Bloomberg TV Malaysia’s Cynthia Ng examines slowing growth in Iskandar’s real estate sector and the prospects for Johor Bahru.
The report states that 650,000 jobs have been added in Iskandar between 2006 and 2014. It also references a forecast for Iskandar to add 800,000 more new jobs by 2025.
The report pushes the notion that the housing market has been overdone and other areas (health care, tourism, education, banking…) should be targeted by investors. Manufacturing is a significant focus and has been doing fairly well (it is the only area with more investment than housing).
I raised the issues mentioned in the report (such as the over-reliance on luxury condo development) in my 2014 post Iskandar: Present and Future (and in other posts).
Once again the main culprit is burning of forests in Indonesia. The map shows the darkest haze over the sources of the fires in Indonesia In the last week Melacca, Sengalor and even parts of Sarawak have had even worse pollution than Johor Bahru.
The situation is expected to continue until the rainy season puts out the fires in January. There is firefighting ongoing but it is not able to put much of a dent in the massive outbreak of polluting fires.
The Malaysian Ringgit has collapsed in the last 6 months. This is largely due to the large amount of consumer and government debt (that I mentioned were problems for the Malaysian economy previously) with a large amount of that debt help by foreigners, the collapse of the natural resource prices (oil and gas and others) and dumping of Malaysian assets by investors losing confidence in Malaysia’s government and economy.
The economy is actually surviving better than you could hope given the problems listed above. The economy continues to grow, even if the rate of growth has decreased. The most serious problems remain the high debt level and finding some way to replace natural resource income. It also puts a spotlight on corruption problems which are easier to ignore when economic growth is strong.
The chart shows the recent collapse of the Ringgit versus the US $ (the chart shows the 10 year history of exchange rates). The Ringgit has collapsed not just against the USD but also other currencies (for example reaching an all time low against the Singapore $).
Malaysia still has strong potential but the risks have increased greatly. The collapse of the Ringgit is an indication investors have lost confidence in Malaysia’s ability to address the long term issues with the economy. Part of the problem is natural resource income (including oil and gas and palm oil) have allowed Malaysia to not address issues and still prosper. Without very strong natural resource pricing propping up the economy the debt load and lack of confidence proved too great and the Ringett collapsed.
I have mentioned before that the most important factor to the economic potential of Iskandar and Johor Bahru is the extension of Singapore’s MRT to Johor Bahru. I mentioned being skeptical of the claimed timeline years ago. And, in fact, that timeline has proven to be wrong.
Map shows the most sensible place for the first station in JB but that hasn’t been decided yet. Map by Seloloving
Hopping onto an MRT train and arriving in Johor Baru is unlikely to be a reality before 2020, as Malaysia has yet to determine a station site for its end of the line.
This Rapid Transit System link was first announced by Singapore and Malaysia in May 2010, and was initially targeted to be ready by 2018.
Rail construction experts said even if work started today, the line would be completed by 2020 at the earliest. But work is unlikely to start any time soon because no decision has yet been made on where the JB station will be.
And this article is only addressing 1 Johor Bahru MRT station. While that would still be useful. The discussion 4 years ago was starting with 5 stations in Johor Bahru which seems like a much more sensible starting point. Getting to 5 stations by the end of 2021 seems unlikely unless those responsible change the approach and treat this as a critically important project.
Tanjung Piai National Park is the Southernmost point in mainland Asia – located in Johor, Malaysia. The park is about 80 km from Johor Bahru.
The video shows my view as I walked through a mangrove forest and emerging onto the Johor Straits. The video zooms in to see part of Singapore (since Singapore is an island off of Asia this point is the southernmost point on mainland Asia instead of Singapore). And if some in Singapore try to claim that title, which some do, then why not Indonesia?
Cheng Ho Cultural Museum is a small museum in Malacca dedicated to the memory of Cheng Ho (the more modern conversion to an English name calls him Zheng He). It is believed that the present Museum is situated on the original site of Guan Chang built by Cheng Ho, the Ming Grand eunuch, about 600 years ago. His fleet of several hundred ships sailed 7 times to the Western Ocean from China between 1405 and 1433.
Historic timeline of Malacca
Historical records reveal that Ming Dynasty’s Admiral Cheng Ho (Zheng He) visited Melaka at least five times during his famous seven voyages to the Western Ocean (Southeast Asia, Indian Ocean, Middle East and Africa).
I agree, JB has much to offer tourists and room to improve. Making locations like Jalan Tan Hiok Nee attractive to tourists is important. That location can provide a distinctive JB feel (not just one of 1,000+ malls all over SE Asia that really are all basically the same). Peppering it with small shops and art galleries and food and museum and street art is great.
And obviously what is desired is a nice walkable place that has history. JB is trying to do the same with the new “riverwalk.” But if you then allow people to park cars and motorcycles and vendors to block the sidewalk you severely degrade the user experience. You can retain those that hate malls and will put up with anything to avoid malls. But if people can’t walk without dodging all sorts of obstacles they will just go to malls and go to other cities. They won’t tell their friends about this nice old town they should visit.
Building up tourism often doesn’t take very brilliant ideas. What it does take is attention to detail; and continued effort to create a great experience. You see wonderful drawing of what new developments will be they always have people walking on clear sidewalks. Then go walk around downtown JB and you will find sidewalks are often blocked. Still JB is much better in this aspect than Penang. A big reason I decided not to live in Penang is you couldn’t walk around with ease.
Patience and a desire to make an effort to follow up and keep streets walkable is something most locations don’t have. And it is one big reason malls do well, they make it easy for people to walk around (though actually KSL mall has jammed in so many vendors in some narrow locations they even mess up walking inside a mall which is not easy to mess up). But if JB (or other locations) pay attention to making the experience enjoyable for tourists they will benefit.
The current economic conditions make tourism even more important for Malaysia. Tourists bring in foreign currency, buying the Malaysian Ringitt (and thus supporting the currency which has been getting crushed).
Make Malaysia My 2nd Home (MM2H) is the program started by Malaysia in 2002 to encourage expats to stay in Malaysia by offering a long term (10 year) visa. The MM2H program is a very good idea to aid economic development in my opinion. It brings in foreign currency which is very useful: both from fixed deposits and spending by expats.
The currency help is especially helpful right now. The Malaysian Ringitt has collapsed in the last few months to just 3.57 MYR to the US $ now. It was stable at about 3 a couple years ago and slowly declined to 3.3 over a couple years before the recent collapse. The collapse is due to high government and consumer debt in Malaysia and the recent collapse of oil prices. Malaysia was running up large debts even when oil prices were high and the danger of doing so has come home to roost.
The MM2H program targets retirees and future retires and provides a relatively small but still consistent and useful inflow of hard currency which helps support the Ringitt (the recent collapse would be even worse without this support).
Since the program was started in 2002, 27,000 expats have been approved.
*data for 2014 is for 11 months, through November 2014.
China participation has exploded to 40% of the total in the last 2 years. From 2002 through 2012 China was granted 18% of MM2H visas.
It appears likely 2014 will finish with the 3rd largest number of MM2H visa granted just behind 2013 and 2012.
North America had 75 in 2014 and 1,017 total. South America has just 24 total. Africa had 31 in 2014 and 318 total while Oceana (which includes Australia and New Zealand) had 52 in 2014 and 743 total. Europe overall had 194 in 2014 and 3,553 total while Asia had 2,500 in 2014 and 21,212 total (which is 79% of all MM2H visas).