Projected Economic Benefits and Job Creation from Johor-Singapore Special Economic Zone Cooperation

1 Mr Saktiandi Supaat asked the Deputy Prime Minister and Minister for Trade and Industry (a) what are the projected economic and job creation benefits and which sectors will benefit from the Johor-Singapore Special Economic Zone (JS-SEZ); (b) whether the Government is concerned that some sectors will be adversely affected and certain investments and firms will relocate to JS-SEZ; and (c) whether there are Government incentive schemes such as productivity grants or investment incentives that can be extended to Singapore companies investing in the JS-SEZ.

The Minister of State for Trade and Industry (Mr Alvin Tan) (for the Minister for Trade and Industry): Mr Speaker, Sir, the Johor-Singapore Special Economic Zone (JS-SEZ) seeks to capitalise on the complementary strengths of Singapore and Johor to strengthen Singapore's competitiveness and to create good jobs for Singaporeans. Businesses across sectors including manufacturing, logistics and digital economy can benefit from the improved cross-border flow of goods and people, and ease of doing business in the JS-SEZ.

Many Singapore-based companies already have twinning operations in Singapore and Johor. Firms could benefit from siting some of their operations in Johor to take advantage of the resources there, whilst focusing headquarters and research functions in Singapore, where we have relative strengths. For instance, South Korea's SPC Group, the parent company of Paris Baguette, operates its regional headquarters and innovation centre in Singapore, while its regional production base is in Johor.

We can also jointly attract new investments to the JS-SEZ, which may establish operations in Singapore or tap on the services provided by Singapore. For example, Agrocorp, an agri-commodities and food ingredient firm headquartered in Singapore, recently expanded its downstream capabilities in plant protein extraction with a new plant with its Japanese partner in Johor. This plant will use protein extraction technology developed by Agrocorp and the Singapore Institute of Technology. These investments in Johor create value for the Singapore economy as our firms grow.

I caught up with the Singapore Business Federation (SBF) recently and they told me that over 100 Singapore firms will be joining the SBF business mission to the JS-SEZ later this month. So, there is also considerable investment interest there.

In that vein, we will continue to support businesses in Singapore through existing enterprise support schemes. Eligible Singapore companies investing in the JS-SEZ can seek support from schemes such as the Market Readiness Assistance Grant and Enterprise Financing Scheme administered by Enterprise Singapore. Malaysia has also announced an incentive package for the JS-SEZ, including special corporate and income tax rates for qualifying investments, and intend to announce more details when ready.

Mr Speaker: Mr Saktiandi.

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Speaker, thank you. I thank the Minister of State for his answer. I have a few supplementary questions. First, in relation to the Parliamentary Question that I had filed, I would still like to get the Minister of State's response whether the Government is concerned that some specific sectors will be adversely affected, whether certain investments or companies and firms will likely relocate to the JS-SEZ as a result of the JS-SEZ, and whether there are any projections of job creation numbers that the Ministry of Trade and Industry (MTI) has in relation to the JS-SEZ within the first phase and future phases.

Second, the Minister of State mentioned about Malaysia introducing some incentives. I have read that the Malaysian Investment Development Authority's incentives cover sectors such as manufacturing, chemicals, global services hub, integrated tourism projects and smart logistics. These are also some projects that Singapore wants to cover. There are also incentives for knowledge workers. Will there be mitigation measures to make sure that some of the investments that were intended to come into Singapore will not be affected.

Lastly, I have got some feedback about concerns from some sectors including the transport association where I am an advisor to. These are concerns about whether there is some impact on the transport and logistics sectors and how they might be affected by Malaysian logistics coming into Singapore.

Mr Alvin Tan: Sir, I thank Mr Saktiandi Supaat for his questions. Indeed, these are views that we have also gotten on the ground in our frequent interactions with businesses across different sectors. I have met SBF very regularly, including last week when a lot of the same views that have been shared by the Member were also shared by SBF. I was also recently in Johor, visiting the zone, meeting with Malaysian leaders. So, the discussions are ongoing. More details will be released. And we are monitoring all the impact that the JS-SEZ will have on both sides.

I wanted to take a step back and look at it from a bigger perspective and what the JS-SEZ has to offer. If we look at the global economic landscape, it is increasingly uncertain, it is dynamic, it is ever-changing. The global competition as we have seen over the last couple of weeks has intensified for talent, for trade and also for investments. So, it is imperative that if Singapore wants to be competitive, we need to be more nimble, we need to be more innovative, we need to enhance our competitive game. If executed well, the JS-SEZ will give us that additional competitive edge. It will give us the opportunity and in fact, it would give us the impetus to build on our inherent strengths. These inherent strengths are not that easy to replicate. These have been grown over decades. They are quite uniquely Singaporean. And they give Singapore that competitive edge.

These traits are inherent. For example, the strong rule of law, regulatory and political stability, innovative mindset, talent, research and development, connectivity and a strong financial centre.

First, it gives us the opportunity and impetus to build on where we are already strong, but it also gives us that impetus to make sure that what we already have, we must strengthen so that we continually have that competitive edge.

Second, the JS-SEZ will also give us the opportunity to leverage on Johor's strengths to overcome our inherent weaknesses. The weaknesses or disadvantages are well-known to everybody – it is our land, it is our manpower, it is our natural resources. So, it gives us the opportunity to build on our strengths and also to leverage the SEZ's strengths to be able to increase our competitiveness.

What is the final objective for this? The final objective is to attract new companies, new investors that hitherto may not have considered Singapore as an investment destination or potentially even maybe, Singapore is a little bit lower on their list of places to invest. It gives businesses a value proposition that hitherto may not have been there in the first place but are now then attracted to this value proposition.

To the Member's question earlier on, as I mentioned in my original reply, there are already Singapore firms that are already there, they are sited there. In our discussions with many of the Singapore firms, they do intend to have operations on both sides. They are looking at the landscape and they will make those decisions in due time. But I think the value proposition, both for the SEZ as a whole, and the unique relative and complementary strengths for both Singapore and Johor, are quite evident.