The signs may be ominous but the Johor state government is quietly confident that money from Singaporean investors will start trickling in very soon.

In the first eight months on the year, the level of investment from across the Causeway has dropped to an alarming level - standing at a mere RM208.9 million, a massive shortfall of the total amount of RM1.9 billion in 2005.

However the Johor State Investment Centre (JSIC) is not worried as it believes that much will happen in the final quarter of the year. JSIC is a government agency under the office of Johor Menteri Besar. It was established in August 2004 to promote Johor as the regional preferred investment location.

JSIC senior manager Mohamed Basir Mohamed Sali told malaysiakini recently that Singapore's investment will multiply in the last three months of the year.

Although the investment from Singapore into Johor until August only amounted to 11 percent of what came in last year, Mohamed Basir however claimed that a major investment project in the pipeline imminently will change the scenario.

He said that the Malaysia Industrial Development Authority (MIDA) will soon announce a the large investment project which is currently waiting approval from the government.

This project will help Johor create a new record in its investment history, he said in a phone interview.

However, there is still no sign of such project to date.

The security worries

Mohamed Basir also said that in his experience, foreign direct investment (FDI) will usually increase during the July to September period and will reach its peak during October to December months.

"I think it is fair that we wait until the full statistic of 2006 is released before we make any judgment."

He however conceded that it was improbable to compare the high investment level of 2005 as that was an "exceptional year" for the state. He did not elaborate on the reasons for the exceptional year.

He also dismissed media reports that the state would be conducting a post-mortem to see why investments in Johor have dropped.

"I never heard Menteri Besar (Abdul Ghani Othman) or state EPU official mention such thing," he said.

He said that Singaporean investors were concerned over two issues security in the state and the attitude of state government towards them - before investing in Johor.

"Singaporeans think Johor is not a safe state, but actually this issue was played up by the media in both countries. This has caused the Singapore's investors to pull the handbrake temporary, but they had come back in the final quarter. "

"Yes, we have some security problems, but they do not involve the whole state, they are limited in certain areas, Johor is still as safe as candy," he said.

What mixed signals?

On the second issue, Mohamed Basir stressed that Abdul Ghani never released statement that said Singapore's investors were not welcomed.

"Singaporeans also asked me if they ere not welcomed in Johor? But Menteri Besar told me: When did I say such a word?"

Due to the similarities of both countries in cultural and political values, Singapore has always been a major investor in Johor.

"We have been working hard to attract them," he added.

Early this month, Singapore Prime Minister Lee Hsien Loong said Johor was worried over the republic's participation in Johor's multi-billion Iskandar Development Region (IDR) and that Singapore's investors have received 'mixed signal' from the state government.

However, this was later denied by Abdul Ghani, replying that foreigners were welcomed to invest in the project.

The Iskandar project, which saw an initial investment injection by the government to the tune of RM5 billion, is seen as the catalyst to offer a strong competition to Singapore in terms of economic development.

Singapore, which was the largest investor of Johor for the past two years, was ranked third after Netherlands and Lebanon for the investment between January and September this year

Bio-diesel plant

On this, Mohamed Basir said Netherlands has been one of the major investors in Johor meanwhile Lebanon was setting up its first bio-diesel plant in Johor.

He expected an economic boom in the coming year with the Iskandar project acting as a catalyst.

"Iskandar will focus on solving and upgrading the region's living standard, security issue, and environment issues."

"This will help to attract high technology and value industry investment. Johor is no longer just welcoming labour intensive, low technology industry."

"Those economy issues and plans focused by the state government in the past few years will be materialised in 2007. Year 2007 is a very positive year," he said confidently.

Tomorrow: Why Singaporean investors evade Johor?

Yesterday: S'pore investors looking away from Johor