JS-SEZ awaits Singapore buy-in

WHILE the Johor-Singapore Special Economic Zone (JS‑SEZ) holds vast potential, it is notable that no major Singapore corporate heavyweights have yet announced participation.

One reason could be that the final blueprint and masterplan have yet to be completed.

What was expected to be finalised this month has now been delayed for unclear reasons, possibly reflecting uncertainties linked to the Middle East conflict.

Some reports suggest the conflict could, in fact, boost investment interest in the JS-SEZ – particularly in data centres – following attacks on infrastructure in the afflicted region.

However, Malaysia needs to tread carefully, considering our own constraints in water and electricity, which are already struggling to cope with the committed data centre investments.

This raises a broader question: why have Singapore’s large corporations remained on the sidelines?

Without their participation, the JS-SEZ may struggle to realise its ambition of becoming a hub for high-value economic activity.

Earlier discussions between Malaysian and Singaporean officials reportedly included a banking and finance track.

Singapore had advocated for DBS Group Holdings Ltd, the country’s largest bank and also the largest in South-East Asia, to establish a stronger presence in the JS-SEZ, potentially via its proposed acquisition of Alliance Bank Bhd.

But as it stands, this has not been given the greenlight to proceed.

The likely reason for this is Malaysia’s already significant exposure to Singaporean banks, including United Overseas Bank Ltd and Oversea-Chinese Banking Corp Ltd, raising concerns over concentration risk.

It is hoped that the lack of approval for DBS should not become a stumbling block to Singapore’s broader buy-in of the JS-SEZ, which offers far greater mutual benefits beyond banking.