(Time) - A $28 billion port, tourism and industrial complex called Iskandar Malaysia, is rising at the tip of southern Malaysia. It promises to knit together erstwhile rivals and, in so doing, reshape the regional economy.
When the creaky colonial-era carriages of the Keretapi Tanah Melayu railway still crept between Singapore and the Malaysian capital of Kuala Lumpur, the eight-hour journey felt like slipping back in time. Starting in the shadow of Singapore’s skyscrapers, the train rattled across the gray waters of the Strait of Johor. As it chugged northwest, glass and concrete gave way to jungle. Sprays of vegetation began to leap from the boles of the mossy banyans lining the tracks.
This rail journey is no longer possible — the train stopped running in July 2011, after Malaysia and Singapore resolved a dispute over which country owned a valuable parcel of the track. Now the thick tropical forest may also disappear: One of the most ambitious development projects in the world, a $28 billion port, tourism and industrial complex called Iskandar Malaysia, is rising at the tip of southern Malaysia. It is a massive endeavor that encompasses a territory nearly three times the size of Singapore. It promises to knit together erstwhile rivals and, in so doing, reshape the regional economy.
To compete with heavyweights like India and China, Southeast Asian nations are increasingly looking to pool resources like land, labor and capital. For Malaysia, Iskandar represents an opportunity to reverse a decade of lackluster growth and the flight of its most educated and enterprising citizens. After expanding by nearly 9% on average from the early nineties until the 1997-98 Asian financial crisis, its GDP growth rate has slowed to roughly 5% over the past several years. Oil and gas production, the biggest driver of growth, has been tapering off for nearly twenty years, with Malaysia increasingly reliant on maturing fields. Until 2010, when a rebound began, foreign investment had also been slipping. Malaysia’s stock exchange, a darling of emerging market investors in the early-to-mid nineties, now lags behind the turnover and performance of the comparatively roaring bourses of Indonesia and the Philippines. “We’re at a crossroads,” says Idris Jala, a former executive with oil giant Shell who is now a cabinet minister in charge of jumpstarting Malaysia’s economy.