Johor MB’s views on Iskandar
By ZAZALI MUSA
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AS co-chairman of the Iskandar Regional Development Authority (IRDA) and as Johor Mentri Besar, Datuk Abdul Ghani Othman (pic) is definitely a pivotal figure in the Iskandar Malaysia (IM) story. In an interview with StarBizWeek, he says the next step for IM is to look at new investments and to figure out how it can remain attractive to investors. Excerpts:
SBW: How would you rate Iskandar Malaysia’s progress so far?
Ghani: You must not forget that IM was only launched on Nov 4, 2006. The first three years have been good, not only in term of investment value but also in terms of the contents of the developments. There is also a good mix of investors from Europe, the Middle East and locals.
Despite the global economic crisis, we have attracted RM55.56bil of cumulative investments up to December 2009, of which 60% are foreign direct investments (FDI).
The figure surpasses the RM44.75bil target for 2009. Of the RM55.56bil, 37.1% has already commenced work on the ground. Since IM was launched, some 44,000 jobs have been created.
You must also remember that IM is a private sector-driven economic growth corridor. The money from the Government is mostly for the upgrading of the existing infrastructure and the building of new infrastructure.
We are looking at 2012 as the tipping point for IM. By that time, projects such as LEGOland, Indoor Theme Park @ Puteri Harbour, Newcastle University Medical Malaysia and Marlborough College @ EduCity, Premium Outlet, CyberCity and Danga Bay Waterfront Development will be completed and operational.
The next step, beyond the first three years of courting investors, is to see how much investment we can bring in. For that, all stakeholders have to work even harder to bring in new investors.
Do you think it is becoming more difficult to attract investment as there are still uncertainties concerning the global economy?
Most countries and economic growth corridors in other parts of the world are experiencing a decline in the FDI flow, not only IM.
However, there are still people with money even during the bad times. Some investors might adopt the wait-and-see approach, but others are going to strike while the iron is hot.
Judging from the interest from China, Europe and the Middle East, and locally, we believe IM will be able to sustain its momentum in attracting investments for the next three years.
We are now talking not only with the abovementioned investors but also those from Australia, Hong Kong and the US. Several announcements on the new investments will be made this year.
They cover a good cross section of IM’s nine economic activities, namely electrical and electronics, petrochemical and oleochemical, food and agro-processing, logistic and related services, tourism, health services, educational services, financial services and ICT and creative industries.
IRDA will focus on targeted groups or investors for the next three years, and with the nine economic activities, IM has a lot to offer local and foreign investors.
How will the recent Dubai World crisis impact IM’s strategies to attract investors from Dubai?
We don’t totally depend on investors from Dubai. We have also received investments from other Middle Eastern countries such as Saudi Arabia, other emirates in the United Arab Emirates and Lebanon.
The crisis could also be a blessing in disguise for us as other Middle East investors might be looking at investment destinations other than Dubai.
Unlike Dubai, which focuses on property development projects, IM with its nine economic activities has a lot to offer to potential investors not only from the Middle East but also from different parts of the world.
There is a strong investor interest from China, Europe and the Middle East, and IRDA will continue looking at other sources of investment.
IRDA is now helmed by new chief executive officer (CEO) Ismail Ibrahim, the third in just three years. What signals are being sent to investors with this frequent changes?
I don’t see it as us sending a wrong signal. And why do you (the media) tend to interpret it that way? It is not wrong to replace the CEO. Ikmal (the first CEO, Datuk Ikmal Hijas Hashim) was the person responsible for laying the IRDA’s foundation. It is only natural to have somebody replacing somebody.
I am quite confident that Ismail will perform well and will take IRDA to the next level, to be an effective regulatory body responsible for spearheading the development of IM.
As one of those who drafted the Comprehensive Development Plan of IM, he (Ismail) understands IM better.
How important is Singapore to IM, and vice versa?
All economic growth corridors seem to concentrate on certain regions. So, actually IM and Singapore constitute one corridor of an economic hub within an economic region of concentrated growth, which is Asean.
To some extent, Johor and Singapore have been growing, and the two are actually complementing each other. There is always a constant flow of investments from the republic to Malaysia, especially into Johor in manufacturing.
The complementary relationship will continue. Imagine the immense benefits that both Malaysia and Singapore will reap in the long term from the investments and growth in IM.
Singapore investments come to Johor not because of our close proximity, but because Johor also offers comparative advantage in term of space and lower costs of doing business.
IM is no longer Singapore’s hinterland. For instance, Singapore has the two integrated resorts (IRs) with casinos, but we have LEGOland and the Indoor Theme Park in Nusajaya. Those (fathers) who want to gamble can go Singapore and families with younger children can come to our theme parks in Nusajaya.
The mothers can go to the Malaysian Premium Outlet in Kulai, which sell branded items at discounted prices.
IM attracts negative reports from day one. How is IRDA handling that?
From now onward, IRDA should change its approach in dealing with the press. It should be more ready to work closely with the media. We need to disseminate news through the mainstream media on the progress of IM from time to time to keep public informed on the development taking place there.
Do you think Malaysians are unaware of the progress of IM or they do not care?
I think probably Malaysians are quite impatient. They want to see immediate results but what could you put on the ground in the last two to three years?
Let’s wait for the next two years, when most of the projects will come into fruition and are operational. By then, IRDA and the other stakeholders will be able to deal with the skeptics.
We are used to investments by multinational corporations and the domestic private sector all over the place in the last 40 years or so, but the idea of having growth in a designated area is new to us.
IM is going to be the centre of growth via private sector initiatives, except it is earmarked to be a concentrated centre of growth. I believe that over time, Malaysians will accept that growth corridors will further spearhead the nation’s progress.
We are moving in the right direction. There are designated growth corridors in other parts of the world and IM has all the criteria and comparative advantages as an economic growth corridor in this country.
- The Star
