KUALA LUMPUR: Greater congestion at the Singapore-Johor border crossing and higher toll rates are cramping growth in Iskandar Malaysia and stopping it from making a real difference in the lives of those living in Malaysia’s southern-most state.

Politicians, businesses and a top international school in Iskandar said that without ease of access, the movement of people and money between Johor and Singapore — a lifeline for both — is being choked off.

To fully tap into the potential of the Iskandar Malaysia economic region, they believe that both governments need to make it easy for their citizens to move between both regions. And that requires Singaporeans and Malaysians to get over their love-hate relationship and realise how inter-dependent they are on each other.

Better paying jobs

A persistent complaint among residents is how their wages cannot keep up with the rising cost of living in southern Johor especially since Iskandar’s property boom has attracted increasing numbers of Singaporeans to live there.

Umno MP Datuk Nur Jazlan Mohamed, whose Pulai constituency lies within Iskandar, said that in order to raise incomes the authorities have to get Singaporean businesses to expand their investments in the economic corridor.

Without the high-income jobs and demand in services that those businesses bring, Johoreans will not earn better salaries and get opportunities that could raise their living standards, he said. The reality, he said, is that Malaysia can only rely on Singaporean businesses to come to Iskandar.

“The Chinese and Middle East businesses that Iskandar authorities talked about bringing in have not come in,” he said, despite the huge hype about them a few years ago.

Figures released by Iskandar Regional Development Authority (IRDA) show that Singapore businesses are still the top foreign investors in Iskandar, but the amount of money they are pouring in is still small.

In an email interview with The Malaysian Insider, an IRDA spokesperson said that of the RM156.35 billion in investments that have been committed, 63% (RM98.85 billion) are from domestic sources.

The remaining 37% (RM57.49 billion) came from foreign investors. Singapore companies topped the list with a total committed investment of RM12.05 billion.

Taking a toll on business

Ever since toll rates at the Causeway went up last month, a Singapore car on a round trip to Johor Baru has to pay S$12.80 (RM33) in toll charges.

Every business that has relied on weekend Singaporean travellers such as car workshops, car washes, restaurants and supermarkets have seen a plunge of about 30% to 50% in sales since the implementation of the new toll rate.

“For every Singapore dollar that is spent here, three people benefit,” said a car accessories shop owner in Bandar Baru Uda, who wanted to be identified only as Hong.

Those spending sprees come at a cost, however. Johor Baru residents claim that traders who have tasted the free-wheeling Singaporean shopper are wont to hike up prices and this hurts locals.

“In Johor, Singaporeans basically feel like everything is 60% off everywhere,” said Bukit Indah resident Mohd Izuan Zahid, due to the stronger Singapore dollar.

The higher spending power creates animosity between travelling Singaporeans and local residents who have to deal with higher prices.

Another glaring problem is that Singapore vehicles would gulp down huge amounts of subsidised petrol before returning to the island republic.

But Nur Jazlan believes the Singaporeans’ disposal income is an opportunity, provided there is a greater mass of them spending it in southern Johor on a regular basis.

He has been critical of the new toll charge, saying that it has made crossing the border more costly and would discourage Singapore companies from moving to Iskdandar.

“If Singapore companies expand here, there will be a greater need for support services for the high income earners working at those companies.

The IRDA spokesman said the decrease in the number of vehicles was only temporary while both sides adjust to the new rates.

Leaving the baggage behind

But a critical part of making Iskandar and Singapore complementing each other is to change the mindsets on both sides of the Causeway, said Robert B Pick, Master of Marlborough College Malaysia in the Nusajaya suburb within Iskandar.

He believes that Iskandar and Singapore can benefit enormously from each other provided the people on each side can put their latent animosity behind them.

The elite Marlborough College has been both a catalyst for and a beneficiary of the economic zone. Since opening its doors in 2012, the college has increased its student population every year.

“The animosity and suspicion that still exist from 1965 has to be put to bed; it needs a few like-minded people to stand up and say’this place could be fantastic’. Because it could be,” said Pick. — The Malaysian Insider

This article first appeared in The Edge Financial Daily, on November 3, 2014.