Johor has right ecosystem to attract best investors
24 Jul 2023
JOHOR needs to review its strategies to continue attracting quality as well as capital-intensive and high-tech investments into the state, say business leaders.
Iskandar Malaysia Chamber of Commerce and Industry secretary-general Md Salikon Sarpin said the state had the right ecosystem to attract world-class investors.
Though Johor was not listed as among the four states which outperformed the country’s gross domestic product (GDP) growth and surpassing the national average in 2022, he said it was not a setback.
“It should drive Johor to work even harder to continue developing and positioning itself as the top investment destination in Malaysia,” he added.
He was commenting on the report by the Statistics Department which listed Penang (13.1%), Selangor (11.9%), Pahang (10.8%) and Kuala Lumpur (9.2%) outperforming the country’s GDP.
The department said the four states’ growth contributed significantly to the country’s overall progress, surpassing the national average in 2022. Malaysia’s GDP grew to 8.7% last year.
The report also stated that the manufacturing sector was the key economic driver for Penang with its electrical, electronic and optical products, and increased global demand for semiconductors.
Meanwhile, Selangor, Pahang and Kuala Lumpur experienced rapid growth in the services sector including the wholesale and retail trade, food and beverage and accommodation.
“All is not lost for Johor as we have our own strengths and advantages to attract quality investments to our shores,” said Md Salikon.
He said this was proven when Johor attracted the most foreign direct investment (FDI) in the country with RM70.6bil last year, from RM6.8bil in 2020 and RM7bil in 2021.
Selangor came in second with RM60.1bil, followed by Sarawak (RM28.2bil), Kuala Lumpur (RM25bil) and Penang (RM16.3bil).
“Johor can attract more multinational corporations (MNCs) involved in manufacturing digital electronics and electrical products for export,” said Md Salikon, adding other industries that the state could focus on included green technology, agro-based and halal products.
Johor South SME Association advisor Teh Kee Sin said it was shocking that Johor did not make it to the top four under the Statistics Department’s GDP report.
“Johor has always come out top three for the past 10 to 15 years. I do not know what went wrong this time,” he said.
Teh said that since the state was out of the top four list, the Johor government needs to work harder to attract more FDI.
He said Johor was strategically located in the Singapore-Johor-Riau (Sijori) Economic Region established in 1989 – later renamed the Indonesia-Malaysia-Singapore Growth Triangle.
“We are not taking advantage of the Growth Triangle to boost the economic performance of the region,” said Teh.
He said Johor should also take advantage of Singapore’s position as an international metropolis to attract MNCs in the republic to relocate their manufacturing activities to Iskandar Malaysia.
Similarly, Iskandar Malaysia was a good location for Singapore-based SMEs to relocate their manufacturing activities to expand their business.
He also urged the state government to review the function of the Johor Economic, Tourism and Cultural Office (Jetco) in Singapore as it is not functioning well to attract investments from Singapore.
“Jetco needs to build a strong connection with international firms in Singapore or even the Singapore government, to promote Johor as an investment destination,” he said.
At the same time, the state government needs to discuss with the Iskandar Regional Development Authority (Irda) on strategies to attract capital-intensive and high-tech investments, he added.
Teh said that after the Covid-19 pandemic, many China and Japan companies were looking to invest elsewhere in the region and Johor needed to act fast to attract them.
“If we don’t act fast, we will lose to other countries in the region, especially Indonesia and Vietnam which are aggressively attracting investors,” he noted.
Source: The Star