A push for growth in the services sector in Iskandar Malaysia is seen as also benefitting Singapore.

SINGAPORE: A push for growth in the services sector in Iskandar Malaysia is seen as also benefitting Singapore.

The sector is targeted to account for some 70 per cent of Iskandar Malaysia and Johor's economy by 2025.

According to the Iskandar Regional Development Authority (IRDA), this will be a significant shift from 2005, when manufacturing made up 70 per cent of the economy.

The building blocks to enhance the services sector in Iskandar Malaysia are being put in place, such as the Legoland theme park to spur tourism or the Pinewood Iskandar Malaysia Studios to attract film-makers to the region.

"We are witnessing fast and healthy growth from the services industries, especially since the completion of many catalytic projects, namely representing sectors in education, tourism, healthcare and creative (services)," said Ismail Ibrahim, chief executive of IRDA.

Iskandar Malaysia has attracted combined investments worth 133 billion ringgit (S$51 billion) as of January 2014.

IRDA said the services sector accounts for 21 per cent of the investments so far and continues to grow.

The six areas it is promoting include tourism, logistics, healthcare, education, finance and creative services.

"Services sector is the way forward that would one fine day totally represent the economic growth that will happen in transforming this region into one that is of high income," said Mr Ismail.

The services sector is expected to create 640,000 jobs in Iskandar Malaysia by 2025.

Some economists say Iskandar Malaysia's push to develop its services sector will have a positive effect on Singapore.

Francis Tan, economist at United Overseas Bank, said: “For example in Singapore, perhaps we have X billion of dollars of services in terms of production and if we can synergise together with the amount of services that Iskandar Malaysia is producing, then, as a region, we may look a lot more attractive for further investments from all over the world.”

Economists say that with greater cooperation in the services and manufacturing sectors between Singapore and Iskandar Malaysia, there will also be more trading opportunities and greater mobility of labour, which is a plus for both countries.  

- CNA/ec