Overview Of Malaysias Economic Centre The Iskandar Zone Economics Essay

IDR, known as Iskandar Development Region has become a main and key development plan in Malaysia. It is also one of the projects under the Ninth Malaysia Plan. The Iskandar Development Region was established on 30 July 2006 and was named after the late Sultan of Johor, Almarhum Sultan Iskandar. The execution of mega projects announced under the Iskandar Development Region last year will begin in April, with RM7.63 billion worth of construction investments (Mahavera, 2008) Besides property and real estate, Iskandar Malaysia touts investment opportunities in health services, education, finance, information and communications technology and creative industries, electrical and electronics, petrochemical and oleo-chemical, food and agro-processing, logistics and related services, and tourism. (Iskandar M’sia is No Place For Speculators, 2009)

1.2 Affected areas

The Iskandar Malaysia zone, three times bigger than Singapore, would be Malaysia’s largest economic zone upon completion in 2025. The government expects it to create 800,000 jobs and attract around $100 billion in investment over 25 years. (Walid, 2009)This Project will cause an increasing of population and bring a lot of benefits and advantages to Johor in the future.

According to the information given about the Iskandar Development Region, the Iskandar Zone includes five economic zones which are Zone A) JB City Center with focus into Financial District and DangaBay as an integrated waterfront city; Zone B) Nusajaya that will becomes the new state administrative center with Universities, Medical centers, Resort and also logistic hub in the region. Zone C) Western Gateway Development with a fast growing word class port: C Tanjung Pelepas Port and Free Trade Zone status. Zone D) Eastern Gateway Development which cover across Pasir Gudang industrial area, Pasir Gudang Port and also Southern Technology Park. Zone E) Lastly, Senai C Skudai zone that where the state’s airport located with Technology hub, Multimedia hub, Knowledge hub and etc. (Elaine, 2010)

The five flagship zones have been planning as the major points for the development in Iskandar Malaysia. These flagship zones are conceived to strengthen Malaysia’s economic as well as to alter and generate targeted growth sectors.

1.3 History

In July 2005, Khazanah Nasional Berhad (Khazanah) was asked by the government of Malaysia to conduct a workable study for the special economic zone in south Johor. Thus, a Special Project Team (SPT) was formed to undertake the duty of creating a development plan which are Comprehensive Development Plan (CDP). In October 2005, a conceptual outline plan had been submitted to the National IDR Planning Committee. On 4 November 2006, IDR was officially launched by the Sultan of Johor. At the same time, IDR was the first in a series of economic growth corridors started in Malaysia under former prime minister Tun Abdullah Ahmad Badawi. (Musa, 2009)

2.0 Framework for Comprehensive Development Plan (CDP)

Iskandar Strategic Framework consists of 3 parts which are vision, foundations and strategic pillars. Vision is the development of a powerful, sustainable, metropolis of international standing. Foundations are based on nation building, growth and value creation and equitable and fair distribution among stakeholders. There is five strategic pillars which are international rim positioning, establishing hard and soft infrastructure enablers investments in catalyst projects, establishing a strong institutional framework and the creation of a strong regulatory authority, ensuring socio-economic equity and buy-in from the local population. (Comprehensive Development Plan)

2.1 Development Strategic

2.1.1 Physical Development Strategic

South Johor Economic Region (SJER) is determined as a specific development area in Johor that will expect to benefit from the economic opportunities. The essence of the framework and the thrust of the plan is liveability and sustainability. Equity, quality of life, safely and comfort, protect and manage natural environment, culture and diversity, partnership are the main purpose of the plan.

2.1.2 Economic Development Strategic

The main focus on the Economic Development Strategic is on the macroeconomic framework. The population of Malaysia in 2007 is 27.17 million and the total Iskandar Malaysia GDP is about USD 20 billion in 2005, 60% of Johor’s total GDP of USD 33.4 billion. (What is Iskandar Malaysia : Facts & Figures) The GDP and population of Johor is still constantly increasing from the past few years because of the Iskandar Development Project. Both the manufacturing and services are key factors of equal importance in Johor’s economy.

The Iskandar Project also indicates that services will emerge as the largest source of GDP growth in Johor. Furthermore, employment rate will be increased as a total of 5 million new jobs would have to be generated to meet demand for employment.

The Malaysian Institute of Economic Research (MIER) has upped its 2010 economic growth forecast to 5.2 per cent from 3.7 per cent amid what it says is a broad-based recovery. (NG, 2010) Iskandar Malaysia in Johor could surpass the US$13 billion (RM44 billion) foreign direct investment target for its first phase of development due to fresh investment interest from Hong Kong, South Korea and Europe. (Kaur, 2009)

There are still a lot of potential investors that plan to invest into Iskandar Project. A combination of seven strategic economic development thrusts is needed to accelerate growth of Iskandar Malaysia during the CDP period.

The thrusts are as follows: strengthen the existing main economic drivers and diversity into new economic growth sectors, strengthen supporting industries and the basic foundation, strengthen international linkages, build on existing strength in respect of resource endowment and lever on Singapore’s strength, optimize spatial distribution of economic activities, adopt the cluster approach and provide the right type of incentives and support. (Contributors, Iskandar Malaysia, 2010)

2.1.3 Social Development Strategic

This section deals with three socio-economic aspects; poverty, wealth distribution and the issues relating to the Bumiputera Commercial and Industrial Community (BCIC). There is about 1.25 million of population live in urban areas and 100,000 people live in rural areas. The overall poverty rate for Johor State is estimated at 0.42 percent which is below than 2.0 percent in year 2004. From the population in Johor, Chinese is holding most of the properties. Bumiputera means the residents which lives in Johor. Bumiputeras own about 30 percent of the total assessed properties in MBJB which is the government owned properties. The Bumiputera participation in commerce and industries is still low. The CDP also includes a prioritized seven Strategic Social Development Thrusts (SSDT). SSDT 1: Improve inter-agency coordination in social development of government and non-governmental agencies. SSDT 2: Enhance social capital. SSDT 3: Empower individual and privately-owned Bumiputra companies. SSDT 4: Increase property values of Bumiputra land through development. SSDT 5: Distribute the benefit of improved property values by promoting mutual funds. SSDT 6: Emphasize education and professional training. SSDT 7: Integrate Bumiputra companies into the clusters of major public and private corporations and research institutions. (Contributors, Iskandar Malaysia, 2010)

3.0 Planning and Implementation

Planning and Implementation consists of four parts. It mainly builds on the development context, framework and strategic discussed and focus on the realization of strategic outlines from the previous section. It is particularly specific on planning and development initiatives.

3.1 Social and Holistic Development

3.1.1 Liveable Communities

A primary thrust of SJER is to create liveable communities that cover quality housing, adequate facilities, quality services and a healthy, safe and lively environment. Functional, liveable, safety, clean, healthy are the objectives of this part aims to. To create a low cost housing with high quality of living environment are the main idea of this part too. Six guidelines are brought forward as the approaches to accomplish it. Firstly, to give residents common facilities and environment and reducing social marginalization by integrating low cost housing developments with the others. Secondly, provide rental homes for transient population. Rental homes are built to avoid squatter areas or dilapidated homes being built. Hostels is built efficiently for the low income and single workers as a temporarily shelter. Thirdly, special needs group such as the disabled, widows and abused women have to be given priority depend on their particular needs. Moreover, special design of the houses are needed for those special needs group. Next, create neighbourhood structures that promote a sense of belonging to the local community. Neighbourhoods must be planned and designed to promote community living where residents can put down roots with a sense of place, identity and belonging. Furthermore, to create a liveable communities also have to ensure the safety and security be given the highest priority. Johor is known as one of the high crime rate state among Selangor, Kuala Lumpur and Penang in Malaysia. To reduce crime rate and ensure the safety of residents, the use of security surveillance and policing system is compulsory. Lastly, reduce the impact pollutants from construction, renovation, operation, maintenance and demolition. This will make healthier and more resource-efficient. It is called the “Green Buildings”. The elements of “Green Buildings” include energy, water, materials, waste and indoor environment. “Green Buildings” promote resource conservation, make a healthier and comfortable environment and reduce operation and maintenance costs.

3.1.2 Social Development Initiatives

Five Strategic Social Development Thrusts is brought down in this part to have a brief explanation of it.

SSDT 1: Improve inter-agency coordination in social development of government and non-governmental agencies. As noted there are numerous government and non-government agencies that are involved directly, at different level of effectiveness, in social development. These agencies operate at State, Federal and even local (district or local authority) levels.

SSDT 2: Build Social Capital. The main strategic is to build trust loyalties to enhance contact, integration and networking between Bumiputera and non-bumiputera communities in all aspects of social and economic activities.

SSDT 3: Empower individual and privately-owned Bumiputra companies. This program is to assist Bumiputera individuals and companies to own landed properties. Bumiputera are discouraged and disallowed to sell properties to non-bumiputera.

SSDT 4: Increase property values of Bumiputra land through development. It will be resulted not only impact Bumiputera properties, but also bring others’ external benefits.

SSDT 5: Distribute the benefit of improved property values by promoting mutual funds. The Use of institutionally managed trust funds will be effectively mobilized to attain large properties within SJER for the benefit of Bumiputera unit holders.

SSDT 6: Emphasize education and professional training. Various of training and education is dedicated to Bumiputera for upgrading their skills in SJER development.

SSDT 7: Integrate Bumiputra companies into the clusters of major public and private corporations and research institutions. To let companied become stronger, innovative, competitive within the cluster and on the regional and global scale.

3.2 Physical Planning Initiatives

3.2.1 Physical Development Plan

Physical Development Plan is about the management of land use within the development areas are mentioned before. The purposes are to create a harmony city through the regulation of quality, quantity, location and development occasion and activities of building construction and spurring the use of development land to a better direction. In the Comprehensive Development Plan (CDP), land will be zoned into “Zoning Districts” by using the zoning plan. The zoning district system is categorized into two categories which are base zoning districts and special overlay zones.

3.2.2 South Johor Urbanization

Johor is the sixth highest of urbanization rate in Malaysia and Johor Bahru is the focal state that aims to be the conurbation of South Johor. Hence planned communities and employment zones need to be well defined and distributed evenly within the region so as to create balanced development. In year 2025, Johor sets to achieve the goal of fully urbanization.

3.2.3 Natural and Green Environment

Desiring to become the high quality of life, the protection of the natural resources, agriculture lands, preservation of public and private open space along with the continued dedication of parkland and recreational facilities have to be encompassed in the planning.

3.2.4 Coastal Zone

The coastal zone for Iskandar Malaysia is the water of Johor Straits within the Malaysian boundary and within a 3km inland zone along the coastline of Johor Strait that also lies within the Special Economic Corridor. (Iskandar Malaysia, 2010) The goals of coastal zone is to enhance coastal zone development by protecting its natural environment and ensuring urban development is meet the highest environmental standards in achieving a balanced and sustainable environment.

3.2.5 Johor Bahru City Centre

Johor Bahru is the capital city of Johor. The goal of Johor Bahru City Centre is to regenerate Johor Bahru into a vibrant economic centre while preserving its cultural and heritage values. Furthermore, a New Business District will be created for Johor Bahru to enhance the physical, economic and social environment of the city centre.

3.3 Infrastructure and Development Initiatives

The quality of life and the highest standard and quality of infrastructure are the goals of the development. Iskandar Malaysia infrastructure projects is including upgrading highways, roads, airport, security, drainage and many others’ utilities services.

3.3.1 Urban Infrastructure

There is a requirement to add on new infrastructure with new development projects whilst the urban areas is constantly expanding and developing. Therefore, the goals of urban infrastructure consist of four points. First of the points is to optimize use of existing infrastructure. Next, common aspects of infrastructure needs and requirements will be integrated to ensure planning for sustainable and affordable development. Thirdly, service levels and high quality of environment will be achieved by utilizing modern and innovative technology in infrastructure provision. Lastly, set targets for quality waste, water and energy resources and control and coordinate providers of infrastructure and utilities services.

3.3.2 Urban Linkage System

Urban linkages are developed to achieve balanced economic growth. The functions of urban linkage system aim to be safety, efficient and attractive for the people and the transportation of goods. The goals of urban linkage system are to ensure local communities accessibility for better quality of life and achieve the balanced economic growth.

3.3.3 Transit-Oriented System

Transit oriented development focus on the transit station and public bus network. The functions of transit oriented system are almost same as urban linkage system which are to enhance the mobility for local communities and convenient to the public. The goals of transit oriented system are to make an efficient public transportation system to link major areas for the people and increase density around transit station.

3.3.4 Commercial Development Initiatives

Johor is developing into an international address like Shenzhen. The commercial development field consists of creative, educational, financial advisory and consulting, healthcare, logistics and tourism.