Author:  Prof. Associate Dr. Mohd Effandi Yusoff

Prime Minister Datuk Seri Anwar Ibrahim’s announcement that Forest City will be categorised as a Special Financial Zone (SFZ), will be a catalyst for Johor to become a developed state by 2030.

Johor Menteri Besar Datuk Onn Hafiz Ghazi has previously said that if the "Johor-Singapore Special Economic Zone" and "Forest City Special Financial Zone" become a reality, Johor has the potential to prosper like Shenzhen.

The initiative to make Forest City the first SFZ in the country will be able to put Malaysia on the world map, especially in the international financial and banking sector.

The move will have a positive impact on economic development through the overflow of benefits received by various layers of society whether from government agencies, industry players, and the general public.

The Prime Minister's decision to make Forest City an SFZ is the right measure, especially to utilise the ecosystem that already exists in the area.

The SFZ will create and form a new financial ecosystem that is complementary and cooperative with Singapore, rather than competing with one another. We can refer to the development models of Shenzhen and Hong Kong. Such complementary cooperation will form a financial "dual-core engine" in the ASEAN region.

For instance, the basic infrastructure is already in place, so the best course of action is to ensure the project can be booming to provide a win-win condition for all parties involved.

Although the venture has just been announced and may take between five to ten years to mature, it will be a catalyst for Johor to reach its true economic potential, which is to emerge as an economic powerhouse in Asia.

Such effort can become a complement to former initiatives, Iskandar Malaysia and further strengthen the corridor and making it the most successful economic corridor in the country.

To burst forth the effort, the federal and state governments need to work hand in hand with the private sector to entice more international investors to invest in the SFZ area at Forest City.

This goal can also be gleaned from the relevant policies released so far. Lower tax rates, more convenient and flexible visa systems, and customs clearance plans have all built substantial attractions for investors and companies.

The move can be made through the introduction of appropriate incentives or the implementation of progressive taxes which give more rewards to international companies entering the local market then form a "siphon effect" and set in motion the formation and implementation of regional industrial chains.

The influx of foreign investments will have a positive impact on the short- and long-term growth of this country.

This is because the influx of foreign investment will also be accompanied by a highly skilled and high-technology workforce and that will indirectly cause the transfer of knowledge and skills to the local workforce. Assist the upgrading of Malaysia's knowledge-based and tech-driven job market.

The inflow of investment will also open more fine job opportunities for locals and address the brain drain, which will help Forest City's image as a future international city befitting its name.

The development of the area is also made in compliance with the criteria of 'Environmental, Social and Governance (ESG) which will indirectly attract industry players with a parallel mission and vision in terms of environmental protection from all over the world to come to Forest City.

This project will also be crucial in achieving Malaysia's sustainable development commitments.