SINGAPORE — Singapore and Malaysia have inked an agreement to create a new special economic zone for business and investment.

Prime Minister Lawrence Wong and Malaysian PM Anwar Ibrahim on Jan 7 witnessed the exchange of the agreement for the Johor-Singapore Special Economic Zone (JS-SEZ) at the 11th Malaysia-Singapore Leaders' Retreat in Putrajaya, Malaysia.

Speaking at a joint press conference at the end of the two-day retreat, PM Wong said the JS-SEZ will create good jobs and more opportunities for the people of both countries.

"When negotiating the agreement, both sides have actively engaged stakeholders to ensure that the JS-SEZ has the conditions to help our businesses grow together for the longer term," said PM Wong.

"So we are confident about the JS-SEZ, and we look forward to taking it forward."

There are many strengths that can be harnessed from both sides to make the zone a more competitive and attractive venue for businesses to operate from, said PM Wong.

On Singapore's end, the authorities have engaged many businesses who are keen to do more out of Johor, he added.

"The greater potential for the JS-SEZ is not just about Singapore businesses going to Johor, but it's about both sides working together to attract new investment projects globally," said PM Wong.

Marketing the zone as a combined destination will hopefully allow both sides to attract even more global investments, he added.

"It is an important project which will build on the complementary strengths of Singapore and Johor, so that we can both be more competitive, enhance our value proposition, and jointly attract more investments to our shores," PM Wong said.

Datuk Seri Anwar said the JS-SEZ is a unique initiative, as "very rarely you find two countries working together as a team".

Both countries are led by governments that are politically stable, with clear economic policies, he added.

Beyond financial incentives, these characteristics will attract businesses and investments to the new economic zone, Anwar said.

The JS-SEZ, announced in October 2023 during the 10th leaders' retreat held in Singapore, is meant to be an integrated zone for business and investment that will ease the movement of goods and people between both countries.

The retreat is an annual platform for the leaders of both countries to set the overall direction for bilateral co-operation.

PM Wong noted that he and Anwar have met many times since his first introductory visit as prime minister to Malaysia in June 2024, including at regional and multilateral forums.

"We've built up a very strong understanding, friendship, a relationship built on trust with one another, and that anchors our bilateral relationship as well. So this retreat is a useful opportunity to strengthen our friendship even further," he said.

The two men, who are also the finance ministers of their respective governments, met on Jan 6 and 7 for the annual retreat, now in its 11th year. This year marks 60 years of diplomatic relations between both countries.

The two countries are working together in areas such as celebrating shared heritage, and investing in a shared future together, said PM Wong.

He cited agreements exchanged just before the press conference, covering aspects such as higher education.

"We both agree that bilateral co-operation must continue to deliver concrete benefits to both our people, and that's the basis on which we work," said PM Wong.

The two countries are also enhancing and strengthening transport connectivity, an example of which is the Johor Bahru-Singapore Rapid Transit System (RTS) Link, which will commence services by end-2026.

Sustainability is also a key priority for both sides, and the two leaders had discussed and made good progress in co-operation in the field of green energy and sustainability, such as through cross-border electricity trading, PM Wong added.

Both leaders also discussed outstanding bilateral issues during the retreat, said PM Wong. These include airspace, water and the delimitation of maritime boundaries.

"These are all important issues for both our countries. We will continue to discuss these issues holistically and constructively within the overall context of our broader relationship," said PM Wong.

"The issues are complex. We have made some progress, but we still need more time to resolve them... we will continue to engage in good faith and as good neighbours, and I'm confident that working together, we can develop durable outcomes on all of these issues with a balance of benefit on both sides," he added.

Asked about the status of these issues, PM Wong said that since his June 2024 visit, officials have met and had good discussions on the various issues.

"While we would like the resolution to be expeditious, I think it's also important that we give time for the officials to meet, talk to one another, understand each other's positions," he added.

Both PMs are committed to having good-faith conversations and discussions in a manner that is constructive and holistic, while making sure that these outstanding matters "do not ever" detract from the overall relationship of the two countries, said PM Wong.

Anwar said the final settlement on these issues should be a "win-win sort of position".

While these issues have been going on for the last few decades, "I don't think we should wait for the next few decades to come", he added.

The two leaders agree that there should be a short meeting on a quarterly basis to review the matters and compel the respective technical team experts to deal with them expeditiously, said Anwar.

PM Wong also expressed Singapore's full support for Malaysia's chairmanship of Asean in 2025.

Acknowledging the 60th anniversary of diplomatic ties, PM Wong said the two countries can be proud of what they have accomplished together as good friends and close neighbours.

"I am glad to find in PM Anwar a partner who is equally committed to ensuring that our ties continue to flourish and uplift both our peoples," he said.

He added that global challenges and tensions are a very strong and powerful motivation "for all of us to come together and strengthen our bilateral and regional ties".

Anwar said the two PMs had also discussed the importance of working bilaterally and regionally to face the unpredictable global political environment.

In his opening remarks, Anwar noted that Singapore is not only a neighbour, but a very important ally.

Malaysia is committed to enhancing bilateral relations, he added, noting that the two countries had on Jan 7 agreed to collaborations in new areas such as education and energy.

Anwar said that Malaysia looks forward to enhancing investment and trade ties between the two countries, particularly with the JS-SEZ.

On his meetings with PM Wong, Anwar said: "(Our) exchanges have been extremely cordial, friendly and helpful in many, many ways, in terms of our joint effort and commitment to enhance bilateral relations between Malaysia and Singapore."

"I really wish that we could continue and do more together as two great, friendly nations," he added, calling Singapore a "trusted friend".

This article was first published in The Straits Times. Permission required for reproduction.