The Johor-Singapore Special Economic Zone aims to deepen economic ties, promising streamlined travel, job creation, and cross-border collaboration.

An article published last month by CNBC highlighted the pros and cons of Singaporeans’ relationship with the cross-Causeway city of Johor Bahru here in Malaysia. Some of these Singaporeans have chosen to move to Malaysia while still working in and being connected to Singapore. A condensed and edited version of the article follows:

Sharon Kuok’s story mirrors a growing trend of Singaporeans relocating to Johor Bahru (JB) to enjoy lower living costs while maintaining ties with Singapore. Kuok, who commuted from JB to Singapore for school and later worked in the city-state for over 30 years, now enjoys a more affordable retirement in her Malaysian hometown. Living with her husband and their three dogs, her expenses are about 30–40% lower despite dining out often and purchasing imported groceries.

Kuok explained, “We felt that Malaysia would be a cheaper place to spend our retirement. We picked JB because that’s where I am from and for its proximity to Singapore.”

This shift is reflected in a rising number of JB-based residents commuting daily to Singapore for work. One such individual is Intan Syuhada, a senior director at Messe Berlin Asia Pacific. Many cite Singapore’s high living costs as a major driver of this migration. According to Mercer’s 2023 survey, Singapore ranked as the world’s second most expensive city for international workers, while JB stood at a starkly contrasting 214th.

Looking ahead, the upcoming Johor-Singapore Special Economic Zone (JS-SEZ) and the rapid transit system (RTS) are set to ease cross-border movement, encouraging more Singaporeans to visit or move to Johor. Proposed benefits of the JS-SEZ include passport-free travel, digitised cargo clearance, and the potential creation of 100,000 new jobs in Johor, boosting Malaysia’s economy by $26 billion annually. The RTS, expected by 2026, will transport up to 10,000 passengers per hour in both directions, significantly reducing travel time.

Still, challenges remain. Past efforts to integrate Johor and Singapore’s economies were thwarted by political tensions and competition. This time, analysts suggest, both countries stand to gain. Malaysia’s economy, facing competition from countries like Vietnam and India, could benefit from closer collaboration with Singapore’s advanced industries. Singaporeans who relocate would benefit from the lower cost of living in JB, while also taking some of the pressure off of Singapore’s ever-rising housing costs.

However, concerns about the JS-SEZ persist. Singaporean retail sales could drop by 3–4% due to Johor’s appeal, while JB residents like Kuok worry about rising inflation and changes to their city’s character. She remarked, “I strongly believe JB has to maintain its own character, and being messy and inefficient is one of its charms.”

FAST FACTS

The Johor-Singapore Special Economic Zone (JS-SEZ) is a joint initiative between Malaysia and Singapore to increase economic connectivity and business growth in the region:

• Goal: To improve the cross-border movement of people and goods. 
• Location: Spanning six districts in southern Johor, including Johor Bahru, Iskandar Puteri, Pasir Gudang, Pontian, Kulai, and Kota Tinggi. 
• Focus industries: Logistics, financial and business services, tourism, food security, education, healthcare, the digital economy, energy, and manufacturing.
• Incentives: Special tax arrangements, passport-free clearance, training incentives, and joint events promotions. 
• Benefits: The JS-SEZ is expected to attract foreign direct investment, encourage technology transfer, and stimulate growth across various industries. 

The JS-SEZ was announced in October 2023 during Prime Minister Anwar Ibrahim’s visit to Singapore. The project is expected to encompass 3,505 square kilometers in southern Johor, which is more than four times the size of Singapore.