Published April 4, 2007
ISKANDAR PROJECT
Getting the Johor project off the ground
The Malaysian state's chief minister faces many hurdles in clearing the way for foreign investments, but he's determined
By S JAYASANKARAN
KL CORRESPONDENT
DANGA Bay in Johor Baru, across the water from Singapore and facing Serene Hill on which the royal palace stands, marks the beginnings of the Iskandar Development Region (IDR), an economic zone so special that it's the centrepiece of Prime Minister Abdullah Ahmad Badawi's lofty ambitions for his administration.
"I look at it positively. Like Shenzhen and Hong Kong, the IDR and Singapore will feed off each other, to our mutual prosperity.'
- Ghani Othman,
Johor Chief Minister
Yet its slow progress shows what Kuala Lumpur will be up against. Danga Bay actually started four years ago but only began flashing on radar screens last year when it began drawing the public in droves.
There has been some grumbling by Johor politicians and civil servants who say that the project's place name is too westernised, that it should have been called Teluk Danga to reflect the supremacy of the country's official Malay language.
Although the objection by the language purists was muted and did not reach the newspapers, it came to the ears of Lim Kang Hoo, the project's promoter, and alarmed him sufficiently for him to lobby discreetly for a compromise. Mr Lim, who had already spent considerable sums to brand the project overseas, settled for signboards in the state carrying the words 'Teluk Danga' inconspicuously below its larger English translation.
Meanwhile, the bay's initial development did not get the rapturous reception it might have, as a previous effort to develop the waterfront resulted in an abandoned eyesore when the Asian financial crisis rendered it non-bankable.
There was resentment that Mr Lim, a Chinese Malaysian and an 'outsider' or non-Johorean, should benefit from what was seen as a prime project. The angst stemmed in part from the seemingly small Malay participation in the project despite the Johor state government's equity in it.
Welcome to Johor, the birthplace of the country's dominant political party Umno, the United Malays National Organisation. The state is a place that understands power. And no one understands it better than Ghani Othman, the state's chief minister now in his third term of office.
Chief minister's role
Johor boasts the largest number of federal ministers - four - and an overachiever's supply of deputy ministers and parliamentary secretaries. What that means is that everyone is a leader and Mr Ghani has to canvass a lot of opinions to keep the peace.
He has done just that, with an understated aplomb. Danga Bay's development was largely his effort, according to Johor construction industry officials. Mr Ghani cajoled the critics, compromised when he had to, even sought an audience with the state's Sultan to ensure that the monarch wasn't unhappy that the development was opposite his palace.
Now Mr Ghani may be facing his sternest test yet, presiding over the largest development in Malaysian history, and one that is already attracting criticism. How he plays his cards may decide his future place in Umno and, indeed, in the corridors of power in Kuala Lumpur. Making a global development like the IDR work could give the 60-year-old leader a new lease of political life.
The IDR is a big deal; a Singapore multiplied almost fourfold, and twice the size of Hong Kong. But the US$105 billion development can only succeed with huge dollops of foreign investment - which could be the rub.
To get the foreign input, Mr Abdullah did the logical thing. He relaxed rules governing foreign investment including sacrificing affirmative action policies that favour Malaysia's majority Malays in five areas within the region. Over the years, the policies have become synonymous with the protection of the Malays, Malaysia's majority race and Umno's core constituency. Revoking the policies would therefore incur wrath, as happened when former deputy premier Musa Hitam was pilloried over the Internet after suggesting similar measures even before Mr Abdullah did.
Even so, the suspension of affirmative action to boost business isn't new. Former prime minister Mahathir Mohamad did it twice, most famously in the shape of his 1995 Multimedia Super-Corridor, an area much larger than Mr Abdullah's five IDR zones.
But the IDR was always going to be different. Listen to Rejal Arbee, a former senior editor with the New Straits Times group, the country's largest publisher. 'It looks as if for the sake of the IDR, we are willing to forgo anything,' wrote Mr Rejal in an Internet posting. 'Not just compromising Malay interests but even to the extent of compromising our sovereignty in the region to the Singaporeans.'
Former prime minister Dr Mahathir, at loggerheads with Mr Abdullah for over a year, was more specific. 'If we give more land to Singapore, one day we would lose South Johor just like we lost Singapore,' he told a gathering of academics and businessmen at a forum in University Malaya on Friday. Far fetched or not, the reasoning resonates among some segments of the Malay community not least because the IDR's success is, in large measure, dependent on its proximity to Singapore.
'It's right next to a global centre,' said a senior government official, explaining why the IDR would work. 'We are betting on it. Singapore is what it is now because of foreigners, high-end, high-wage, high-skill fellows. There are going to be more, with Singapore projecting 6 million people going forward, with tourist arrivals slated to hit 17 million. All this will work in our favour.'
Mr Ghani, who is thought of as being anti-Singapore by some on the island, seems surprised that he's thought of in such a way. He thinks the Singapore angle is overblown. 'All this Malay or Malaysian feeling of being inferior to them is just not on,' says the chief minister. 'Everything should be on equal terms, which is what it will be. As for me I have no complex whatsoever. I don't see any problem.'
Selling this to the Malays on the ground and implementing whatever needs to be done in South Johor, however, will fall squarely in Mr Ghani's lap. The chief minister is, together with Mr Abdullah, the co-chairman of the Iskandar Regional Development Authority, the agency overseeing the development.
So far he hasn't put a foot wrong, politically speaking. The enabling legislation for the IDR was delayed because Mr Ghani stubbornly fought what he saw as a surrender of the state's sovereignty to Kuala Lumpur. Indeed, according to a political insider in Kuala Lumpur, Mr Ghani stepped on so many toes that he was seen as an 'impediment' to Mr Abdullah's wishes by some of the premier's aides.
Mr Ghani is something of a political paradox, a self-effacing, bookish personality in a party that often embraces showmanship. To some of the party faithful, Mr Ghani comes across as so much wasted potential: a genuinely clean politician in an organisation with a high tolerance for corruption; a former Colombo Plan scholar and top student at a time when affirmative action was yet to be introduced.
A dean of economics at the University of Malaya in Kuala Lumpur, Mr Ghani got drafted into Umno by Mr Musa, the former deputy premier and a fellow Johorean. By 1995, he was chief minister of Johor but bided his time until 1999 when he contested for one of Umno's three vice-presidential posts - the troika among whom any premier looks for his deputy. The current deputy premier, Najib Razak, for example, was the senior Umno vice-president when chosen for ascension by Mr Abdullah. Although tipped to win, Mr Ghani's candidacy flopped and he has never tried climbing the ranks since: in the last party election in 2004, he made the cut as one of the party's 25-man Supreme Council, but only just. 'He thinks he can never make it in an era of money politics,' said a businessman who knows him well. 'And he won't try.'
Even so, even his closest aides would admit that Mr Ghani isn't charismatic. 'He's just a steady worker, he goes by the book,' said the businessman. 'There is no flash, no grandstanding.' The chief minister seems to think he doesn't need any. 'With the kind of support we will get from Kuala Lumpur, I can see this (the IDR) working,' says Mr Ghani. 'But we will do it in a planned, methodical fashion, nothing will be ad-hoc.'
And how does he see Singapore fitting in? 'There's a relationship of complementarity between the two, of growth centre and hinterland, I accept that,' he muses. 'And as Singapore moves up the value chain, there will be significant spillover benefits on us. There will be an element of competitiveness as well particularly in services. I look at it positively. Like Shenzhen and Hong Kong, the IDR and Singapore will feed off each other, to our mutual prosperity.'
And what of the Johor bureaucracy, what if they don't like what they are seeing? 'No way!' The chief minister shakes his head emphatically. 'I am going to make this work whether they like it or not.'
This is the first of a three-part series on the Iskandar Development Region. Tomorrow: Johor's potential