JOHOR BARU, Malaysia (Reuters) - Like rival sisters embittered because one has good looks and money while the other lost out, wealthy Singapore and Malaysia’s underdeveloped state of Johor jostle in an uneasy relationship.
Separated by just a thin ribbon of water, state capital Johor Baru seems a world away from spick-and-span Singapore.
Despite its somewhat seedy appearance and a reputation for crime, Johor is a popular day trip destination for Singaporeans who flee across the border on weekends looking for cheaper shopping and golf.
Investors have been less eager to come, pointing to projects that have fallen victim to past political sparring.
But Malaysia hopes to change that with a $105-billion development plan that will offer Singapore and its investors something the island city-state doesn’t have — space.
Malaysia sees the 2,200 square-kilometer zone in Johor — which will contain a marina, exclusive gated communities and theme parks — as a hinterland for Singapore, duplicating the ties between Hong Kong and China’s southern city of Shenzhen.
“When Hong Kong burst at the seams, they needed somewhere to go, and Shenzhen was the most logical progression. So we see that happening here as well,” said Wan Abdullah Wan Ibrahim, managing director of UEM Land Bhd, which owns almost 24,000 acres of vacant and developed land in the planned zone.
Under the plan to transform Jahor over the next 20 years, an industrial precinct, schools and hospitals will also be built.
The government is also studying a proposal to create free access zones in certain areas in Johor where visitors from Singapore can live and work. If it works out, there will be no immigration and customs check for entry into these zones, which will be guarded by surveillance systems and barriers.
“It’s not just Johor that benefits, but Singaporeans also benefit,” said Wan Abdullah.
In 2006, Johor received about 23,500 visitors from Singapore every day, who spent a total of about 5.3 million ringgit ($1.5 million) a day, the state government has estimated.
Malaysia and Singapore, which separated in 1965 after a brief union in the years following independence from Britain, have deep economic ties, but relations have sometimes been prickly.
They have quarreled over the building of bridges across the Johor Strait, land reclamation, water supply and race.
Singapore has a majority ethnic Chinese population and minority Malay population, while the racial-makeup in Malaysia is the opposite. The countries occasional spar over accusations about discrimination against their Chinese or Malay minorities.
Relations have warmed since Mahathir Mohamad, Malaysia’s outspoken former premier, handed power to Abdullah Ahmad Badawi in 2003.
Now officials of both countries are working closely to see how strategies for Johor’s development might fit with Singapore’s plans, said Azman Mokhtar, chief of Malaysian state investment arm Khazanah Nasional, which is spearheading the plan.
Singaporean businessmen, burned in the past by grandiose ideas for Johor, are cautious over concerns about rampant crime, corruption and lack of government transparency.
Malaysian officials have made few details public on fund-raising plans. But they are trying to woo international investors to the massive project, and say French, German and Singapore firms are keen on locating in the industrial park.
The Johor development plans offer the biggest fillip for the region’s property industry since the Asian financial crisis of 1997-1998, from which the sector has not yet recovered, said real estate agent Samuel Tan, who has worked there for 23 years.
“There is a symbiotic relationship. Whatever the political situation may be, ordinary businessmen are very pragmatic, we learn to live with it.”
Already 50,000 Johor residents travel to jobs in the city state each day, and Singapore-based firms are among Johor’s largest employers.
But suspicions remain.
“Sometimes I wonder if the reason we share this unexplained hostility toward each other is because we’re actually quite similar,” Malaysian columnist Gavin Yap wrote in the New Sunday Times recently.
“Malaysia is the big party and Singapore is the tight-fisted landlord below us, who keeps hitting her broomstick against her ceiling, screaming at us to shut up and get a job.”