Iskandar billions yet to reach public’s pockets

It has been three years since Prime Minister Datuk Seri Abdullah Ahmad Badawi first announced the Iskandar Development Region to boost the economy in south Johor.

Some 37 months and 11 days plus RM41 billion in investment pledges later, businesses in the area are still waiting for this boost.

In fact, they are finding themselves in the middle of an economic slump.

The Malaysian Insider understands that this evening, yet another mega project in what is now known as Iskandar Malaysia will be announced in the form of an RM800 million Legoland theme park, Asia's first.

Abdullah will witness the signing of a joint venture between Iskandar Investment, the investment arm of Iskandar Malaysia, and Merlin Entertainments Group, who represent the interests of Danish toy building blocks manufacturer Lego.

Add to this the RM40.25 billion claimed by Johor Menteri Besar Datuk Abdul Ghani Othman already committed, and Johor should be looking forward to coasting through the current economic slump.

But numbers on paper do not seem to be translated into real business for small-medium enterprises or the labour force here.

South Johor SME association president Teh Kee Sin told The Malaysian Insider that local entrepreneurs are yet to reap any trickle-down effect, as in fact, tangible and physical evidence of investments are rare.

"We do not feel the benefits as developments have been slow," he said.

Most of what has been put in place is merely infrastructure, but actual trade and business have not yet mushroomed in Iskandar.

Speaking to The Malaysian Insider, state opposition leader Dr Boo Cheng Hau (DAP-Skudai) claimed that the RM460 million rail link between Tanjung Pelepas Port and Senai airport has not been utilised and new factory lots were only seeing 10 per cent occupancy.

Even these infrastructural projects, according to Teh, have been awarded at federal level, leaving local contractors high and dry.

Meanwhile, SMEs are forced to do everything they can to control running costs. Keeping inventories under strict control is perhaps simply about good management.

Despite Abdul Ghani quoting statistics from the Malaysian Industrial Development Authority, saying that at least 9,757 new jobs had been generated in Iskandar Malaysia with the investments in the manufacturing sector, SMEs have been forced to reduce wage bills.

Teh said that they have freezed hiring, eliminated overtime, cut hours, implemented three or four-day weeks and retrenched — in order of ascending desperation — as order books have been hit by a 20 to 70 per cent reduction in sales.

With today's announcements to come after a high-level progress update meeting between Abdullah, Abdul Ghani and top Iskandar executives, the questions that need to be asked are not about how big the project is becoming but how much of it is being delivered to the ground.

With another two theme parks set to join the 200-hectare Legoland, which should be completed by 2012, Johoreans may be able to look forward to some fun and games.

However, all play and no work makes Johor a depressed economy.

-TMI