JOHOR BARU - A "nice complementary space" is developing between Singapore and Johor for businesses, as more companies in Singapore look to the Iskandar Malaysia development corridor as a place to base their operations, said Singapore's Deputy Prime Minister Tharman Shanmugaratnam.
"There'll over time also be increasing pressures on our small and medium-sized businesses, because of the shortage of labour in Singapore as well as of land... Malaysia is a logical hop away, easy in terms of operational flexibility and logistics," he said.
Mr Tharman, who is also Finance Minister, was speaking to reporters yesterday on the sidelines of the eighth World Islamic Economic Forum (WIEF), held in Johor Baru for the first time.
Iskandar Malaysia, the southern Johor state's investment corridor, has drawn RM95 billion (S$38 billion) worth of investments since its launch in November 2006.
Singaporean interest and participation rose after 2010, when the two countries settled a 20-year dispute over railway land.
Mr Tharman made his comments at an event where Singaporean billionaire Peter Lim announced his decision to build a race circuit in Johor.
Mr Lim, a motoring enthusiast, had been courted to invest in Singapore's stalled Changi Motorsports Hub, but said yesterday that he was inhibited by the high costs in the Republic.
Mr Tharman said these are "ultimately business decisions".
"The job of the Government is to ensure that with limited land, limited labour, limitation of resources generally, you have a level playing field and you have fair pricing," he said.
"Some businesses, based on their business models, will find it very worthwhile to grow in Singapore... but (others may) rather make use of opportunities in Malaysia and elsewhere, where you have labour available at a lower salary and more availability of land. That's how Singapore itself grew."