• Third largest state economy in Malaysia

• Almost one third of Malaysia’s total trade through Johor

• Johor the largest beneficiary of non-resident of Singapore

• JS-SEZ is about five times of Singapore

• Malaysia & Singapore committed for 100 projects

• 9 Flagship Zones with 11 Targeted Sectors

Johor-Singapore Special Economic Zone (JS-SEZ): Strengthening Bilateral Cooperation Towards Uplifting Growth Potentials. After one year from the signing of Memorandum of Understanding the JS-SEZ, Malaysia and Singapore inked a historic game-changer deal. The agreement was witnessed by both Prime Minister Datuk Seri Anwar Ibrahim and Singapore Prime Minister Lawrence Wong. The initiative aims to boost economic cooperation and prosperity, promote the mobility of people and goods, and strengthen the overall business ecosystem between Malaysia and Singapore. The envisioned models for JS-SEZ are inspired by the Shenzhen Special Economic Zone and the Dubai International Financial Centre.

JS-SEZ is about five times of Singapore. The Johor State Government has finalized the locations for the JS-SEZ within Iskandar Malaysia and Pengerang, encompassing six Local Authorities. Spanning an estimated total area of 3,505.3 km² in Southern Johor, roughly five times the size of Singapore, the JS-SEZ is envisioned as a catalyst to unlock the economic potential of both nations, positioning itself as a global hub along one of the world’s busiest shipping routes.

Third largest state economy in Malaysia. Using 2015 as the base year, Johor contributed 9.5% to Malaysia's GDP in 2023, making it the third-largest state economy after Selangor and Kuala Lumpur. The state's robust economic performance is driven by the expansion of its services sector, alongside resilient agriculture and manufacturing sectors. Johor leads Malaysia in agricultural output, accounting for 17.1% in 2023, and ranks third in manufacturing, contributing 12.0%, after Selangor and Penang.

Data centre, tourism and domestic demand. In 2023, the services sector accounted for 54.0% of Johor's economy, compared to Malaysia's national average of 59.2%. Over half of this sector's activities are tied to tourism, including ICT, transport and storage, distributive trade, accommodation, real estate, and finance. Benefiting from its proximity to Singapore, Johor experiences increased demand for real estate, retail trade, and tourism-related services. Additionally, with better water supply, Johor has become an attractive destination for data centres. The state's manufacturing sector is bolstered by the steady growth of downstream oil and gas activities in Pengerang and an increasing contribution from the electrical and electronics (E&E) industry. Meanwhile, Johor's construction sector is driven by large-scale infrastructure projects, such as the Rapid Transit System Link (RTS Link), the Gemas-Johor Bahru Electrified Double-Tracking Project (Gemas-JB EDTP), and the expansion of highways and road networks.

Source: BIMB Securities Research - 8 Jan 2025