31 May 2013

Hoping for continuity: Nusajaya is an important component of Iskandar. 

[SINGAPORE] The man who oversaw the development of the Iskandar region in Johor is on his way out following his defeat in Sunday's general election, but observers say the Malaysian special economic zone - in which Singapore is the top investor - is unlikely to be affected for the time being. One reason is that Iskandar Malaysia is governed by the Iskandar Regional Development Authority, a federal statutory body headed by a chief executive whose appointment must first be approved by the Prime Minister. Iskandar - a region spanning 2,217 hectares, about thrice the size of Singapore - lies within Gelang Patah. It was in that very constituency where opposition veteran Lim Kit Siang, the leader of the Democratic Action Party (DAP), defeated long-time Johor Menteri Besar Abdul Ghani Othman by a majority of 14,762 votes. With the fallout of the result still uncertain, there are some question marks over whether there could be changes down the road when it comes to Iskandar's future. Mr Lim, 72, has already indicated that his party plans to solicit views and ideas from residents about Iskandar's future development. Nusajaya - the new state administrative centre of Johor - also falls within Gelang Patah's boundaries and is an important component of Iskandar. It is also unclear at this point as to how the Barisan Nasional (BN) ruling coalition - which saw its dominance in Johor reduced to 21 out of 26 parliamentary seats, down from 25 previously - might react to the results, especially after seeing Mr Othman, who had helmed the state for the past 18 years, ousted. "I think that, presumably, the BN will still pick a new chief minister that will very much support Iskandar and see the plans through," said Bank of America Corp economist Chua Hak Bin, noting that many major investments there have been driven by Malaysia's sovereign wealth fund Khazanah Nasional. Iskandar has secured RM6.32 billion (S$2.61 billion) in investments from Singapore as of last December, largely from the manufacturing sector. In total, Iskandar has received RM106.3 billion in cumulative committed investments from around the world since its inception in 2006. "Given that the incumbent coalition still won the majority of seats in Johor, our preliminary assessment is that there should be economic policy and business continuity even if some investors may continue to be a little cautious in the near term," said OCBC Bank's head of treasury research and strategy Selina Ling.

Business Times, 7 May 13