Three decades ago, the governments of Singapore, Malaysia, and Indonesia reached an agreement to collaboratively promote the city-state, the state of Johor in Malaysia, and the province of Riau in Indonesia.
Often referred to as the SIJORI Growth Triangle, this initiative aimed to leverage the geographical proximity, diverse resource endowments, and robust logistics networks of these regions to offer investors a comprehensive opportunity.
The Genesis of SIJORI
The concept was initially proposed by then First Deputy Prime Minister Goh Chok Tong of Singapore in December 1989, who envisioned a “Triangle of Growth” encompassing the city-state, Johor to the north, and Batam Island in Riau Province to the south.
The aim of the Growth Triangle was to enhance regional economic ties and maximize the synergy between the three neighboring areas. The agreement merged Singapore’s managerial skills, capital, technology, and infrastructure with the ample labor, land, and natural resources of Johor state and Riau province, its adjacent neighbors.
As additional states from Malaysia and Indonesia became part of the coalition, SIJORI underwent a name change to become the Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT).
The coalition was solidified through the signing of a memorandum of understanding (MOU) on December 17, 1994, by representatives from the involved nations: Deputy Prime Minister Lee Hsien Loong of Singapore, Minister for International Trade and Industry Rafidah Aziz of Malaysia, and Coordinating Minister for Trade and Industry Hartono of Indonesia.
While specifically serving the participating nations, the Growth Triangle was perceived to yield advantages for the entire ASEAN region, with no intention to hinder those nations from engaging in other economic collaborations. Regarded as a means to expedite ASEAN’s goal of achieving free trade by 2003, the Growth Triangle was seen as a contributing factor (Chan, 1994).
The genesis of the SIJORI Growth Triangle coincided with the rise of the data center industry in the late 20th century. As digital demands escalated, Singapore, Johor, and Batam saw an opportunity to collaborate. Singapore’s financial prowess, combined with the land resources of Johor and Batam, made for an ideal partnership.
The initiative aimed to capitalize on emerging technological trends, particularly in data services, by creating a conducive environment for investment and development. Thus, the SIJORI Growth Triangle became a symbol of regional cooperation and strategic foresight in harnessing the potential of the digital economy.
Fast forward to today, the first quarter of 2024 has seen significant strides in the data center markets across Singapore, Johor, and Riau regions. These developments underscore a collective commitment towards sustainability, innovation, and expansion to meet growing demands in the Asia Pacific region.
SINGAPORE: A Hub of Innovation and Opportunity
The data center market in Singapore continues to witness significant developments, with sustainability taking center stage among recent initiatives.
Empyrion DC secured a S$133 million green term loan with UOB to enhance sustainability efforts at its SG1 Dodid Data Centre, which includes features like green walls and energy-efficient technologies. ClickUp is expanding in the APAC region, establishing a new data center in Singapore to meet increasing demand while prioritizing data safety. Atlantic.Net has launched a new cloud region in Singapore, aligning with the government’s investments in cloud computing.
Singapore has solidified its position as a global player in the data center market. Its advanced infrastructure and business-friendly environment make it a magnet for tech giants and startups alike. With cutting-edge facilities and a strategic location, Singapore has become the heartbeat of digital innovation in the region.
JOHOR: A Rising Star in the Digital Landscape
Meanwhile, the data center market in Johor is witnessing pioneering efforts towards green power adoption, with notable developments driving sustainability in the region.
GDS secured a renewable energy Virtual Power Purchase Agreement (VPPA) to achieve net-zero carbon emissions by 2030. AirTrunk partnered with ib vogt for Malaysia’s first-ever Data Center Renewable Energy VPPA, contributing to sustainability efforts with a solar farm project.
Moreover, Telekom Malaysia Bhd is considering establishing a new hyperscale data center, indicating the region’s growing prominence in the data center market. Yondr Group also announced the successful energization of its inaugural campus, located at Sedenak Tech Park.
Johor has emerged as a promising contender in the data center arena. Its vast expanse of land and favorable conditions make it an ideal location for businesses looking to establish a foothold in the region. With seamless connectivity to Singapore, Johor offers a gateway to new opportunities and collaborations across borders.
RIAU: Where Opportunity Meets Affordability
Not to be outdone, across the strait of Riau Islands, the data center market is poised for growth, with strategic alliances and infrastructural developments aimed at fortifying Southeast Asia’s digital ecosystem.
BW Digital and Citramas Group signed an MoU to develop a carrier-neutral digital ecosystem within Nongsa Digital Park in Batam, the largest city in Riau Islands, aiming to facilitate connectivity, innovation, and economic growth in Southeast Asia amid rapid digitalization.
Additionally, NeutraDC Nxera Batam, a joint venture between Singtel, Telkom Indonesia, and Medco Power, recently held a piling ceremony marking the official start of construction for a cutting-edge data center.
In an interview with W.Media, NeutraDC CEO Andreuw Th.A.F. highlighted Batam’s potential for cloud service providers (CSPs) and over-the-top (OTT) companies looking to enter the Indonesian market. This Special Economic Zone, located near Singapore, offers tax incentives and data residency compliance, making it a financially and legally attractive location.
The Riau Islands have quietly transformed into a thriving hub for data centers. Its proximity to Singapore, coupled with abundant land and energy resources, makes it an attractive destination for investors seeking cost-effective solutions without compromising on quality. The island buzzes with activity as businesses tap into its potential for growth and expansion.
Embracing the Digital Frontier: The Future of SIJORI
As we approach the brink of a digital revolution, the fate of SIJORI teeters on the edge. Recognizing the critical need to remain ahead of the curve, Singapore and Malaysia have entered into several agreements aimed at promoting cross-border collaboration and innovation.
A recent example is the signing of a memorandum of understanding (MOU) between the governments of Malaysia and Singapore, outlining plans for the joint development of a special economic zone (SEZ) in Johor, a southern state in Malaysia.
This kind of collaboration is vital for the future of the SIJORI region. By pooling resources and expertise, Singapore and Malaysia can create an environment that fosters technological progress, economic development, and improved connectivity. The establishment of the SEZ in Johor reflects their commitment to leveraging each other’s strengths and generating mutual benefits.
Looking forward, continued collaboration between Singapore, Johor, and Riau holds immense promise. By capitalizing on their unique assets and working together, these entities can drive innovation, attract investment, and position the SIJORI region as a dynamic hub for digital commerce and technology.
Through ongoing cooperation and strategic partnerships, SIJORI can navigate the challenges of the digital age and emerge as a thriving player on the global stage, ensuring prosperity for its residents and businesses alike.
Why We’re Rallying Around SIJORI: A Call to Action
The emergence of the SIJORI Growth Triangle laid the foundation for increased economic integration and collaboration among Singapore, Johor, and Riau. This cooperation fostered a spirit of synergy, leveraging each other’s strengths to drive economic growth.
The collaborative efforts attracted significant investment interest from various sectors, including digital infrastructure. As the SIJORI Growth Triangle gained momentum, it became evident that digital infrastructure was a crucial component for sustaining and enhancing economic growth.
The regions recognized the importance of developing robust digital infrastructure to support their burgeoning economies. With the establishment of SIJORI as a prominent economic region, it garnered attention from investors and stakeholders worldwide.
This international interest led to events like SIJORI Week, conceived to further showcase the potential of the region, particularly in the realm of digital infrastructure. SIJORI Week serves as a platform for stakeholders to exchange insights, foster partnerships, and explore investment opportunities within the SIJORI ecosystem.
In essence, the bold vision and collaborative efforts behind the SIJORI Growth Triangle paved the way for events like SIJORI Week, which play a crucial role in promoting and advancing the digital infrastructure landscape in Southeast Asia.
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This story first appeared in our Special SIJORI issue of the Cloud and Datacenter magazine, and is being republished on the website in the run-up to SIJORI Week.
