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Singapore-Johor economic model stretched by Covid-19

Daniel Moss for Bloomberg
Daniel Moss for Bloomberg10/26/2020 11:38 AM GMT+08  • 11 min read
Singapore-Johor economic model stretched by Covid-19
Is the border between Malaysia and Singapore economically meaningful? Is Johor, in essence, an industrial suburb of Singapore?
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It’s late afternoon and the century-old bridge joining Singapore and Malaysia should be starting to clog with the evening commute. Viewed from a boat in a narrow sea lane, only a few trucks and the odd car make their way across. The paucity of traffic on one of two road crossings between the countries reflects the toll Covid-19 has taken on their vital economic ties.

Singapore split from Malaysia in 1965 and built a city-state that became a hub for global business. For all of Singapore's attributes, commercial links with its ex-spouse underpin important parts of its success. The southern Malaysian state of Johor is the linchpin of those ties. The border is much more than a small sea lane: water, power, labour and food flow between Singapore and Johor. The eggs I ate for breakfast were probably laid there.

People can earn more money in Singapore, while its rapidly ageing society and dwindling fertility rate have created labour shortages. It's far cheaper to make stuff in Malaysia, but a lot of factories rely on Singapore to reach global markets. Buying property in Johor is more affordable, too. Many of the condominiums that line its shores are owned by Singaporeans.

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