Prof. Tey Tsung Hang

Iskandar Development Region and regional economic development cooperation

This paper seeks to survey the Iskandar Development Region, launched in 2006, within the wider framework of political economy in Malaysia. It also attempts to contrast it to the other economic corridors recently launched in Malaysia.

Iskandar Development Region

The Iskandar Development Region (IDR) was officially launched in 2006 under the South Johor Economic Region (SJER) project. The Iskandar Regional Development Authority (IRDA) was established with the objective of “develop[ing] the Iskandar Development Region into a strong and sustainable metropolis of international standing”. Accordingly, the IRDA is responsible, inter alia, for “establish[ing] national policies, direction and strategies in relation to development within the Iskandar Development Region”.

An interesting feature of the IDR is the Initial Incentive and Support Package (ISP) that significantly departed from the traditional bumiputera policy by making a concession to foreign investors seeking business opportunities in the IDR. This concession entails, inter alia, tax incentives and entitlement for companies operating within the IDR to employ foreign employees freely within certain approved zones as long as such companies are granted IDR-status.

Basically, eligibility for the ISP is based on six key qualifying activities which have been identified by IRDA: the creative industries, educational services, financial advisory and consulting services, healthcare services, logistics services and tourism.