In his speech in Johor Baru, DAP secretary-general Lim Guan Eng outlined five challenges facing the newly launched Iskandar Development Region (IDR) in Johor. The challenges are the low investment inflow from Singapore, high crime rates and public safety, lack of emphasis on human capital development, the continuation of New Economic Policy and a differential treatment for local and foreign investors which discriminates against the former.

This article intends to examine his claims and to look at the real synergy which made the Pearl River Delta (PRD) region of Guangdong province the most dynamic region in the People's Republic of China since the start of China's reform initiative in 1979. Prime Minister Abdullah Ahmad Badawi claimed that the IDR was modeled after the PRD. However, the success story of both the special economic zones may differ due to several inherent attributes which are peculiar to the regions.

What was clear is that the PRD was established as a testbed for reform and to serve as a model for other jurisdictions in China. Before 1979, economic development in Guangdong paled in comparison with the eastern coastal development zones. Moreover, Guangdong was chosen as a special economic zone due to its proximity to both Hong Kong and Macau.