Business | Economy

Abdullah's project hit by politics and apathy

Malaysia's plan for a showpiece economic zone in its south is in doubt because of the uncertain fate of the country's prime minister and a lukewarm response from big investors in nearby Singapore.

  • Reuters
  • Published: 23:35 June 1, 2008
  • Gulf News

Singapore, Kuala Lumpur: Malaysia's plan for a showpiece economic zone in its south is in doubt because of the uncertain fate of the country's prime minister and a lukewarm response from big investors in nearby Singapore.

On paper, Prime Minister Abdullah Ahmad Badawi's pet project to develop the 2,200 square kilometres of land in southern Johor state into an economic zone to complement the rich but land-scarce city-state of Singapore looks good.

The area has so far drawn $10.5 billion in investment, much of it from the Middle East, riding on investor hopes the area will become a hinterland for the city-state the way that China's booming Shenzhen, once a tiny fishing village, complements neighbouring Hong Kong.

The Iskandar Malaysia zone, three times bigger than Singapore, would be Malaysia's largest economic zone.

The government says it should create 800,000 jobs and attract $100 billion in investment over 25 years. But Malaysia's track record in getting such grand projects off the ground is patchy and Sing-apore developers are looking to booming China and India instead, worried the plans will be shelved if Abdullah loses power.

"It's Abdullah's project. If he's not around, no one knows what's going to happen as different prime ministers will have different priorities," said Suan Teck Kin, an economist at Singapore's United Overseas Bank.

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