Record investments fail to ease Johor residents’ daily concerns

KULAI, Johor – As visitors approach Kulai via a four-lane exit from the Second Link Expressway, they encounter a sprawling sales gallery showcasing a “masterpiece” township set against the verdant slopes of the 654m-high Mount Pulai.

Few places embody Johor’s economic resurgence as effectively as this. Between the highway and the mountain, vast tracts of land have been cleared for housing estates, factories and logistics parks – illustrating how Kulai has benefited from nearby Johor Bahru’s economic boom.

By most measures, Kulai has it all: It sits within the Johor-Singapore Special Economic Zone (JS-SEZ), is linked to state capital JB by two new rail services, has access to an airport and a port, and is a data centre hub.

However, at a recent neighbourhood committee meeting in Taman Kulaijaya, residents expressed more concern about clogged drains, worsening traffic and rising living costs than about billion-ringgit investments – a sharp turn from 2019, when Kulai was named the fourth-happiest town in Malaysia.

“There have been so many new developments over the past two to three years, but the roads are still the same... Even the highway exit is still the same,” said Nazib Mohsin, who works in quality assurance in Senai and has lived in the town for more than a decade.

“Our facilities and infrastructure are at a tipping point. We welcome development, but the infrastructure has to catch up.”

Johor has topped Malaysia’s foreign direct investment rankings for two consecutive years, drawing billions of ringgit into advanced manufacturing, logistics, technology and data centres. Yet, interviews with more than a dozen residents and businesses across southern Johor – where much of this investment is concentrated – suggest many feel the benefits have yet to translate into improved job opportunities, better infrastructure, affordable housing and lower living costs.

The disconnect highlights a growing challenge for Johor.

Investment boom, uneven benefits

These bread-and-butter concerns are central to Johor’s July 11 state election, with more than 2.7 million registered voters.

Aziff Azuddin, research director at Iman Research, said that while the state government has focused on macroeconomic initiatives such as the JS-SEZ to drive growth, many Johoreans remain more concerned about issues that affect their daily lives.

“These are the things that in their daily lives, Johoreans feel have not been given enough attention compared with big-ticket projects,” he said. “And when it comes to state elections, more so than federal, local issues matter.”

The state polls are seen as a test of Prime Minister Anwar Ibrahim’s unity government and Johor caretaker Menteri Besar Onn Hafiz Ghazi’s leadership, after the Barisan Nasional (BN) coalition’s resounding success at the Johor state election in 2022.

Recent surveys suggest the economy, rather than race or ideology, is uppermost in voters’ minds. A Merdeka Center poll found younger voters prioritised jobs, housing and living costs, while an Institute of Strategic Analysis and Policy Research survey showed six in 10 respondents cited the cost of living as their biggest concern, followed by infrastructure issues such as roads, drainage and traffic.

Johor’s proximity to Singapore has also pushed inflation above the national average. While Malaysia’s inflation ranged between 1.2 per cent and 2 per cent between May 2025 and May 2026, Johor consistently recorded between 1.8 per cent and 2.5 per cent.

To cope with rising costs, many young Johoreans work in Singapore, where wages benefit from a currency worth about three times the ringgit. Around 300,000 people commute across the Causeway each day for work, forming one of the world’s largest cross-border commuting labour forces.

As a result, the parties contesting this election have made economic woes a centrepiece of their election campaigns.

Both BN and ruling coalition Pakatan Harapan (PH) have centred their campaigns on the JS-SEZ, promising better jobs, affordable housing and improved infrastructure.

The JS-SEZ is a bilateral agreement between Singapore and Johor to establish a special zone for the ease of movement of people, goods and investments. It comprises nine flagship zones focusing on various sectors including tech, advanced manufacturing, healthcare and tourism, covering an area more than four times the size of Singapore on the southern tip of Johor from east to west.

BN’s manifesto commits to creating 200,000 quality jobs, and providing affordable housing and better infrastructure under its Maju Johor 2030 blueprint. PH’s “Johor Untuk Semua” manifesto pledges sustainable employment, affordable housing and incentives to encourage Johoreans working in Singapore to return – with the vision of making Johor the “Shenzhen of South-east Asia”.

“Johor is not starting from zero. The foundation for development and stability has been built over the past four years,” Onn Hafiz said in a statement on June 26.

At the PH manifesto launch on July 3, Puteri Wangsa candidate Maszlee Malik said: “Johor is not for cronies alone. This manifesto is about shared prosperity and safeguarding Johor’s future.”

Nevertheless, smaller parties have capitalised on concerns that increased investments have yet to improve the daily lives of residents.

Former economy minister Rafizi Ramli’s newly launched Bersama party has warned that rising investments could inflate prices faster than wages.

At a Bersama “Mousedeer Truck” rally on June 26, Rafizi said: “When more investors come in, land becomes expensive... Young people will have problems owning property... We’re already seeing apartments costing RM600,000 (S$190,600) and above, while salaries have not increased in tandem.”

According to Malaysian housing affordability monitoring website New Projek, Johor homes fall into the “severely unaffordable range”, as the median property price is more than eight times the median annual household income.

Youth-oriented Malaysian United Democratic Alliance (MUDA) has similarly argued that the benefits of major projects have yet to reach ordinary Johoreans.

Johor has many developments, including the JS-SEZ, yet “only a few get a taste of these benefits”, and job opportunities remain lacking, said MUDA hopeful Rashifa Aljunied at a fund-raising event on July 3. The 26-year-old is seeking to defend the party’s only Johor state seat in Puteri Wangsa.

Even if Johor’s unemployment rate of 2.5 per cent is lower than the 3 per cent national average for 2025, the mismatch between jobs and graduate qualifications presents a problem for the state. In 2024, nearly a third of graduates in Johor were hired for positions that did not match their skills, compared with Kuala Lumpur’s 17.5 per cent.

For residents, job opportunities depend greatly on the industry.

Johorean Derek Tan, 34, who works at a logistics firm in Senai, said his industry is “on fire”. Among the firm’s biggest heavy-haulage jobs are those transporting pre-cast building components to Singapore and for construction projects in Johor.

Yet, for others, the JS-SEZ remains an abstract concept. First-time voter Nur Bella Ahmad, who works as a cashier in Iskandar Puteri, has never heard of it until now.

The 21-year-old fashion-design diploma holder seeks to pursue a bachelor’s degree in a creative field but laments the lack of job opportunities relevant to her qualifications in Johor.

Johor South SME Association founding president Teh Kee Sin said that only businesses in engineering and industrial equipment have started securing contracts linked to incoming investments, while most smaller firms have yet to see meaningful spillover benefits.

In Johor Jaya, resident KS Leong, a 59-year-old property consultant, was more blunt.

“All this investment and all that, I can tell you, it’s nothing for the people,” he said. “Look around you – our infrastructure is really bad. There’s no planning. We don’t even have proper public transport.”

The imbalance is also felt farther north, where residents told The Straits Times that factory closures have pushed more young people to seek work in JB, Kuala Lumpur and Singapore.

“Ideally, I would love to work in Muar, but the job opportunities aren’t there,” said Muar native Hazim Mustafa, 23. He chose to work at a factory in Melaka, about an hour’s drive away, so that he could be near his parents.

North-south economic divide

The stark contrast in economic development between northern and southern Johor has also become a talking point for some political parties in the lead-up to the state polls.

Unlike southern Johor, where investment has clustered around JB, the JS-SEZ and data centres, northern districts remain more dependent on agriculture and traditional manufacturing.

Moving about 50km north of Kulai, the scenery changes dramatically: Rows of oil palm plantations, durian orchards and poultry farms are spread out across central and northern Johor, a relatively underdeveloped hinterland.

Such regional economic imbalances have become a political flashpoint, with PH accusing BN of focusing too heavily on JB and the state’s south.

To reinforce its message, Transport Minister Anthony Loke relaunched the long-underused Segamat Inland Port on June 25, saying it could revive northern Johor by strengthening logistics links.

BN has rejected PH’s accusation, pointing instead to the Johor Economic Transformation Plan, which aims to drive development across all 10 districts.

Onn Hafiz has said that each district would be developed based on its socioeconomic priorities, with northern Johor anchored by the proposed US$2 billion (S$2.6 billion) Maharani Energy Gateway in Muar, an energy hub and deep-sea port expected to create 45,000 jobs.

BN’s Anuar Abd Manap, who is defending a state seat in Segamat district, said the Johor government had persuaded the federal government to include his constituency in the East Coast Economic Region, allowing it to benefit from agriculture grants.

“We have large-scale Agro Mix Farms producing high-value products such as chilli and rock melons, alongside palm oil commodities. It is wrong to say the state government has marginalised Segamat and northern Johor’s economy,” he told ST.

Different measure of progress

Serina Rahman from the National University of Singapore’s Department of South-east Asian Studies said Johor’s record investment figures do not necessarily translate into a sense of progress because residents measure development differently from policymakers.

Johor drew a record RM110 billion in approved investments in 2025 – the highest among all the states and more than a quarter of Malaysia’s total, according to the Malaysian Investment Development Authority.

Many voters back representatives they believe can deliver, regardless of which coalition governs at the state or federal level. But when local issues remain unresolved, they often fall back on familiar political loyalties based on race, party or community, she said.

“Investments need to be spread out but do people really want their towns to turn into the chaos of JB? Not everyone wants skyscrapers, crowded roads and (traffic) jams,” she added.

“Convenience, infrastructure, amenities – yes. But development itself needs to be redefined and questioned. What exactly do people want, and within what limits?”