Iskandar Malaysia beats investment target: Najib

Key announcements to come after he meets PM Lee Hsien Loong next month

By MALMINDERJIT SINGH
IN NUSAJAYA, MALAYSIA

MALAYSIAN Prime Minister Najib Razak yesterday announced that the cumulative committed investment into Iskandar Malaysia has reached RM77.8 billion (S$31.9 billion), surpassing its initial five-year target, of RM47 billion by more than 60 per cent.

Mr Najib: Even though 'the prospects for the Iskandar region look brighter than ever', closer links with Singapore could maximise these opportunities for entire region

'So much has been achieved in so short a time, with Iskandar Malaysia already driving the development of a thriving modern metropolis in this southern part of Johor,' said Mr Najib. He was speaking at the fifth anniversary celebrations of Iskandar Malaysia, where he spent the day touring developments in the economic region as well as launching its Five-Year Progress Report.

Ismail Ibrahim, chief executive of Iskandar Regional Development Authority (IRDA), provided a more detailed breakdown of the investments into Iskandar Malaysia. 'Of the total committed investments for the first phase, 59 per cent were domestic investment while foreign direct investment (FDI) made up the remaining 41 per cent, making for a healthy mix of sources of funds.'

According to Mr Ismail, about RM38 billion of the total committed investments have already been actualised and the private sector has played a major role in raising all investments thus far. 'Out of the total cumulative committed investments of RM77.8 billion to date, only RM6.3 billion are funds provided by the government of Malaysia, to fund the development and enhancement of critical enabling infrastructure in Iskandar Malaysia.'

However, he added that the Malaysian government's investment in the region has helped attract more private investments, translating into a ratio of one to 11. 'For every RM1 that the government invests in Iskandar Malaysia, it helps to bring in RM11 of private investment.'

Reflecting this interest from the private sector, 12 new investment commitments were announced yesterday, including a RM100 million agreement with Singapore-based Raffles Campus to develop an international school in Iskandar Malaysia.

While noting the additional 'RM1.73 billion to the current total of RM77.8 billion' these new projects have generated, Mr Najib announced that additional 'RM1.05 billion in projected investments would be generated from the knowledge-economy over the next seven years', as a key pillar of Malaysia's Economic Transformation Programme.

Mr Najib was confident that the private sector participation, domestically and overseas, would allow 'Iskandar Malaysia to continue to thrive' even if growth in this part of the world was set to slow due to the current global economic uncertainties.

'Despite being cautious and preparing ourselves for contingencies, we expect the Malaysian economy to continue growing at a robust 5 per cent in the coming year.'

One of the key strategic imperatives provided in the Five-Year Progress Report to underpin the continued robust growth of the Iskandar Malaysia development over the next five-years and beyond is closer relations with Singapore.

The report said that there was a need to target investors from Singapore and focus on strengthening Iskandar Malaysia-Singapore partnerships in identified growth sectors that can bring mutual benefit so as to attract more capital.

Mr Najib noted this as he said that even though 'the prospects for the Iskandar region look brighter than ever', closer links with Singapore could maximise these opportunities for the entire region. 'Further improvements in links between JB (Johor Bahru) and Singapore will also help create a mutually beneficial economic unit - for in today's increasingly urbanised world, competition is between regions as much as it between countries, and regions must work hard to make themselves truly competitive on a global scale.'

Mr Najib added that due to the strategic location of Iskandar Malaysia, 'there is synergistic complementarity between Iskandar and Singapore' and therefore it makes sense for the two to collaborate in mutually beneficial projects.

He stopped short of identifying these projects and said that these will be announced in January next year when he meets Singapore Prime Minister Lee Hsien Loong for bilateral consultations as there were 'significant announcements to be made then' and he 'did not want to take the shine off them' by talking about them now.

Mr Najib did however say that the resolution of the POA (Points of Agreement) impasse between both countries last year has cleared the way for closer cooperation and that he will be looking to update on initiatives to improve connectivity between Iskandar and Singapore, as well as on an iconic project between both sides in the communique issued when both leaders meet.