STRONGER TRADE TIES SEEN
Incoming Singapore PM may use Johor as launch pad for more investments, says analyst
MALAYSIA’S trade and investment prospects with Singapore will likely be bolstered under the leadership of the republic’s incoming prime minister Lawrence Wong.
Economists said they believed that Singapore could further use Johor as a launch pad for investments into Malaysia, particularly given the country’s good relations with His Majesty Sultan Ibrahim, King of Malaysia.
Malaysian Institute of Economic Research economist Dr Shankaran Nambiar expects Wong to continue the trade and investment policies of Singapore Prime Minister Lee Hsien Loong, who will be stepping down next month.
The emphasis would continue to be on growth, meaning that trade and investments could be given serious consideration, he added.
“Wong is expected to devote more attention to attracting foreign direct investment (FDI) and keeping growth on track. This will be more pronounced given the challenging external environment.
“Singapore will want to deepen its trade relations with Malaysia.”
Nambiar said the new prime minister might see value in being a partner to Johor’s development, especially as a hub for service providers.
Singapore Institute of International Affairs senior fellow Dr Oh Ei Sun said bilateral trade and investment relations between both countries had remained stable over the years and would continue under Wong’s administration.
“Singapore has an established and tested set of domestic and foreign policies. But it is also famous for being pragmatic and innovative. The persistent global economic slowdown affects not only Singapore but all trading nations in Southeast Asia.”
The total trade between Malaysia and Singapore amounted to US$301.2 billion in the first half of 2023.
Singapore also ranked as one of Malaysia’s top FDI sources, contributing 8.3 per cent to the total in 2022.
Early this year, Malaysia and Singapore signed an agreement to work together on the creation of the JohorSingapore Special Economic Zone.
Nusantara Academy for Strategic Research senior fellow Dr Azmi Hassan said there would unlikely be big changes in trade and investment relations with Singapore.
“More importantly, Wong needs to demonstrate his capacity to serve as prime minister. He doesn’t have much time, perhaps less than a year before the republic’s next general election.
“To prove his capability, he will likely adopt a stricter approach and prioritise policies that benefit Singapore over its neighbours. This marks a notable difference, particularly in the context of relations between Malaysia and Singapore,” he added.