The task force studying the zone is scheduled to give a progress update at the 10th Singapore-Malaysia Leaders’ Retreat to be held in Singapore later this year.
In his announcement last Friday, Mr Anwar did not specify if the SFZ at Forest City refers to this economic zone being discussed between Singapore and Malaysia.
CNA has reached out to Singapore’s Ministry of National Development as well as Malaysia’s Ministry of Economy on whether the special zone raised during the JMCIM will be located at the Forest City project, and if so, whether there is a timeline for when the zone will be developed and completed.
JBCCI’s Mr Low said the project will be pulled off only if it is backed by both federal governments.
“The SFZ promises things like fast track entry for workers – this will only be feasible if both countries are willing to play ball,” said Mr Low.
“The Malaysia government must also help the developer make the zone business friendly – set up the right amenities and infrastructure for companies to move in, open their plants and make money.”
He noted that a similar special economic zone was set up in 2009 by then prime minister Najib Razak in Terengganu and Pahang to draw China investment into the east coast of peninsular Malaysia. The area is called the Eastern Corridor Economic Region Special Economic Zone (ECER SEZ).
Mr Najib had said then that the 140 kilometres by 25 kilometres area would create 220,000 jobs by 2020. The zone had special incentives such as a 10-year tax exemption as well as exemptions from import and export duties.
Media reports have cited how the zone has industrial parks for automotive manufacturing as well as the halal product industry.
However, there has been no confirmation from the Malaysia government on whether the zone has indeed met its employment target by 2020.
Mr Low claimed that the zone has not sustained the test of time.
“From what I hear from my business colleagues in the east coast, this zone has not brought benefits to the local business community, and many foreign firms have also moved out,” he said.
Economist Walter Theseira from the Singapore University of Social Sciences (SUSS) noted that this concept of a special financial or development zone in Malaysia to take advantage of Singapore’s proximity, as proposed by PM Anwar, is not new.
He cited how the Sijori growth triangle, consisting of economic cooperation between Singapore, Johor and the Riau islands, was first announced from 1989, and that the benefits have been uneven.
Assoc Prof Theseira added that while there is some evidence that these cross-border efforts have led to complementary growth, he stresses that there are concerns that the growth has not been enough in “high value-added sectors” for the regional economies of Indonesia and Malaysia.
“Generally speaking, Singapore continues to be preferred for the high quality business environment here and the availability of specialised business, legal, and financial services, whereas the region has advantages in natural resources, land and labour costs,” he said.
“What the regional economies outside Singapore naturally hope for is to acquire a larger slice of the high value added pie over time, but it is unclear if these special zones have helped achieve those objectives.”
BUSINESSES CONCERNED WITH FOREST CITY’S VIABILITY
Additionally, industry players are still uncertain that the SFZ would truly materialise and be a practical move for them to set up operations, especially given the slow pace of construction over the last eight years as well as the developer’s Country Garden holdings parent company debt woes.
The debt crisis at Country Garden in China has made global headlines as the firm had been the country’s largest developer by sales value before 2023.
Earlier this month, Country Garden Holdings suspended trading in nearly a dozen onshore bonds, paving the way for debt negotiations and a possible restructuring, as its share price plummeted.