Pakatan Harapan's challenging job ahead in Johor, after its surprise win

Pakatan Harapan's challenging job ahead in Johor, after its surprise win

Perhaps more than elsewhere in Malaysia, Johor must grapple with the cost of living and inequality. And the new government may be on a short leash in the state where UMNO was born.

A view of the causeway bordering Malaysia's southern state of Johor Bahru
A view of the causeway bordering Malaysia's southern state of Johor Bahru. (Photo: AFP)

JOHOR: As voters were walking up to the ballot boxes on May 9, the winds of change could be heard in this United Malays National Organisation stronghold. In low voices, they were saying: “Just this time, go the other way. Change.”

Leading up to Polling Day, there were already whispers that “I think that person has gone to the other side”.

These are some of the stories Iseas-Yusof Ishak Institute visiting fellow Serina Abdul Rahman has been hearing from Johor residents.

“They were basically saying, ‘We did what we had to do. We gave out the Barisan Nasional T-shirts, we put up the flags, but when it came to the ballot box, we ticked the other (party),’” she said.

Johor BN flag
Barisan Nasional lost its stronghold Johor in 2018 general elections. It had governed the state since independence. (Photo: Howard Law) 

She may have got it wrong in thinking that the birthplace of the UMNO would not fall to Pakatan Harapan, but as people also told her, they can bring the fallen giant back if things do not improve.

That puts into context the new government’s challenges going forward in Peninsular Malaysia’s southernmost state, which Channel NewsAsia explores in the special documentary Johor – A New State of Affairs.

Already, Johoreans no longer need to worry about ex-Prime Minister Najib Razak being in charge – one of the clearest reasons that they switched sides.

Malaysiakini reporter Lu Wei Hoong, who covered the elections in Johor, said: “They still support Barisan and think UMNO is good. But the thing is, they hated BN chairperson Najib Razak.

They were not voting against UMNO; they voted against the leader.

One fisherman, for example, told him that there was no need to change the government, except that “the leader was a big problem”.

Ousted Malaysian Prime Minister Najib Razak speaks during a news conference in Kuala Lumpur
Ousted Malaysian Prime Minister Najib Razak at a news conference in Kuala Lumpur, May 12, 2018. REUTERS/Stringer

Many of the problems attributed to Mr Najib and the federal government, however, are still there. So having won against the odds, Pakatan Harapan now faces the task of addressing the everyday issues in Johor.

SPIRALLING INFLATION

While the rising cost of living is a nationwide problem, Johor’s inflation rate “is right at the top”, noted Ms Khor Yu Leng, the South-East Asia research director at Segi Enam Advisors. “And it’s getting more expensive faster.”

Many Johoreans are struggling to cope with expenses from food to housing to healthcare.

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Children at a playground in the Desa Melayu government public housing estate in Johor Bahru (Photo: Justin Ong)

Teacher Mohd Noh Awi, for example, is earning above the national average of RM2,880 (S$970) for employees last year, but his monthly salary of about RM4,000 is hardly enough for his family.

“I’d spend RM2,000 first and try to save the rest. But sometimes I have to use the remainder because I’m the sole breadwinner,” he said. “Over these past two years, I used it all on daily expenses.”

His family in Pagoh were BN supporters for decades but voted for change this time, “for a better life”.

Pakatan Harapan, which vowed to tackle these pocketbook issues, has just taken the first step: On June 1, the Goods and Services Tax was reset to zero per cent, a move that cheered most Johoreans.

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Earlier protests against the GST. (File photo)

But the Sales and Services Tax, which will replace the GST in September, has some business owners worried. And while the GST may have been the tipping point, Johoreans have been facing financial woes for years.

Senior service engineer Charles Tiong reckons that his monthly expenses in Johor Bahru have risen by 20 to 25 per cent in recent years because of the removal of subsidies, such as for cooking oil, flour, sugar, petrol and diesel.

On this front, Pakatan Harapan announced plans before the polls to reintroduce fuel subsidies for targeted groups. And in Johor, its manifesto promised the bottom 40 per cent of households free water for the first 10 cubic metres each month.

Admitting that this was “controversial”, Democratic Action Party Member of Parliament Yeo Bee Yin said nonetheless: “A lot of people said … you’ll waste water if you give free water. Actually, it’s not true.

You'll still use the same because … people want to keep (it free).

She would like to see limits on privatisation in the water industry in future. “We shouldn’t privatise unfairly,” added the 34-year-old MP for Bakri. “Profit should be nationalised, and not privatised. So we need to get the balance.”

Other state-level welfare initiatives to be rolled out include a medical card that will provide eligible Johoreans with RM500 worth of treatment a year, as well as help with further studies, among other things.

JOBS AND WAGES

Another key issue the new government plans to address is jobs and wages. Many Johoreans claim that incomes have stagnated.

While figures from Malaysia’s Department of Statistics show that Johor’s urban household incomes have risen in line with inflation, the problem is in the rural sector, noted Ms Khor.

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A villager walking in Kampong Melayu, Johor Bahru (Photo: Justin Ong)

“That's reflective of the fact that oil palm is a big income earner for the rural sector. And basically that price has been quite stable – kind of flattish, if not actually trending down in the last two years,” she said.

Besides Pakatan Harapan’s plans to standardise and increase the minimum wage of RM1,000 ringgit in Peninsular Malaysia, some of the MPs want to do more to transform their constituencies.

Take, for example, Malaysian United Indigenous Party (PPBM) MP Syed Saddiq Syed Abdul Rahman, who wants Muar to be Johor’s “northern economic hub”.

“At the moment, it’s labelled as ‘Bandar Pencen’ or a city of retirees, and I want to change that. I think it should be a city of young people and retirees merged together,” said the 25-year-old PPBM youth chief.

Syed Saddiq with members of ARMADA, youth wing of PPBM
Syed Saddiq Syed Abdul Rahman (centre) with members of PPBM's youth wing. (Photo: Courtesy of Syed Saddiq)

Ms Yeo, who was previously an MP in Selangor and returned to contest in her home state, thinks its economy must be restructured, “so that it doesn’t rely so much on cheap labour but moves us up the value chain”.

Her Pakatan colleague Akmal Nasrullah Mohd Nasir agreed. “We need to improve or equip our people with more skills so that we can … be competitive at the national or international level,” said the 32-year-old MP for Johor Bahru.

Some of these plans will depend not only on local or state efforts, but also on the government attracting enough foreign investments, and the right kind too.

PROPERTY PROBLEMS

Johor is among Malaysia’s top investment destinations and key economic pillars, contributing 9.5 per cent of the national gross domestic product last year and growing 6.2 per cent, higher than the national average.

The state had RM21.9 billion of investments approved last year, but “when you look at the types of those investments, they don't create (enough) jobs”, said Ms Yeo.

One example is the US$100-billion (S$134-billion) Forest City in the south of Johor. It is being developed by Country Garden, a Chinese developer.

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A model of Forest City at the developer's Johor office.

“It’s an investment for consumption. Then the question is, who’s consuming and where are these people from?” said Iseas-Yusof Ishak Institute senior fellow Francis Hutchinson, the coordinator of its Malaysia Studies Programme.

“If you look at the marketing material, the campaign as well as the pricing of the real estate there, it’s clearly not targeted at Johoreans … Related to that is the question: How many jobs in the construction process are generated for locals?”

He added that Johor is facing a “real crunch”, as its middle class “can’t find affordable housing”.

Mr Ibrahim Suffian, the co-founder of opinion research firm Merdeka Centre, agreed. “Many people are looking for houses anywhere between RM200,000 and RM400,000, but most of the homes being built were RM500,000 and above,” he said.

This created pressure on people who are trying to find a place to live while also working in that state.

Minimum property purchase prices of RM500,000 to RM2 million for foreign buyers in Johor, imposed in 2014, have not deterred this group. Chinese investors are among those drawn to properties in the Iskandar region in particular.

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Construction at Medini Iskandar urban township. The area currently boasts service apartments, hotels, Gleneagles Medini hospital and Legoland. (Photo: Howard Law) 

Property negotiator Howard Lee said: “Initially, Chinese buyers were more inclined to buy Chinese developments here. But after a while, many Chinese buyers started paying attention to the local projects, even resale properties.

“Some will send their kids here to study and look for opportunities to develop their own careers here.

Now that Pakatan Harapan is in power, foreign investments in Johor’s property sector may be reviewed.

While Mr Syed Saddiq said the government “can’t take a xenophobic stance by saying that all the projects from China are wrong”, there would be consequences if the houses are “immensely unaffordable” and the “vast majority” of buyers are foreigners.

INDUSTRIAL INVESTMENTS

Apart from property development, investment in industrial output is also important to Johor. The Iskandar region, three times the size of Singapore, is a potential engine for growth and important hub for the Malaysian state.

It has nine industry clusters, such as tourism, healthcare and education, but experts think the key is to prioritise the types of investments, in Iskandar and elsewhere in Johor.

Scale model of the Iskandar region. File photo: TODAY

“What I think Johor should do, and do more … is to look at its manufacturing sector because of its proximity to Singapore and not just Singaporean firms, but also multinationals based in Singapore,” said Dr Hutchinson.

But not every foreign firm is all that attractive to locals. Singapore-based Wanin Industries, for example, finds it challenging to hire locals at its mineral water plant in Johor. Half of its workers are Malaysians and half are foreigners.

The company’s export manager Eugene Tan attributes this to the factory’s location outside the central district, “closer towards the village area”.

Ms Khor sees two sides to the jobs question. “The argument from the industry is that these are the dirty, dangerous jobs, which locals don't want,” she said.

But then, we have civil societies and non-governmental organisations arguing that you're just not paying enough.

Mr Syed Saddiq said that if a worker from the sub-continent is earning about RM1,200 and competing with a Malaysian earning about RM1,500 to RM2,000, this would cause a “suppression of wages”.

“We don’t want be xenophobic, but we want to strike a balance. When eight out of 10 jobs created goes to them (foreigners), that signals a very big imbalance, which we need to resolve,” he said.

Tackling the issue of foreign investment and foreign workers will be a balancing act for Johor’s new government, as curbs on foreign workers would also be problematic.

Johor Bahru
Johor Bahru. (File photo: AFP/Roslan Rahman)

Sungreen Mould Industries general manager Chan Beng Kiong said: “Previously there were certain times the government stopped the country from bringing in foreign workers.

“It affects businesses when you have orders, but you don’t have workers to do the job. We hope they’ll look into that and at least give us a constant supply of workers according to the market demand.”

But for now, there is uncertainty. “We understand that there’ll be quite a bit of policy changes,” said Wanin’s Mr Tan.

“We’ve held back on some of our plans to first understand better what direction the government would take before we proceed with our next step.”

NEW BRAND OF POLITICS?

Beyond economic issues, Pakatan Harapan will have other challenges too. After six decades, political change might not come easily. Professor Edmund Terence Gomez at the University of Malaya's Faculty of Economics and Administration said:

While we’ve had regime change, I’d argue that we also had initial political continuity.

“If you look at some of the parties in the coalition, they’re spin-offs from UMNO.”

Johor Chief Minister Osman Sapian, for example, was formerly from UMNO and was accused of resorting to his old party’s tactics when he suggested withholding funds to BN-held districts.

Following calls on social media for a new brand of politics, which MPs like Mr Syed Saddiq agreed with, the Chief Minister announced that all representatives in Johor will receive equal allocations.

Johor Osman Sapian
Johor state Chief Minister Osman Sapian. (File photo: Howard Law)

Prof Gomez predicted: “If the people from UMNO who are now part of the ruling government, including at state level, try to rule in a manner reminiscent of the UMNO form of government, there’ll be disciplining of these parties or these politicians by other members of the coalition.”

Finding consensus in a new political reality will be a challenge for Johor's new government, admits Ms Yeo. But she hopes people will get used to that, especially if decisions take longer.

“The problem with democracy or a coalition is that it’s noisy. And some people don't like politicians quarrelling. But what you get from the coalition is that there’s more space for people to speak up,” she said.

Relations with Singapore will also come under attention, as political manoeuvres at the federal level will have an impact on Johor as Singapore’s closest neighbour.

osman sapian with singapore's consul general
Johor chief minister Osman Sapian meets Singapore’s Consul-General in Johor Bahru Rajpal Singh at the Johor state government offices in Kota Iskandar on May 28, 2018. (Photo: Howard Law)

Prof Gomez said: It’s a mutually beneficial relationship here. It’s just that we’ve to make sure the terms are equitable to both Johor as well as Singapore.

“The terms under which Singaporeans invest in Johor must also favour Johoreans. It must favour the Johor state economy and national economy.”

All of Pakatan Harapan’s moves will be watched by the people of Johor, who have high expectations.

Restaurant owner Jofri Naiman, who loved BN "for a long time" until recently, said: “The new government will perform better than the previous government. I hope so because now we have a prime minister who has a lot of experience.”

With UMNO members sure to try winning back the state at the next elections, Mr Akmal said: “It’ll keep us alert, to make sure we don’t drop the ball or commit any mistake.”

His colleague Mr Syed Saddiq agreed. “I’m very sure that we as a coalition will move forward because we know that if we don’t, the people who once stood beside us will be the very same wave to wipe us out,” he said.

“If the people can take down a government that has ruled for more than 61 years, it won’t take much for them to take (us) down.”

Look out for Channel NewsAsia's series of stories this week on Johor under Pakatan Harapan. Also published today: Johor rethinks efforts to trump Singapore at tourism.

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Pakatan Harapan flags hang above Barisan Nasional ones on a street in Johor Bahru, a day after the incumbent lost control of the state for the first time. (Photo: Justin Ong)

Source: CNA/dp

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