Iskandar Malaysia eyes Mideast funds

Published: 2008/09/26
BTimes

DUBAI: Malaysia is turning to Middle East investors to boost investments in a special economic zone in Johor as financial turmoil in the US slows interest from overseas.Iskandar Malaysia, three times bigger than Singapore, would be Malaysia's largest economic zone. The government says it should create 800,000 jobs and attract US$100 billion (US$1 = RM3.43) in investment over 25 years.Its proponents say it could be Southeast Asia's answer to China's Pearl River delta, a manufacturing heartland that turns out more than a quarter of China's worldwide exports.Speaking ahead of the Gulf Arab region's largest real estate exhibition in October, Arlida Ariff, managing director of Iskandar Investment, said the project was on track, having secured up to August this year RM39 billion, 80 per cent of a RM47 billion target by 2015.

"It's a new market (Middle East) for us and an area Malaysia had not really tapped in the past," she said."Those markets are not as affected by the financial crisis in the US and Europe."Malaysia has been a magnet for Middle Eastern investors flush with petrodollars who have been snapping up banks, hotels and malls.So far, much of the investment in Iskandar Malaysia from the Gulf Arab region has gone into real estate.Islamic lender Kuwait Finance House, Abu Dhabi investment agency Mubadala Development Co, Aldar Properties and Dubai-based Limitless are among the names that have signed up for the multi-billion-dollar scheme.

Arlida, previously the planning manager for the developer behind the Petronas Twin Towers in Kuala Lumpur, said investor interest remained with "the exception of financial services"."We had ambitions to create a new financial district and of course we wanted to attract names like Morgan Stanley and Lehman Brothers to operate in the special economic zones, but obviously some no longer exist ... we will have to continue attracting other names," she said.Iskandar Malaysia has managed to bring in some multinationals like General Electric and Arlida expects to seal a deal with an international theme park operator by year-end to develop one of three leisure parks in the 2,200 sq km economic zone.Reports in April said the government was in talks with Walt Disney. "We have been in conversations with most of the major theme park operators round the world, but with the financial crisis everyone is fairly careful right now, but we hope to announce a deal with at least one by year-end," Arlida said, declining to identify the companies it is in talks with.She said infrastructure works, which the government and utility firms are funding at a cost of about RM10 billion, had started. - Reuters