Singapore's Hinterland

Malaysian Prime Minister Abdullah Ahmad Badawi has pitched the southern state of Johor as the Shenzhen for neighbouring Singapore. He said this in his meeting with with its premier Lee Hsien Loong on the sidelines of the Asia-Europe Meeting in Helsinki.

According to ST, Lee said both he and Badawi expressed hope that Singapore and Malaysia would be able 'to continue to develop their cooperation in many areas and move forward'.

Badawi also spoke about ongoing projects to develop Southern Johor, and likened Singapore to playing the role of Hong Kong while Johor would be like Shenzhen in China. The report described it as a mutually beneficially relationship between the two territories.

Lee gave his full support to the plan: 'I said I fully agreed and we supported Johor becoming prosperous and successful with Singapore and we hoped we would be able to work together on this.'

Badawi also said plans to develop the South Johor Economic Region were meant to 'complement' and not 'compete' with the Republic, and that it would be a 'win-win' situation.

Great sound bites. But is it really a win-win situation? Well, almost.

Singapore can continue to count on Johor as its biggest hinterland, moving lower-end factories across the causeway. At the same time, Johor can continue to rake in big dollars by doing very little as it has done in the last three decades, thanks to massive Singapore investments and tourism dollars due to the strong Singapore dollar.

But the HK-Shenzhen kind of relationship also means that Johor will never rival Singapore, as envisioned by former Malaysian premier Dr Mahathir Mohamad. He had wanted Johor to rival Singapore as the new investment destination -- not as a hinterland like Shenzhen. Dr M helped push for the development of Port of Tanjung Pelepas, which captured two of the biggest clients from Singapore's PSA.

Dr M had other big plans for the state -- turn Senai Airport into a major rival to Changi Airport in Singapore, a financial centre, a double-tracking railway network from Johor Baru all the way to southern Thailand, a new city near the Second Link, and a new transportation hub to replace the old causeway.

Badawi has taken some of the ideas and re-packaged them as his South Johor masterplan. But he has scrapped the double-tracking and the bridge projects, among other things.

Johor Baru will remain a relative backwater next to Singapore without all the plans to alleviate the third-world traffic gridlock in the Malaysian city, exacerbated by the big number of Singapore cars in the state.

In other words, Johor will remain a hinterland to Singapore.