Malaysia launches five billion dollar city next to Singapore

[SSLL]

From: http://au.news.yahoo.com/061104/19/11ard.html
_______________

Saturday November 4, 05:25 PM
Malaysia launches five billion dollar city next to Singapore

JOHOR BARU, Malaysia (AFP) - Malaysia has launched an ambitious project aimed at transforming the idyllic southern Johor state into a metropolis similar to Hong Kong or Shenzhen.
The 17.7 billion ringgit (4.8 billion dollars) project, called the South Johor Economic Zone, will be 2.5 times the size of Singapore when completed.

It is designed to woo foreign investment and compete with neighbouring Singapore for manufacturing and logistics businesses to spur growth and employment.

Prime Minister Abdullah Ahmad Badawi who unveiled the mammoth project described it as one of Malaysia's "most important and ambitious initiatives."

"The project aims to be a model of economic development in the extremely competitive era," he told some 2,000 people including business leaders and senior ministers.

"The South Johor Economic Zone is blessed with elements that make for a dynamic international metropolis," he added.

The project will cover an area of 2,217 square kilometers (853 square miles) -- making it one of the single largest integrated developments in the country.

Abdullah said the government will inject 4.3 billion ringgit while Khazanah Nasional, the state investment agency, will pump in 3.4 billion. The private sector will provide an additional 10 billion in the early phase of the plan.

Iskandar Ismail, director of special projects with Khazanah said the infrastructure project will be developed over 25 years and will be created off the west coast of Johor which borders Singapore.

Experts say it is a move to reduce Johor's dependency on agriculture and plantation and to take advantage of being physically close to Singapore, considered the most developed Southeast Asian country.

"It will definitely help diversify the economy and create employment," Suhaimi Saidi, economist with Kenanga Research said.

Cash-rich Khazanah Nasional will act as a catalyst for the development while United Engineers (Malaysia) Bhd (UEM), a major infrastructure player linked to the ruling United Malays National Organisation (UMNO), will be the master developer.

Wan Abdullah Wan Ibrahim, managing director of UEM Land said some 10 billion ringgit of projects have been identified by the company in Nusajaya, which is the key development project within the economic region.

"The first phase of the new Johore state administrative capital project costing one billion ringgit will be completed by August next year," he told reporters.

A plan to build a controversial bridge to replace a causeway linking Johor and Singapore has been scrapped.

[vertex]

Jesus Christ, does the planet really need another new city?

Why doesn't the government simply take care of the mess already on their hands?

[Marcu]

Metropolis similar to Hong Kong and able to complete with Singapore? You gotta be kidding me.

Both HK and Sing were products of market driven organic growth, not a result of some quasi-dictator looking to leave a legacy. I guess it takes a periodic devaluation of currency to knock some sense into people (see Taiwan and South Korea in the 90s).

I'm sure the city will look nice. It just won't be anything more than disneyland.

[scribeman]

The city actually has amazing potential. Most of Singapore's wealth is built upon shipping, especially of oil. Singapore is southeast Asia's main entrance point for oil. In addition to their amazing harbors, they are a major source of industrial storage/space. This new city could very well lure foreign investment away from Singapore. In the long run, it could even become the haven foreign investors seek as Hong Kong becomes subdued once again by the Chinese country.
I'm interested in seeing what happens.

[Paintballer1708]

This really will be interesting in seeing what happens. It would be nice to see another Hong Kong sprout up in Malaysia. Malaysia could use another large city with an impressive skyline. KL needs a rival city.

[J Church]

JB? Good luck with that.

[urbanflyer]

This will be Asia's largest boondoggle since Kansai Airport Surely there's a few PMs in KL who think this is absolutely bananas...

[edluva]

Originally Posted by Marcu

I guess it takes a periodic devaluation of currency to knock some sense into people (see Taiwan and South Korea in the 90s).

Taiwan never experienced a dramatic devaluation of currency, but all the same. This is a tremendous waste of money.

[Jaroslaw]

Originally Posted by scribeman

Most of Singapore's wealth is built upon shipping, especially of oil... In the long run, it could even become the haven foreign investors seek as Hong Kong becomes subdued once again by the Chinese country.

Two inaccurate statements.

Singapore ships oil because it has seven refineries, the biggest such concentration in SE Asia. And most of SIN's wealth comes from the financial sector, which has grown under a free-market, non-interventionist government based on British law (like HK). Singapore has one of the most highly educated workforces in the world, shipping and industry in general are not the main reason for its success.

As discussed in another thread very recently (still up on page one), HK is killing Shanghai and the rest of China as a financial center. And 2006 was a record year for foreign investment in HK.

Johor now is a dump, reminded me of Tijuana when I was there... I wish them good luck, of course.

[scribeman]

Originally Posted by Jaroslaw

Two inaccurate statements.

Singapore ships oil because it has seven refineries, the biggest such concentration in SE Asia. And most of SIN's wealth comes from the financial sector, which has grown under a free-market, non-interventionist government based on British law (like HK). Singapore has one of the most highly educated workforces in the world, shipping and industry in general are not the main reason for its success.

As discussed in another thread very recently (still up on page one), HK is killing Shanghai and the rest of China as a financial center. And 2006 was a record year for foreign investment in HK.

Johor now is a dump, reminded me of Tijuana when I was there... I wish them good luck, of course.

You've yet to actually refute my statements.

[Marcu]

Originally Posted by edluva

Taiwan never experienced a dramatic devaluation of currency, but all the same. This is a tremendous waste of money.

My mistake. I meant Thailand.

[Marcu]

Originally Posted by Jaroslaw

Two inaccurate statements.

Singapore ships oil because it has seven refineries, the biggest such concentration in SE Asia. And most of SIN's wealth comes from the financial sector, which has grown under a free-market, non-interventionist government based on British law (like HK). Singapore has one of the most highly educated workforces in the world, shipping and industry in general are not the main reason for its success.

As discussed in another thread very recently (still up on page one), HK is killing Shanghai and the rest of China as a financial center. And 2006 was a record year for foreign investment in HK.

Johor now is a dump, reminded me of Tijuana when I was there... I wish them good luck, of course.

Singapore also has one of the most free and market oriented economies in the world. A centrally planned new deal/communist type "industry zone" such as this would be unheard of in Singapore.

[staff]

Originally Posted by Marcu

I'm sure the city will look nice. It just won't be anything more than disneyland.

You mean, Dubai?

[Ronin]

First off, this new city cannot be equivalent to Shenzhen (assuming HK = Singapore) because Malaysia is not China! I have never heard anything about Malaysia being the next big thing. They are only fooling themselves.

[Derek]

Originally Posted by staff

You mean, Dubai?

exactly what i was thinking

[Marcu]

Originally Posted by Ronin

First off, this new city cannot be equivalent to Shenzhen (assuming HK = Singapore) because Malaysia is not China! I have never heard anything about Malaysia being the next big thing. They are only fooling themselves.

Malaysia has been predicted to be part of the next wave of "Asian Tigers" to emerge as dominant economic players in the world (with the first wave being Singapore, South Korea, Taiwan, etc). While I certainly hope that's the case, I just don't see it happening with the economic mentality of the government in place. In the best and most positive case scenario, Malaysia will go through the same fate as Japan: rise to promenance in part through the accumulation of massive government debt, taper off, realize the faults of the previous policy, and reform. Seems to have worked for Japan as the economy is seeing steady growth for the first time in over 15 years after major regulatory and economic reforms. Hope it will too for Malaysia. Just don't expect the more steady organic path of Singapore.

[chiphile]

Yes, a bunch of internet nerds are more competent in deciding what a country should do..

Give me a break, I bet you all said the same about Dubai some years ago, now you're taking a fresh dose of Dubai up the ass daily... Same will be with Malaysia, there's more than just China in east Asia..

I often see quick dismissals of Asian or Middle Eastern countries trying to spur their economies. I wonder if Germany did this, what some of you would have to say.

Come back with some logical points to argue based on some sound reasoning rather than a quick dismissal, you guys make this site look retarded sometimes.

Malaysia isn't some oil rich guy on a shopping spree, they are a well developed nation and have the resources to pull this off. Although this investment may not pay off as highly as the Maylasian government predicts, it is hardly akin to simply throwing away money. These are infrastructure projects, not "disneyland."

[WonderlandPark]

This won't be a Shenzen, simply because Malaysia is not populated like China. But Malaysia can really be almost classified as a developed nation, sure it has poor areas, but so does Taiwan and S.Korea. Like Cyberjaya and Putrajaya, Malaysia will pull it off, and it makes perfect sense to attach a big development like this to Singapore. All the best to them.

Putrajaya: some said it was a waste to build a new capital city from scratch, oh, wait, the US did that, and so did Australia, the EU is doing it now and so on:

[biguc]

Of course you can build a new capital city, but that isn't what we're talking about here. Capital cities are built off of government, so you can make a new city work in that way, the economics aren't really important. Expecting to build a new center of commerce, however, is just silly.

Originally Posted by Marcu

Malaysia has been predicted to be part of the next wave of "Asian Tigers" to emerge as dominant economic players in the world (with the first wave being Singapore, South Korea, Taiwan, etc). While I certainly hope that's the case, I just don't see it happening with the economic mentality of the government in place. In the best and most positive case scenario, Malaysia will go through the same fate as Japan: rise to promenance in part through the accumulation of massive government debt, taper off, realize the faults of the previous policy, and reform. Seems to have worked for Japan as the economy is seeing steady growth for the first time in over 15 years after major regulatory and economic reforms. Hope it will too for Malaysia. Just don't expect the more steady organic path of Singapore.

The last sentence in this post really hits the nail on the head. This city will probably pop early and fast based on public sector involvement in the creation of it. Everyone will gloat about how great it is, have fun. Give it a while and government planning will prove to be totally impotent in getting anything done and growth will tank.


marcu and Jaroslaw got this one right.


chiphile, everyone knows Dubai is built on slave labor. It's not really relevant to a discussion of this city. Besides, it's amusing that you denounce people posting in this thread as "internet nerds are more competent in deciding what a country should do", then proceed to be exactly that. You then go on to ask for people to provide some logical points to argue instead of just dismissing the idea (they actually have provided some great points, re-read their posts and realize that these people probably know a lot more about economics than you). Of course, in making this request, you dismiss their angle without any "logical points" of your own.

People are laughing at you.

[WonderlandPark]

Only one of the buildings I posted of Putrajaya were government built, the others are private. Many, of course, were built to fill the office and housing needs near the capital, but private-sector in nature. Malaysia is more private sector oriented than other Asian nations, for example, transit is private, roads are tolled and built by private companies, I think the convention center in KL is a private enterprise, Malaysia is a nation that prides itself on a vigorous private sector, so I doubt the goal is for the *government* to be actually building office towers, homes and the like, probably just enabling the thing to happen by putting in roads, bridges and other infrastructure with the *goal* of *stimulating* a 5bn dollar city. This sort of thing is done all the time with sucesses and failures all over the world, but I really don't think with the growth in general in Asia and the rapid ascent into developed nation status of Malaysia that this project will fizzle out after a few years.