Saturday April 3, 2010
It’s more than just shopping in Johor
Insight Down South by SEAH CHIANG NEE
Traditionally, Johor has always meant cheaper shopping and chilly crabs for Singaporeans. But these days as Singapore becomes more affluent (it ranks 6th globally on per capita GDP) and embraces the cost structure of a global city, this attitude is changing.
The Malaysian state no longer just represents a few bargains for a small number of people. For a segment of the population, mostly middle and low-wage earners who have fallen behind, the frequent trips to Johor have become a necessary feature to combat high costs.
This trend has become more prevalent in recent years as a result of relentless price spirals and higher unemployment.
Last year, the average household income fell by 2% just as Mercer Consultancy was ranking Singapore as the 10th most expensive of 143 global cities.
Increasingly, Singapore “heartlanders” are making frequent trips to Johor to buy cheaper household goods, groceries, baby products and other family essentials that could cost 50% higher back home.
“We buy only what is necessary for the home and provided if there is savings,” said a taxi-driver, a frequent shopper with his wife. It is a big help to his family budget.
He is one of about 10 million Singaporeans who visited Johor last year, a figure still below the pre-recession records.
Currently Johor, as in past history, is becoming a growing factor affecting the lives of most Singaporeans. The rich go there to play golf, sail their yachts or occasionally shop for bungalows.
Couples go for fertility treatment or stage their marriage dinners and many women opt for skin products or buy contact lenses or have their breasts enhanced.
The Singaporean shopping list ranges from petrol to pharmaceuticals, from dental care to durians, and many sorts in between – seafood, video tapes, massage and so on. They even get their cars repaired or painted, and yes, even for a car wash!
In return, Johor derives the benefits of substantial tourism earnings, job creation and Singaporean investments that help to make it one of Malaysia’s richest states.
In addition to water and cheaper shopping, Singapore also depends on the Johoreans for semi-skilled production workers, especially plumbers, electricians and mechanics.
A friend who runs a furniture business has told me the extent of Singapore’s reliance on Johor skills.
All his furniture-makers are Johoreans. “You can scour the whole Singapore island, and you’ll not likely turn up any skilled furniture- makers,” he said.
The transformation of Singapore in the past two decades has resulted in major changes that now spilling cross frontiers to impact some of its neighbours including Malaysia.
With five million people packed into 740sq km – the world’s second densest population – Singapore is short of many things including hospital healthcare facilities.
Frequently, public hospitals are out of beds. From this month, the Singapore government has begun to allow Singaporeans to use its Medisave funds in selected hospitals and clinics in Malaysia.
For Singaporeans, it can be a big saving on medical bills, while Malaysia’s ambition to become a medical hub gets a boost.
The account can be used by Singaporeans to pay for their own or the family’s hospitalisation, day surgery (one-day surgical operations) and a number of outpatient expenses outside the country.
It represents an ironic change. Until now, hospital treatment had largely been a one-way affair, with Malaysians coming to Singapore, rarely the other way.
Singapore is promoting itself as a medical hub by attracting tens of thousands of foreigners to use its hospitals it says are cheaper than in the West. But it has now moved a full circle.
Due to costs, more Singaporeans are seeking treatment in Malaysia (now making up 10% of its total medical tourists) even as wealthy foreigners are still making their way here. In Malaysia, Singaporeans can cut medical bills by at least 50% even if they can wait in queue.
A heart bypass which costs US$18,000 (RM58,509) in Singapore, for example, costs only US$9,000 (RM29,255) up north. Prices for angioplasty, paediatric cardiology, or specialised services, are about half the cost in the Republic.
The government’s encouragement for its people to seek treatment across the Causeway has been given good publicity in pro-government media.
A recent example of an early user of the Medisave scheme is cab-driver Ali Ahmed, who underwent a laminectomy at the Regency Specialist Hospital in Johor Baru.
His total bill for surgery, meals and a five-day stay in a single deluxe room came to only S$7,050 (RM16,404) (it would have been S$1,000 less if he had not insisted on a Singapore doctor.) In the Republic, it would have cost Ali S$13,500 (RM31,411).
For a long time now, thousands of Singaporeans have enjoyed vast savings when they buy medicine in Johor, an equivalent of the US-Canada situation where drugs cost only a fraction in Canada.
A major discouragement that stands in the way of more Singaporeans taking advantage of a cheaper Johor is a popular perception of unsafe streets. There had been too many reports of mugging, theft and assaults.
With prices remaining far apart between the two places, the trend is for more Singaporean consumers coming to Johor – with the growing momentum to build a faster rail and immigration processing.
Not all Johoreans are overjoyed by the prospects, however. Some are fearful that if large numbers of Singaporeans come armed with ready money, they may push up the cost of living for Johoreans.