Malaysia-Singapore Special Economic Zone Pact Expected by September

Malaysia and Singapore are nearing an agreement to establish Southeast Asia's first cross-border special economic zone (SEZ). The initiative aims to facilitate the free movement of goods and people between Johor, a resource-rich Malaysian state, and the land-constrained city-state of Singapore. The SEZ will encompass 16 economic sectors, including electrical and electronics, manufacturing, and healthcare. The agreement is anticipated to be finalized before a year-end retreat between Malaysian Prime Minister Anwar Ibrahim and Singapore Prime Minister Lawrence Wong.

Malaysian Economy Minister Rafizi Ramli has described the project as a "game-changer" for bilateral ties and expressed confidence that the deal will be finalized by September. Proposed features of the SEZ include a passport-free immigration clearance system, cooperation on renewable energy, and streamlined business approvals. The zone is expected to serve as a gateway for both Western and Eastern investors, including firms from China, to Southeast Asia. Additionally, the area may benefit from a proposed high-speed rail link between Kuala Lumpur and Singapore. The final pact is scheduled to be signed ahead of the annual leaders' retreat later this year.