Regulatory and land use planning framework of the special border economic zone (SBEZ) in Malaysia : A case study of SBEZ Bukit Kayu Hitam

Economic growth and technological advancement in developing countries rely on Foreign Direct Investment (FDI). Special Economic Zones (SEZs) are established to attract investment by offering attractive benefits. Malaysia entered the SEZ arena in 1980s with the creation of a Free Zone in Penang. In 2018, Malaysia proposed the establishment of the Special Border Economic Zone (SBEZ) in Bukit Kayu Hitam. However, its implementation has faced several challenges, particularly the absence of a specialised land use planning law. Inadequate legal provisions could hinder the SBEZs smooth development. This study addresses these issues by examining land use planning laws. The study uses doctrinal legal research combined with a case study approach. It analyses legal documents, qualitative interviews with relevant stakeholders, and primary and secondary data sources. Additionally, the research adopts a socio-legal research by examining the relationship between land use planning laws and their practical implementation. A pivotal part of the study involves identifying issues within the SBEZ and comparing them to similar SEZs in Malaysia (such as Johor and Penang) and internationally (notably in the United Kingdom and Singapore). This comparative analysis aims to derive insights and propose solutions for the challenges faced by SBEZ. The study highlights significant legal challenges and underscores the urgency of reforms, particularly in enforcing development plans, planning controls, and land administration procedures. It advocates for a dedicated land use planning legal framework tailored to SBEZs. The findings suggest that the success of Bukit Kayu Hitam’s SBEZ depends on legal refinement and comprehensive land use planning, similar to the Local Development Order in the UK, alongside stronger public-private partnerships. The study calls for a bespoke legal framework that aligns land use planning with economic objectives, serving as a vital reference for policymakers. The proposed legal reforms are expected to enhance SBEZ governance, strengthen Malaysia’s role in global SEZ development, and support economic growth in northern peninsular Malaysia, as emphasised in the Malaysia Plans and national development blueprints