S’pore ‘doing its best’ to help Jakarta

Indonesian minister recognises Republic’s efforts but calls for joint task force to improve trade links

SINGAPORE is doing its best to lift Indonesia out of its worst economic crisis in three decades by helping to restore confidence in its economy, an Indonesian Cabinet minister has said.

Minister for State Enterprises, Mr Tanri Abeng, said Economic and Development Board (EDB) chairman Philip Yeo, in particular, was trying hard to encourage Singaporean and foreign businessmen to invest in Indonesia. “I have spoken to him and there is definitely an attempt by Singapore to help strengthen market confidence in our economy,” he told The Straits Times on Tuesday, on the sidelines of a Golkar party meeting in this North Sumatran capital.

His comments came in the wake of Mr Yeo’s visit to Indonesia on Tuesday and his announcement that the US$8-billion (S$13.8-billion) gas sales agreement signed with the Republic in July would attract investments and create many jobs for Indonesians.

Mr Yeo said that one of eight international consortiums would soon be awarded the contract to build the 640-km pipeline linking the West Natuna Sea gas field to the Republic. This would set up partnerships with Indonesian companies.

Mr Tanri’s comments signalled a warming of ties between the two neighbours. In a previous interview in June with The Business Times, he was reported to have said that the bilateral ties “have not been moving in the right direction”, of late.

Yesterday, he told The Straits Times that he had made the comment because at that time, he thought Singapore was not responding enough to Indonesia’s dire economic situation.

He said: “Since then, though, there has been a definite effort by Singapore to help Indonesia and improve the economic relationship between the two countries.” He pointed to EDB chairman Yeo’s attempt to encourage outsiders to invest in Indonesia as a good move, commercially and politically. “Such efforts are an indication that both countries are moving in the right direction,” he said.

But while he was positive about Singapore’s latest initiatives, he maintained that more could be done.

He said a special task force, comprising private and public sector members from both countries, should be set up to study ways of bolstering trade links. This task force could discuss investment opportunities, the bilateral trade finance scheme, and even look into implementing agreements like the 1991 water pact.

He said: “We really need to sit down and see what we can do together. We also need to identify and resolve our problems in a concrete way rather than just keep guessing what these problems are most of the time.”

On the still unresolved bilateral trade finance scheme offered by Singapore, he said Jakarta felt implementation of the proposed scheme was moving at a much slower pace than expected and “can be accelerated”.

“Business always carries risks,” he noted. “As long as there are risks involved, Singapore will take time to make a decision. They will think through their options carefully.”

Prime Minister Goh Chok Tong had said in his recent National Day Rally speech that Singapore was taking advice from the World Bank, the export-import banks of big exporting countries and other international institutions on how to improve the agreement. The Republic came up with a set of proposals in April, but the Indonesians thought the scheme had too many safeguards.

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