INTRODUCTION

Understanding the population dynamics of a region is crucial to any examination of its socio-economic development. This chapter examines the population dynamics in the SIJORI (Singapore, Johor and the Riau Islands) Cross-Border Region with a focus on the key years of 1990, 2010 and 2030. Official data is used for 1990 and 2010, and projections are made for 2030.

The accuracy and relevance of any statistical analysis depends on the data used. Therefore, understanding the sources and quality of the data is the first important step towards interpreting the demographic situation in any country or region. As SIJORI is an aggregation of three countries with different systems of collecting and publishing statistics, this chapter will devote some space to making these statistics consistent and comparable, as well as explaining their implications. The data will provide perspectives on the region's total population and its distribution within it from 1990 to 2010, as well as demonstrate how SIJORI will change demographically with respect to its population size, age-sex-ethnic composition, and geographical distribution by 2030. The projections for the year 2030 will be based mostly on official government projections, with some modifications. Three main demographic indicators will be examined, namely, fertility, mortality, and migration in SIJORI, followed by a discussion of the population's sex ratio, as well as age and ethnic composition from 2010 to 2030. This chapter will conclude with an evaluation of the implications of the changes in SIJORI's demographic characteristics.

TRANSIENT POPULATION AND POPULATION PROJECTION

There are two ways to measure population — de facto and de jure. De facto measurements entail counting all individuals who happen to be present in a given area at a given time. De jure refers to the “usual residence” of individuals by applying a minimum period of time in an area before they are recorded as living there. Individuals who do not meet the minimum period of stay are considered part of the “transient population” and are not recorded in the population census.

Singapore, Malaysia and Indonesia follow the de jure approach, albeit with some differences. The threshold in Johor and the Province of Riau Islands (hereafter called PRI) is six months. In these cases, individuals who stay at least six months or who intend to stay for more than six months are recorded as part of the population (Department of Statistics Malaysia 2005; Badan Pusat Statistik 2009).

INTRODUCTION

Trends in the movement of Singaporeans to Johor and Batam reflect the city-state's financial leverage over Malaysia and Indonesia within an economic configuration known as the Singapore-Johor-Riau (SIJORI) Growth Triangle or Cross-Border Region. A SIJORI Growth Triangle was first proposed in 1989 by Singapore's Economic Development Board and later reconceptualized as the Indonesia-Malaysia-Singapore Economic Growth Triangle (IMS-GT) in 1994. This arrangement was conceived by a “vision of economic complementarity” which aimed to achieve mutual growth among these geographically proximate territorial units where Singapore would supply capital, and Johor and Riau would supply low-cost land and labour (Bunnell et al. 2012, p. 466).

Within Riau, Batam Island has received substantial foreign investment since the 1990s, the bulk of which comes from Singapore; this includes joint-ownership of industrial estates such as the Batamindo Industrial Park (Bunnell et al. 2012, p. 469, citing Azis 2010; Grundy-Warr, Peachey and Perry 1999, p. 310). The flow of Singaporean capital to Batam has naturally been accompanied by the movement of Singaporeans onto the island to oversee company operations. Most work for Singaporean companies seeking to capitalize on cheaper access to land and labour.

On the Malaysian end, robust cooperation between Singapore and Johor was initially encumbered by historical tensions between both countries, but by early 2007, the Malaysian government had officially launched Iskandar Malaysia, which is seen as a “strategic zone for bilateral cooperation” between Singapore and Malaysia (Ormond 2014, p. 13). The aim of Iskandar is twofold: to compete with Singapore to attract industrial development and foreign direct investments; and to cooperate with Singapore to accommodate the city-state's desire for space and lower labour costs; while providing Johor Bahru with capital and know-how. Between 2006 and January 2014, Singapore was the largest foreign investor in Iskandar, investing approximately S$4.2 billion (Kotwani 2014).

In addition, property realtors in Iskandar have been targeting Singaporeans, wooing them with bigger homes at significantly lower prices compared to Singapore and within close proximity to international schools and the island-state (Ong 2011; Ahmad 2011). It is estimated that the number of commuters between Johor and Singapore will double when Iskandar Malaysia is complete (Rizzo and Khan 2013, p. 154) and current data indicates that up to 17 million trips were made by Singaporeans into Johor in 2013 (Kotwani 2014).

INTRODUCTION

The commercial success of ethnic Chinese firms (especially those from East Asia) during the post-World War II decades has sparked considerable research into their management models. The focus is devoted particularly to the Asian economies where the ethnic Chinese constitute a considerable portion of the entrepreneurial class, with ethnic Chinese share of market capitalization amounting to: 81 per cent in Singapore and Thailand; 73 per cent in Indonesia; 69 per cent in Malaysia; and 50 to 60 per cent in the Philippines (e.g. Jomo and Folk 2003; Menkhoff and Gerke 2002; Redding 1990; Tsui-Auch 2004). Despite the seriousness of the 1997 Asian Financial Crisis and the 2008 Global Economic Crisis, many of these ethnic Chinese firms have weathered the fallout relatively well and continued to thrive in their business ventures. Some scholars (the culturalists) have attributed the success of the ethnic Chinese firms and entrepreneurs to a unique “cultural” capacity for them to cooperate amongst themselves as they are grounded in “a set of beliefs and values which lies behind the behaviour of Chinese businessmen” (Redding 1990, p. 79). However, there is another school of thought (the institutionalists) that unpacks such activities by considering the shifting institutional contexts that these firms are embedded in, while not entirely negating the “cultural” aspects of the ethnic Chinese (e.g. Gomez 2002; Verver and Dahles 2013). Put another way, the “bamboo network” must not be viewed purely along ethnic lines for it is also shaped by business and political expediency in the specific Asian economies (Tipton 2009). Detailing the internationalization of Singapore's ethnic Chinese firms that have invested into the neighbouring Southeast Asian economies, this chapter shows that these perspectives exist side-by-side and produce a multiplicity of business linkages and power relations, all of which are deployed whenever the need arises.

While Singapore has established itself as a prominent investor since its independence in 1965, particularly to neighbouring Southeast Asian economies, there is relatively little research that focuses on the food fish farming industry. In addition, there is also a paucity of analysis that links the outward foreign direct investment (FDI) movement of the Singaporean firms to the state-society relations of the city-state. Consequently, one is left wondering about the relationship between state policies (such as those pertaining to ethnic ties) and firm dynamics, and how this shapes the industrial structure of the Singaporean food fish farming industry.

INTRODUCTION

Twenty-five years ago, the governments of Singapore, Malaysia, and Indonesia agreed to jointly promote the city-state, the state of Johor in Malaysia, and the province of Riau in Indonesia. Bearing a range of labels, but most frequently referred to as the SIJORI Growth Triangle, this initiative sought to capitalize on the territories’ proximity, distinct factor endowments, and good logistics connections to present investors with an integrated “package”.

The concept was first articulated by then Deputy Prime Minister Goh Chok Tong of Singapore in late 1989, who referred to a “Triangle of Growth”. The Triangle initially encompassed the city-state, Johor to the north, and Batam Island in Riau Province to the south. The following year, the concept was endorsed by President Soeharto of Indonesia and Prime Minister Mahathir of Malaysia, and expanded to encompass the entirety of Riau Province. In 1994, a Memorandum of Understanding was signed by the governments of Singapore, Malaysia, and Indonesia to jointly develop and market the area (Phelps 2004, p. 348).

This concerted commitment was driven by the specific investment needs of the three countries. Singapore was in the midst of a deep restructuring process, and faced rising land and labour costs as well as an appreciating currency. This led to the country's regional industrialization strategy. This sought to: develop capabilities for the construction and administration of industrial properties in Asia; and encourage local and international investors to upgrade their operations in Singapore and relocate lower value-added operations to locations close by — often in parks owned by Singaporean government-linked corporations (Yeoh, Worthington and Wong 2003, p. 45).

Malaysia, for its part, was seeking to develop its industrial sector and deepen its technological capabilities. And, following a decline in commodity prices in the 1980s, the state of Johor was anxious to develop its manufacturing sector and compete with the incumbent industrial centres of Kuala Lumpur and Penang. Leveraging on its access to the city-state via a 1.2 kilometre bridge, it aimed to attract both Singaporean and international capital in higher technology sectors such as electronics (JSEPU 1989, pp. 124, 127; EEAU 1995, p. 43).

Indonesia had also long sought to attract capital and technology from Singapore through Batam, which was a mere 20 kilometres away. Efforts began to develop the island from the late 1970s, and consisted of expedited investment approvals as well as additional infrastructure expenditure

INTRODUCTION

The flow of people, goods and capital across political boundaries continues to deepen and expand. The Singapore-Johor-Riau (SIJORI) Cross-Border Region exemplifies this expansion, and growing integration is creating a myriad of impacts for the region's people and parent states (Rizzo and Glasson 2011; Ibrahim and Ali 2013; Pomfret 2011). Enmeshed in this growing connectivity are the inescapable ways that natural resources and environmental systems likewise transcend political boundaries. In the SIJORI region, environmental stresses in the form of haze from forest fires (Ewing and McRae 2012), smog from transportation, and effluents from industrial processes (Sembiring and Ewing 2014) all have the potential to cross boundaries. Environmental systems also create the potential for symbiosis, which is manifest in SIJORI most clearly in the water sector.

Singapore has depended on water imports since its founding, and has looked to the relatively water abundant neighbouring catchments in Johor and Riau as key parts of the solution. Johor came to dominate Singapore's external water sourcing, with Riau showing potential as an additional or alternative supply that has been explored but not made operational. This chapter focuses on Singapore's water imports from Johor, and investigates the potential impacts of Johor's economic growth and attendant social changes on future water supply to Singapore.

The chapter begins with a snapshot of the Singapore-Johor water relationship alongside Johor's rapid development, emphasizing its origins, drivers and primary characteristics. It then explores how these developments relate to the water resources upon which Singapore currently depends, from both quantity and quality perspectives. The latter half of the chapter analyses the wider relationship between Johor and Singapore — both as partners and competitors — along with the role that Riau has played as a potential water source. The chapter concludes with guiding questions for future thinking on how these parties might manage shared resources and further economic integration.

BACKGROUND TO THE SINGAPORE-MALAYSIA WATER RELATIONSHIP

Johor has experienced phenomenal economic growth in recent years. This is a reflection of Malaysia's national economic growth trajectory, the presence of delineated growth corridors in the state, and Johor's dynamic relationship with Singapore. While Johor's growth has positive aspects on both sides of the border, there are also a number of questions about how rapid development in the state might affect the quantity, quality and price at which water is supplied to Singapore in the future.

INTRODUCTION

This chapter describes the political and institutional setting of the Riau Islands (Kepulauan Riau), Indonesia's province that forms part of the Singapore-Johor-Riau (SIJORI) Cross-Border Region. More focus will be given to three parts of the Riau Islands Province (henceforth PRI) which are closest to Singapore: Batam, Bintan, and Karimun (henceforth BBK). Special attention will be directed towards Batam, the industrial hub and population centre of the province.

Batam holds a unique position in Indonesia's political-economic history because of its special privileges as an area exempt from some taxes and duties. Batam's economic development model — as well as the fact that it is only 20 kilometres away from Singapore — has attracted large amounts of foreign and domestic investments, provided jobs and other opportunities for many Indonesians, and turned the island from a sleepy village of 6,000 people in 1971 (Tim Peneliti Hubungan Internasional 2001) to a bustling city of 1,065,000 people in 2012 (BPS Kepulauan Riau 2013).

Batam's development model has been expanded to the neighbouring islands of Bintan and Karimun, and has inspired Indonesia to revise its laws governing foreign investment and free trade zones in 2007 and adopt a new law governing special economic zones in 2009. Batam has also endured various political changes which have taken place in Indonesia: from the top-down era of President Soeharto to the local autonomy era since 2000. Many of these political changes were beyond Batam's or even PRI's sphere of influence but nevertheless had to be endured.

This chapter is made up of six sections. The first section provides a quick overview of PRI's geography, demography, and economy, leading to a justification as to why attention will be given to BBK. The second section provides a brief overview of the Indonesian political system as a background of PRI's institutional setting. In the third section, BBK but especially Batam is explored in more detail as a case study in the political history of free trade zones in Indonesia. This is intended to provide readers with an understanding of Batam's developmental trajectory from an institutional point of view, the debates that it has triggered, and the regulatory changes that followed suit. The fourth section explains the rapid growth that took place in Batam from the 1990s onwards and its social and environmental consequences.

INTRODUCTION

The Singapore-Johor-Riau (SIJORI) Growth Triangle was first proposed on 20 December 1989 as an agreement between Singapore, Johor and the Riau Islands to exploit their geographical proximity and resource complementarity as a combined region. The idea behind the Growth Triangle was that Singapore's strengths in higher value manufacturing, world class infrastructure, financial resources and strong relationships with multinational companies (MNCs) would profitably complement Johor's and Riau's endowments in cheaper and more abundant land and labour. The development of SIJORI was to be led primarily by the private sector, with governments facilitating the flow of goods, services, investment and people. On 17 December 1994, this subregion was renamed the Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT) and formalized with the signing of a Memorandum of Understanding.

In the SIJORI agreement, Singapore's dominance in the triangular partnership has been obvious and outsized — it has been the principal investor and major destination of trade flows. As costs in Singapore rise, the benefits of the agreement have become more telling. Yet, political issues remain a bugbear in further advancing this cooperation. Hence, as we discuss the merits of the SIJORI agreement, the main questions that must be answered are: Can Singapore become a global city like London or New York without having the immediate hinterland that those cities have? Can the three countries put aside their political differences for mutually beneficial growth? Can the Riau Island-Johor side of the triangle develop?

Currently, the factor endowments in the three regions differ. Singapore's strengths include its highly skilled labour force, well-developed infrastructure, and security and stability. However, it lacks land and other natural resources and its focus has thus been on high-value manufacturing and services. On the other hand, Johor and the Riau Islands both have an abundance of land and labour. Production is much cheaper than in Singapore but these two regions lack technology and capital inputs. Therefore, there may be potential synergies that could be unlocked in the agreement that would result in the region becoming competitive, productive and vibrant enough to compete with China. The advantages that we envision are: the re-allocation of land and labour for higher-value uses; increased scale and diversity; leveraging off each region's competitive advantage; and the benefits of increased competition.

INTRODUCTION

Singapore's air-traffic has grown at an astounding rate: the number of passengers has quintupled since Changi Airport opened in 1981 and tonnes of airfreight movements have risen by a factor of ten. In great part, the increase of flows articulated by Changi has been central not only for the development of Singapore but also — as this chapter argues — to the growth of its related larger territory: the Singapore-Johor-Riau (SIJORI) Cross-Border Region (CBR). Through fieldwork conducted in Singapore, the State of Johor in Malaysia and the island of Batam in Indonesia, this chapter outlines an ongoing investigation into the impact and potential that “aeromobilities” have on processes of urbanization and regional integration within this wider region.

Specifically, the chapter explores the air-cargo networks articulated by Changi throughout this larger territory. It analyses the spatial manifestations and implications for cross-border regulatory regimes shown in two case studies: (1) the trade of taxfree “perishable” goods, such as fresh cut flowers and ornamental fish organized by local small and medium enterprises (SMEs) across SIJORI's rural hinterlands; and (2) the offshore production of “high-value” electronics by multinational corporations (MNCs) and their transhipment between Changi and the industrial free-trade zones of the SIJORI region. In doing so the research uncovers how, in playing both active and reactionary roles in urban development beyond Singapore's national borders, Changi Airport has enabled companies to expand their commercial activities across the SIJORI Cross-Border Region.

Finally the chapter investigates the development of “low-cost” hybrid trans-border air-and-bus and air-and-ferries combinations put in place by SIJORI's secondary airports — namely Hang Nadim in Batam and Senai in Johor. While Changi remains the international hub, overshadowing by its capacity and connections the smaller airports on the fringe, these are starting to develop inventive solutions to compete with Changi. In doing so, the chapter argues that coming changes in Singapore's airspace control, coupled with the rapid development of aviation in the region, calls for Changi's hub to expand its catchment area even further across national borders by collaborating with these smaller regional airports.

In conclusion, the paper posits that Changi Airport, along with its related transport links, is a critical lens for re-examining and broadening Singapore's cross-border perspective and questioning how this larger territory is being redesigned to facilitate the production as well as global circulation of goods and passengers.

INTRODUCTION

The state of Johor is in transition. On the political front, one of the striking trends of Malaysia's 2013 General Elections was that over 81 per cent of the Chinese vote went to the opposition. This loss of Chinese votes was quickly dubbed the “Chinese tsunami” by the ruling coalition, the Barisan Nasional (BN). This label proved erroneous because the BN actually received a lower share of the vote from Malay and Indian voters as well (Izwan 2013). According to studies elsewhere, the Chinese vote in the state of Johor dipped from 52.7 per cent in 2008 for the BN to 21.3 per cent in 2013 while the Malay vote for the BN in the state saw a slight increase from 81.1 per cent in 2008 to 81.9 per cent in 2013 (Merdeka Center 2013). Among the host of electoral issues were rising property prices (Hong 2012), corruption and transparency in government (Low and Green 2013), as well as a clean-up of the electoral roll (Merdeka Center 2012). Meanwhile the BN's loss of support from urban voters was attributed to the three “Cs”, namely, “corruption, cost of living, and crime” (Jayasankaran 2013).

Johor also has economic aspirations. Iskandar Malaysia was established on 30 July 2006 as an economic development zone in the state with longer term plans for it to be a hub for finance and business, medicine and education, as well as a site for luxury private housing, and electronic and industrial facilities. In total, Iskandar Malaysia covers an area of over 2,000 square kilometres. Some eight years after its establishment, Iskandar Malaysia has attracted a total of S$51 billion in investments (Channel NewsAsia 2014). According to official Malaysian statistics, Singapore is by far the lead investor to date with RM9.1 billion, followed by Spain at RM4.1 billion, and in third place Japan at RM3.7 billion. It has, however, not always been smooth sailing. The Iskandar Regional Development Authority (IRDA) has admitted that it needs to win over the “hearts and minds” of Johor residents, as well as “be more attuned to the needs of local residents” and to “counter the perception that Iskandar Malaysia only served the interests of foreign investors” (New Straits Times 2009). More recently, IRDA has had to refute claims that the inflow of foreign investments into Iskandar Malaysia has “marginalized Malays in Johor” (Teo 2013).