economic progress, including stronger domestic growth, rising investments, a recovering ringgit, and a low unemployment rate.

“Last year, the gross domestic product grew by 5.9 per cent across various sectors, while total trade surpassed RM2 trillion in the first nine months,” he said.

Sultan Ibrahim also called for continued efforts to empower Bumiputera economic participation, with the support and collaborations with government-linked companies .

The Dewan Rakyat session will run for 18 days starting today, while the Dewan Negara session will begin on March 3 and last for 13 days.

Source: Bernama

King lauds govt’s efforts to boost foreign investment in tech, digital sectors

Uzbekistan’s President Shavkat Mirziyoyev will visit Malaysia on February 4 to 5 for an official trip, according to the Uzbekistan National News Agency (UzA).

The visit, made at the invitation of Malaysian Prime Minister Datuk Seri Anwar Ibrahim, will focus on further strengthening relations between Uzbekistan and Malaysia.

Mirziyoyev’s itinerary is packed with high-level engagements, including bilateral talks with Anwar, meetings with top executives of leading Malaysian companies, and participation in a joint business forum.

The agenda of the high-level talks will focus on deepening bilateral relations and expanding practical cooperation, particularly in key areas such as trade, investment, innovation, technological collaboration, petrochemicals, electronics, green energy, smart agriculture, and tourism.

Both leaders are expected to place special emphasis on enhancing cultural and humanitarian exchanges.

In addition, the leaders will discuss key issues of international politics and regional cooperation.

Following the visit, a joint statement is expected to be adopted, along with a comprehensive package of agreements, aimed at strengthening the full-scale partnership between the two countries.

Leading up to the visit, a series of preparatory events is being held in Malaysia, including a meeting of leading analytical and research institutions, presentations showcasing Uzbekistan’s tourism potential and cultural heritage and a forum of rectors from top universities in both countries. 

Source: Bernama

Uzbek President to embark on official visit to Malaysia

AI is projected to contribute RM530b to the economy by 2030, further strengthening the country’s commitment to lead in digital growth 

MALAYSIA is positioning itself as South-East Asia’s (SE Asia) artificial intelligence (AI) hub, aiming to make AI a cornerstone of its economy by 2030. 

With initiatives like the National AI Roadmap and investments in AI start-ups, research hubs and digital transformation policies, the government is driving AI adoption across key sectors such as healthcare, education and agriculture. 

AI is projected to contribute approximately US$115 billion (RM530 billion) to Malaysia’s economy in five years, according to the Digital Ministry, further strengthening the country’s commitment to leading in digital growth. 

In line with these efforts, RM10 million has been allocated for the National AI Office (NAIO) and RM50 million for AI education under Budget 2025. 

These funds aim to enhance AI coordination, develop regulatory frameworks and create a skilled workforce to drive AI advancements, ensuring Malaysia’s leadership in the region. 

High-value Activities 

Science, Technology and Innovation (MOSTI) Minister Chang Lih Kang said a key initiative supporting AI’s integration various sectors is the introduction of the Strategic Investment Fund, which amounts to RM1 billion. 

“The fund is intended to foster high-value activities in AI, robotics and the Internet of Things, stimulating local talent development and nurturing homegrown innovation. This investment was announced during the prime minister’s speech in the Dewan Rakyat on Oct 18. 

“The Strategic Investment Fund will help Malaysia leapfrog in AI and innovation, making sure local entrepreneurs and tech companies thrive,” he told The Malaysian Reserve (TMR). 

Chang also mentioned that Malaysia has been successful in attracting foreign investments, including major commitments from tech giants. 

A US$2 billion data centre project from Google LLC and a US$2.2 billion investment by Microsoft Corp in cloud and AI services are set to significantly boost the country’s digital infrastructure. 

He noted that these projects are expected to create jobs and enhance Malaysia’s global competitiveness. 

Chang said the government is equally focused on fostering innovation among AI start-ups and research hubs. 

The Strategic Investment Fund and the National Start-up Single Window platform, developed by MOSTI, provide crucial financial support and simplify the process for start-ups to access resources. 

“We are creating a supportive ecosystem for innovation, connecting research institutions, universities and the private sector to accelerate the development of AI technologies,” he said. 

The integration of AI in key sectors is also a priority. The National AI Roadmap identifies agriculture, education, healthcare, smart cities, transport and public services as strategic areas for AI adoption. 

In agriculture, AI-powered tools are being introduced to enhance precision farming, while in education, personalised learning solutions are being developed. 

“AI is transforming how we approach every sector, from farming to healthcare, making Malaysia an example of how AI can drive sustainable growth,” Chang said. 

The government is also tackling the challenges posed by AI adoption, especially workforce displacement and the need for skill development. 

Malaysia’s upskilling and reskilling programmes are designed to equip workers with the skills necessary for emerging digital and AI-driven industries. 

Collaboration between MOSTI, the Human Resources Ministry and agencies like Malaysia Digital Economy Corp (MDEC) is crucial to the success of these programmes. 

“We are preparing our workforce to take on new roles in AI, data analytics and other tech-focused sectors, ensuring they are not left behind in this digital revolution,” Chang said. 

In addition, the government is integrating AI and digital literacy into national education, with universities and technical schools offering dedicated programmes in AI and automation. 

Education reforms are a key part of the strategy to ensure the next generation is ready for the AI-driven future. 

Malaysia’s AI strategy is designed to address workforce displacement and skill development through a multi-pronged approach that includes upskilling programmes, educational reforms, industry-specific support and public-private collaborations. 

The aim is not only to protect workers from the negative impacts of AI but also to equip them with the skills and opportunities needed to thrive in the evolving digital economy. 

Challenges and Opportunities 

A Mimos Bhd researcher said Malaysia’s AI strategy, as outlined in the nation’s AI Roadmap, revolves around several key components designed to strengthen the country’s position in the rapidly evolving digital landscape. 

“The roadmap focuses on developing strong policies to guide AI development, boosting research and innovation, building a skilled AI workforce, and promoting AI awareness and use across all sectors,” the researcher told TMR. 

One of the industries benefitting from this strategic focus is healthcare, where AI is improving diagnostics, streamlining operations and even supporting remote patient care. 

The researcher added that in healthcare, AI’s potential to enhance precision medicine and predictive analytics is immense. 

In manufacturing, AI’s role in improving efficiency and driving growth has been transformative. 

It enables more accurate quality inspections, predictive maintenance and reduces costs, which ultimately boosts industry competitiveness. 

The transport sector, too, has seen AI’s impact, particularly in enhancing traffic management and optimising energy consumption. 

AI is crucial for supporting smart cities and sustainable development goals, such as waste reduction and energy efficiency. 

The researcher added that enhancing the country’s digital infrastructure to support AI applications is crucial for ensuring reliable connectivity. 

Malaysia also faces significant challenges in becoming a leader in AI, with a major hurdle being the shortage of skilled talent. 

To tackle this, efforts to reskill the workforce and attract global experts are key. 

“Expanding industry-based AI education programmes will also be a critical component of overcoming this challenge,” he said. 

Another significant concern is the need for stronger infrastructure to support AI training and data processing. 

While data centres are being developed, there is a need for more robust infrastructure to fully leverage AI’s potential. 

Data privacy is another crucial issue, with the Personal Data Protection Act playing an essential role in ensuring responsible AI use. 

Additionally, promoting ethical AI practices, reducing bias and ensuring transparency are critical for fair and trustworthy AI adoption. 

Bridging Financing Gaps 

Malaysia Debt Ventures Bhd (MDV) CEO Rizal Fauzi said Malaysia’s AI ecosystem offers substantial opportunities across multiple sectors, including healthcare innovation, agritech (agriculture technology), fintech (financial technology), regtech (regulatory technology), green technology and smart manufacturing. 

He explained that these sectors leverage AI-driven solutions to address industry challenges and unlock efficiencies, creating a fertile ground for innovation and investment. 

He also mentioned the government’s initiatives to support AI development, such as the National AI Roadmap and targeted incentives. These efforts include the AI Sandbox Programme, which fosters the development of start-ups and aims to establish 900 AI companies and train 13,000 AI talents by 2026.

He noted that the AI Talent Roadmap 2024-2030 focuses on building a skilled workforce to enhance Malaysia’s global competitiveness. 

Moreover, Malaysia holds a competitive position in SE Asia, supported by a strong foundation of talent, robust infrastructure and stable policies. 

“Malaysia’s unique advantage lies in its balanced approach to affordability, scalability and market-readiness. 

“This positioning not only attracts investments but also fosters collaboration, reinforcing Malaysia’s role as a key player in AI innovation and adoption,” he told TMR. 

He touched upon the challenges Malaysia faces compared to regional players like Singapore and Indonesia, such as talent retention and access to international capital. 

However, these gaps are being addressed through national efforts to scale research and development initiatives, and strengthen the talent pipeline. 

“MDV plays a pivotal role in bridging financing gaps for start-ups, further solidifying Malaysia’s AI ecosystem and enhancing its regional standing,” he added. 

Overcoming Misconceptions 

Industrial digital intelligence Agytek Sdn Bhd CFO David Xiong noted that the government is attracting a huge amount of investments into AI-related industries, providing opportunities for start-ups to participate in this surge of growth. 

He said initiatives such as NAIO have been created in a timely manner to support and consolidate these efforts. 

One of the biggest challenges AI start-ups face in Malaysia, he said, is the perception and understanding of AI among the general population and businesses. 

“During our client engagement, we have come across many cases where customers have, to a degree, an inaccurate understanding of AI. 

“Simpler technology such as rule-based approaches are being perceived as AI, which is really not. This creates additional challenges for companies like ours, which are going for real machine learning capabilities, as we are effectively competing in an unfair style,” he said. 

Furthermore, Xiong explained one of the biggest resource requirements for AI is graphics processing unit (GPU) computing power, and Malaysia is uniquely positioned to become a GPU hotspot in the upcoming months and years, as proven already by the huge amount of investment pouring into this sector. 

However, more importantly, Malaysia has one of the most diverse economic structures within ASEAN, which provides training grounds in practically every single application scenario, fostering a more innovative social culture. 

Xiong said Malaysia’s position as a hub within ASEAN gives it a significant edge for AI start-ups. 

“As a hub in ASEAN, businesses proven in Malaysia are well-positioned to venture into other regional countries, which gives Malaysia an edge as the place of choice for AI start-ups,” he added. 

Talent and Infrastructure 

New Digital Sdn Bhd CEO and founder Nhu Nguyen said the company is committed to supporting Malaysia’s ambition to become a regional AI hub by 2025, focusing on research and development to create cutting-edge AI solutions. 

In terms of collaboration, Nguyen explained that New Digital is actively engaging with various sectors and government bodies. 

New Digital is a tech agency mainly focused on ticketing solutions for industries such as fleet, transport, hotels and tours, as well as virtual event platforms. On top of that, it offers AI solutions for customer service and sales inquiries. 

Nguyen said the company is keen to contribute to Malaysia’s digital transformation by integrating AI in these sectors. 

In terms of scaling operations and attracting talent, she said New Digital is taking proactive steps to ensure sustainable growth. 

“We invest in AI infrastructure and collaborate with universities to nurture local talent through special programmes. 

“We also partner data experts and AI academies to drive innovation together. The company is working with government initiatives such as MDEC’s Malaysia Digital Status Network and promoting Malaysia as a strategic tech hub,” she added.

Source: The Malaysian Reserve

Malaysia lays roadmap for regional AI hub

The Forest City Special Financial Zone (FC-SFZ) is seeing a surge in interest from prominent companies, signalling its promising trajectory as a burgeoning financial hub. 

Eleven companies, including eight family offices from Malaysia, Singapore, Indonesia and Taiwan are keen to establish operations within FC-SFZ. 

Among them are logistics giant Tiong Nam Logistics Holdings, developer AME Elite Consortium Bhd and investment firm Wan Li Holdings.

Asset management heavyweights CIMB Group Holdings Bhd and China’s Galaxy Securities Co Ltd have expressed intentions to set up operations in the area.

The SFZ’s strategic focus includes sectors such as banking, financial services, logistics and global services.

Malaysia’s banking giant Malayan Banking Bhd is not hesitating to jump on the bandwagon, aiming to establish itself as the preferred bank for both local and international businesses in the zone.

Maybank president and group chief executive officer Datuk Khairussaleh Ramli said the bank is committed to becoming the preferred financial institution for Malaysia-Singapore financial transactions and solutions, which aims to foster economic integration and bolster regional growth.

Khairussaleh added that Maybank is set to facilitate cross-border trade, fast-track loans and offer seamless financial solutions.

Maybank is also enhancing digital payments and will open a “phygital” branch in Forest City.

With 37 branches in Johor and 18 in Singapore, Maybank has mobilised RM104.89 billion in sustainable finance since 2021. Its shares rose six sen to RM10.16, valuing the bank at RM122.6 billion.

 Meanwhile, Johor Menteri Besar Datuk Onn Hafiz Ghazi said to bolster FC-SFZ’s appeal, the federal government has introduced a suite of incentives, including a zero per cent tax rate for single-family offices, a concessionary corporate tax rate between zero and five per cent, and a special individual income tax rate of 15 per cent for knowledge workers and Malaysians opting to work in Forest City.

These measures aim to attract international capital and position Forest City as a preferred investment destination. 

Onn Hafiz told Business Times the SFZ will focus on two key sectors mainly banking and financial services and logistics, global services and relocation services.

Banking and financial services, including investments, insurance, financial technology (FinTech), regulatory technology (RegTech) and insurance technology (InsurTech)for both conventional and Islamic banking, will be based on Forest City Island 1.

Logistics, global services, and relocation services will be cantered on Forest City’s mainland, supported by customer support, product development, marketing, finance, and accounting.

The ambitious megaproject Forest City, is a joint venture between Esplanade Danga 88, an affiliate of state government subsidiary Kumpulan Prasarana Rakyat Johor, through a joint venture, Country Garden Holding Ltd (CGPV), with CGPV holding 60 per cent of shares, while KPRJ holds the other 40 per cent.

CGPV deputy president Syarul Izam Sarifudi said Forest City is poised for further economic growth in this year, following its designation as a tax-free zone last November.

Its SFZ, duty-free status and integration with the Johor-Singapore Special Economic Zone (JS-SEZ) are expected to boost Johor’s economy and attract global investors.

To engage stakeholders, Forest City has launched investor seminars, including a recent session on Malaysia’s only zero per cent tax single-family office. 

He said pre-bookings for commercial units in Cerulean Bay have also begun, featuring flexible office and retail spaces.

Interest from financial institutions has grown, with a Johor delegation, led by Onn Hafiz’s recent visit to Dubai’s International Financial Centre to gain insights. 

Syarul said investors, particularly in artificial intelligence (AI), expressed interest in setting up in the SFZ.

Infrastructure upgrades are also in progress. 

Forest City plans to expand transport links, including new weekend and holiday bus services with Causeway Link to Kuala Lumpur, as well as improvements to cycle lanes and connectivity with Johor Baru’s transit system.

“With strategic incentives and global positioning, Forest City is emerging as a key investment hub in Asean, driving job creation and economic expansion,” he said.

Despite these advancements, industry experts have identified areas requiring further enhancement to attract a broader spectrum of investors.

Key concerns include the need for improved infrastructure, enhanced security measures, streamlined customs procedures, currency harmonisation, and the facilitation of free capital movement. 

The Malaysian Investment Development Authority reported that connectivity between Malaysia namely Johor and Singapore needed to be further enhanced. 

Singapore head of global banking at Maybank Gregory Seow said a clear navigation between state and federal approvals is crucial for seamless project execution. 

“Forest City is supposed to be the administrative headquarters, and the authorities are proposing a financial hub. But connectivity is required,” Seow was reported saying. 

“Some projects require just Johor state’s approval, some may need federal approval. That complicates the issue. I hope they have navigated those issues back in April. Prime Minister Datuk Seri Anwar Ibrahim also demonstrated his support. Banks like ourselves want to be the go-to bank,” Seow said.

“One of the projects that requires federal approval is Johor’s Autonomous Rapid Transit (ATS) system which is required to link commuters from the Johor-Singapore Rapid Transit System (RTS) that is operational from end-2026.

“More importantly, our Singapore-based clients have signalled interest. Last month, I had a chairman-level lunch with a very established conglomerate in Hong Kong.

“They signalled their interest in obtaining a piece of land in Johor and getting contracts. 

“The Chinese companies are debating whether they should go to the Eastern Economic Corridor in Thailand, or here,” Seow said.

“Hopefully we are not let down by the political agenda,” he added.

In September 2024, Finance Minister II Datuk Seri Amir Hamzah Azizan announced a package of incentives to make Forest City a magnet for international capital.

This included attractive rates for single-family offices, concessionary corporate and a special individual income tax rate for knowledge workers and Malaysians who choose to work in Forest City.

Source: NST

Forest City SFZ gains momentum to attract ‘giant’ investors

by IFAST RESEARCH TEAM 

Malaysia, Singapore pledge financial support to promote JS-SEZ’s development 

THE Johor-Singapore Special Economic Zone (JS-SEZ) was formalised through a memorandum of understanding in January 2024, and a formal agreement has now been signed between Malaysia and Singapore.

With increasing clarity on its development, we are confident that JS-SEZ will be instrumental in driving regional economic expansion. 

We believe it will be a transformative force for domestic economic growth and a key investment theme that investors should closely watch in the near future. 

In addition to the initially proposed six key zones, JS-SEZ now includes three additional areas: Forest City, Pengerang Integrated Petroleum Complex and Desaru. The zone covers a wide range of sectors, including business services, the digital economy, healthcare, manufacturing, energy, logistics, education, tourism, food security, financial services, aerospace, electrical and electronics, chemicals, medical devices and pharmaceuticals. These sectors build upon those previously highlighted by the Iskandar Regional Development Authority (IRDA) in the earlier phase of Iskandar Malaysia. 

Plans for implementing QR code clearance and passport-free travel to streamline cross-border movement and reduce delays at checkpoints are still under consideration. Meanwhile, the Malaysian government has confirmed various financial incentives, such as reduced corporate tax rates for companies investing in the zone and preferential personal income tax rates. Additionally, both Malaysia and Singapore have pledged financial support to promote the development of JS-SEZ. 

Poised to Become Johor’s Economic Growth Engine 

In 2023, Johor’s GDP stood at RM148.2 billion, making up about 9.6% of Malaysia’s total GDP. The manufacturing and service industries contributed nearly 80% of this figure. Through the Maju Johor 2030 economic plan, the state aims to boost its GDP to RM260 billion by 2030. This target requires an annual growth rate of 8.4% from the 2023 level, notably higher than the five-year average growth rate of 5% between 2019 to 2023. 

Nonetheless, we hold a sanguine view that the target growth rate is achievable as JS-SEZ that fosters closer collaboration between two nations could serve as an engine to boost economic growth. 

Also, we foresee increased foreign direct investment (FDI), enhanced trade opportunities and the creation of high-value jobs as key outcomes. Additionally, the focus on infrastructure development and streamlined regulatory processes will likely attract both multinational corporations and local enterprises. 

Key sectors such as aerospace, electronics, and pharmaceuticals are expected to play a significant role in achieving this goal. With the help of strategic policies and incentives, Johor hopes to foster economic growth and replicate the success of prominent special economic zones around the world. 

The strategic collaboration, supported by fiscal incentives, infrastructure development, and streamlined regulatory processes, will not only benefit Johor’s economy but also enhance the economic ties between Malaysia and Singapore. As such, these sectors’ earnings could be propelled by the greater connectivity between the two countries. 

Malaysian Banks, Construction and Property Lead as Biggest Winner

The development of JS-SEZ is expected to benefit Malaysian banks by driving demand for loans from both local businesses and multinational corporations involved in infrastructure and commercial projects. Government incentives for small and medium enterprises (SMEs) expanding in the zone could further boost SME financing. Additionally, the influx of businesses and high-net-worth individuals will create opportunities in wealth management and investment services. Overall, the heightened economic activity will enable banks to generate more non-interest income from advisory, transaction banking and cash management services. 

Focusing on public transportation will also benefit contractors involved in railway construction and solar panel installation. We believe the construction sector will be the primary beneficiary, with many local firms likely to secure more contracts, unlike projects such as Forest City, which were largely developed by Chinese companies. 

The revival of private investment, supported by key public sector initiatives, offers substantial medium-term opportunities for order book expansion in the construction sector. Despite the high-speed rail announcement being perpetually postponed until further notice, we opine the orderbook from data centres and city development-related projects may continue to boost the sector’s earnings in the next couple of years. 

The property market, especially those with significant land reserves in the southern region, is set to gain from enhanced cross-border mobility, driving increased demand for properties in the area. Additionally, the basic materials sector is expected to see a boost from these construction projects, with cement being our top pick due to its strong domestic market presence. 

Singaporean Banks, Manufacturers have New Opportunities 

Similar to Malaysian banks, we posit Singaporean banks will benefit from the development, too. Over the past five to six years, Singaporean banks have focused on regional integration of wholesale and retail banking, positioning themselves to support supply chain shifts from North Asia to ASEAN. A strategic partnership between Johor and Singapore, aimed at improving business operations, labour mobility and capital flows, could open new opportunities for banks to leverage their integrated platforms. 

Initiatives for multinationals and government-funded SME expansions in JS-SEZ are expected to drive credit demand and non-interest income through advisory services, transaction banking and cash management. Additionally, increased cross-border spending should boost credit card fee revenues, while shifting back-office operations to Johor could enhance cost-to-income ratios due to lower labour and rental expenses. 

We remain optimistic about Singaporean technology and industrial manufacturers. The zone’s cost-efficient infrastructure, improved connectivity and focus on green investments and semiconductors are expected to benefit manufacturers. Singa-pore-listed firms could gain from tax incentives by establishing production in JS-SEZ, accessing a more affordable talent pool. 

Priority sectors such as life sciences, aerospace and electronics are also likely to benefit from tax advantages and other incentives, enhancing their growth prospects. 

Key Takeaway 

We believe JS-SEZ could draw inspiration from the success of the Shenzhen SEZ. This economic cooperation between Malaysia and Singapore is poised to benefit both nations significantly. As export-oriented countries and major tourist destinations, the enhancements in trade flows and incentives provided by JS-SEZ are expected to stimulate economic activities in both nations. 

Furthermore, their relatively neutral geopolitical stance may offer a haven for companies looking to diversify their supply chains amid escalating geopolitical risks. 

Although JS-SEZ has been highly anticipated and the agreement with Singapore is now finalised, the execution part will still be crucial. Besides, the final missing puzzle — Kuala Lumpur-Singapore HSR is still undergoing discussion as the government is collecting proposals from private companies to revive the project, which could be the next game changer for JS-SEZ if it materialised. 

Source: The Malaysian Reserve

JS-SEZ: From south to regional growth, prosperity

The Ministry of Investment, Trade and Industry (Miti) needs to intensify efforts in formulating strategies to ensure the trade and investment target of RM13 billion at the World Expo 2025 in Osaka, Japan, (Expo 2025 Osaka) is achieved.

Deputy Prime Minister Datuk Seri Fadillah Yusof said this includes ensuring the signings of the memoranda of understanding lined up for 2025 at the Malaysia Pavilion are held on schedule, which could contribute to achieving the set target.

“Miti, together with the Malaysian Investment Development Authority (Mida), and especially the Malaysia External Trade Development Corporation (Matrade) as the business programme coordinator, must increase efforts in formulating strategies to ensure the nation’s success in reaching this target.

“I hope that the programmes and activities held at the Malaysia Pavilion, whether in the business or non-business categories, can help us achieve the target of attracting about 1.5 million visitors to the pavilion,” he said in a Facebook post after chairing the year’s first National Organising Committee Meeting for Malaysia’s World Expo 2025 Osaka Participation on Tuesday afternoon.

Among those present were Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, Communications Minister Fahmi Fadzil, and Minister in the Prime Minister’s Department (Federal Territories) Dr Zaliha Mustafa.

Expo 2025 Osaka will be held for six months from April 13 to Oct 13, 2025.

Fadillah said significant progress has been achieved in terms of the Malaysia Pavilion’s procurement, with construction work reaching 86.7% completion as scheduled.

“I have high hopes for Malaysia’s participation in this expo, with the pavilion currently in the final phase of development, and our transition to preparing for operations.

“This is crucial to ensure that the Malaysia Pavilion can operate at optimum level throughout the period of the expo,” he said.

He expressed hope that this year will witness the committee members’ outstanding achievements in supporting Malaysia’s role and responsibilities as Asean chair, as well as in its participation in Expo 2025 Osaka.

Source: Bernama

MITI must intensify efforts to achieve RM13b trade and investment target at World Expo 2025 in Osaka — Fadillah