MENTERI Besar Datuk Abdul Ghani Othman yesterday expressed confidence that Iskandar Malaysia would play a pivotal role in insulating Johor from a potential economic recession triggered by the soaring prices of fuel.

He said foreign and local investments, which were pouring into the southern development corridor, would help the state in maintaining a healthy economic growth despite gloomy forecasts of an impending global recession.

"The soaring prices of fuel posed a huge challenge as it could cause the increase of prices in everything and at the same time, stagnate or even shrink our economy," he said in his winding-up speech.

"It is probably the worst case scenario -- low growth combined with increase in prices of goods.

"Nonetheless, we in Johor are fortunate to have Iskandar Malaysia.
"If everything goes well, it will provide us with the economic impetus to draw investors, thus maintaining or even improving the state's growth."

Abdul Ghani said the state government welcomed the announcement by Prime Minister Datuk Seri Abdullah Ahmad Badawi yesterday, that an additional RM2 billion would be allocated to each regional development corridor, including Iskandar Malaysia.

He said the state government would do its best to ensure the success of Iskandar Malaysia and among the latest initiatives, was an action plan to construct a "multimodel" transport system.

It is a highly organised integrated public transportation system comprising railway, bus and taxi services.

For short-term measures, Ghani said the state government would give priority to improve bus services in Johor Baru and the rest of the areas designated under the development corridor.

Explaining in great length the global effect of the fuel price hike, Ghani said Malaysians must accept the fact that they had no choice but to adapt to the changes caused by the price increase.

He said Malaysians should be thankful for the recent restructuring of the fuel subsidy and not blame the government or Petronas for the soaring price at the pumps.

"Some may argue that we, as a petroleum producing nation, should not be affected too much by rising fuel prices.

"But they do not know that our domestic petroleum reserves stand at only 5.4 billion barrels.

"It will run out if no new oil fields are discovered within the next five or seven years.

"In contrast, reserves for Saudi Arabia stands at 264 billion barrels, while those for Iran, Iraq and the United Arab Emirates are over 100 billion."

Ghani said the fact that the government was still giving fuel subsidies showed how much it cared for the people's well being.