April 5, 2023

Retail giant Mustafa, which runs the well-known budget mall Mustafa Centre in Singapore, has recently announced plans to set up shop in Johor Bahru, Malaysia. In ‘Commentary: When shopping giant Mustafa meets retail paradise Johor Bahru’ (Channel NewsAsia, March 2023), Dr Serina Rahman (NUS Southeast Asian Studies and ISEAS-Yusof Ishak Institute) contemplates how such an arrival might impact Singaporeans and residents of Johor Bahru differently.

Dr Rahman notes that Singaporeans are happy to go to Malaysia to shop, particularly since they can shop at lower prices than in Singapore. This is because the Singapore dollar is currently about three times stronger than the Malaysian ringgit. She draws upon Malaysia’s tourism data to show that Singapore is the country from which the majority of arrivals to Malaysia hail by a large margin. On this note, she predicts that the opening of Mustafa in Johor Bahru would attract more Singaporean shoppers to Johor Bahru.

However, the opening of the mall might not translate to immediate benefits for Malaysians. Dr Rahman points out that the spending power of Malaysians is falling, especially with the recent general inflation, particularly in the rise in food prices. In this light, she argues that the arrival of a budget shopping centre like Mustafa might not attract many locals as the time and monetary costs to travel there to shop could be too high.

Nonetheless, the arrivals of malls and foreign investments like Mustafa may stimulate Malaysia’s economy, which saw its growth stagnate during the COVID-19 pandemic. Attracting investments and shoppers is a policy objective of the Malaysian government as well.

Dr Rahman warns that the benefits of these arrivals must trickle down to the locals. If this fails, the envy and enmity of Malaysians towards Singapore would only deepen.

Read the commentary here: https://www.channelnewsasia.com/commentary/mustafa-centre-jb-shopping-malaysia-economy-3375021