Not every Singaporean who travelled across the Causeway was there to spend money. Lurking among the crowds of shoppers and holiday-makers, were ambitious, risk-taking Singaporean businessmen. The authors interviewed a garment manufacturer who moved his production line to Johor in 1997. There were pros and cons in the move. While rentals and labour costs were much lower, workers in Johor, a more relaxed environment, would tend to be less productive.
Another manufacturer was glad that they did not move to Indonesia. At the time of writing, there was political turmoil triggered by the downfall of Suharto. They could have saved a lot more by moving their production lines to Indonesia, but Johor would always be safer and more stable.
As many industries were already saturated in Singapore, JB benefited from the spillover effect. Started around that time in 1998, Bonjour bread operated its bakeries in Johor. However, JBians did not get to buy it as all the bread produced there was shipped back to Singapore for sale. The owner soon realised that there was a potential market in JB and decided to distribute his product there as well. Even high tech businesses like i-Venture took advantage of low costs in JB and had their digital educational materials designed over there.
According to the authors, 60% of Singaporean investors in Malaysia were investing in Johor. The “Singapore factor” was crucial in the development in JB’s economy. Businesses owned by Singaporeans included retail shops, restaurants, food courts, karaoke pubs, nightclubs, etc. As funds transfer costs were high, Singaporeans who traded directly on the Malaysian stock market (thanks to the closure of CLOB) would bring in cash to deposit in brokerage firms. Understandably, most JBians welcomed all that.
When Singaporeans talked about investing, real estate is never left out as back then, it was almost a no-brainer in Singapore. Malaysian developers went into overdrive, building houses, shops and apartments much faster than eager Singaporeans could snap them up. Some JBians have remarked that Singaporeans buy houses (in JB) like they don’t cost anything. A few had bought entire industrial parks. With all that indiscriminate building, many projects were left uncompleted. With all that indiscriminate buying, many Singaporean investors were stuck with no one to rent or sell their property to.
One Singaporean investor approached by the authors remarked that the attractiveness of JB will forever be limited by its ease of access from Singapore and Singapore, with its small population, was the only source of buyers (that’s before Chinese capital flight). Real estate in JB would only take off if immigration procedures for Singaporeans could be simplified. While most Singaporean property investors bought property in JB, he bought property in KL and Penang. We can now see that this investor made the correct decision at the turn of the century.
In October 1997, a meeting held at the Chinese Chamber of Commerce discussed if Singaporean businessmen should pull out of JB because of crippling traffic jams at the Causeway due mostly to the tightened security checks on the Malaysian side (triggered by a spat between the two governments concerning the sale of water to Singapore).
Johor’s mentri besar even challenged Singaporean businessmen to take their businesses elsewhere, but in the same breath, tried to woo Singaporean investors. The Malaysian authors pointed out the relative importance of Singapore and JB to each other. I think it also shows that as the authors pointed out, “形势比人强”. Many Singaporeans, while they realised the enormous advantage we have, also lack the EQ to manage people who don’t always say what they mean. Changing political climate and policies cannot be brushed off. Stakeholders on either side need to perform a delicate balancing act.