Johor to unseat Sarawak as second-largest state economy

JOHOR: Johor is expected to become Malaysia’s second-largest state economy within a few years, pushing Sarawak into third place.

Selangor, with a GDP of RM251.5 billion occupies the top slot, while Sarawak’s GDP was RM108.7 billion last year. Johor’s GDP was RM104.4 billion.

Johor’s economy has been growing at a rate faster than that of Malaysia as a whole since 2011, except for 2013 when the rates mirrored each other. Last year, Johor’s 5.7% growth rate was higher than those of Malaysia’s other 12 states.

According to a Nikkei Asian Review (NAR) report, this was largely due to prices of properties and goods being cheaper in Johor than in neighbouring Singapore, resulting in Malaysians staying in Johor and working in Singapore and Singaporeans coming to Johor for weekend shopping.

Another reason was the massive Iskandar Malaysia development project which is expected to cover 2,200 sq km and which began in 2006. The project is expected to continue through 2025.

The report said due to the many physical developments taking place, Johor’s construction sector grew by 24% last year. The report gives some examples of major developments in Iskandar.

However, according to the NAR report, there was still a lack of clarity in the Iskandar project’s overall strategy.

It said all competing investment plans and developer intentions painted a vague picture of Iskandar’s future, and that there was no clear overall vision that could appeal to both Malaysians and global citizens.

Iskandar, it said, wanted to become a Southeast Asian hub but it lacked a strategy as to how to unseat Singapore, Bangkok, Kuala Lumpur and other nearby hubs.

Among other challenges, it noted, were the supply gluts in high-rise condominium complexes.

Iskandar, the NAR report said, could come to symbolise a new urban model or the old economic strategy of merely luring overseas investment. -FMT