Discrepencies in RI-Singapore trade figures seen as result of smuggling

Adianto P. Simamora, The Jakarta Post, Jakarta

The reported wide disparities in the data recorded by the Singaporean and Indonesian governments on bilateral trade between the two countries would appear to provide further evidence of rampant smuggling between the two countries, as well as graft in the Indonesian customs service.

According to some economists, Singapore now needs to fully reveal the data to help Indonesia crack down on the smugglers, who have greatly hurt the country's economy.

"This is very important. The Singaporean government must be ready to openly explain to the Indonesian government about the trade figures so we can find out what the problems are," Chatib, of the Institute for Economics and Social Research at the University of Indonesia's School of Economics, told The Jakarta Post on Thursday.

"Based on the Singaporean data, the Indonesian government will be able to ascertain if the differences in the trade figures are caused by smuggling or under-invoicing," he said.

Minister of Industry and Trade Rini MS. Soewandi and Minister of Foreign Affairs Hassan Wirajuda voiced complaints during a press conference on Tuesday about Singapore's reluctance to unveil its data on trade between the two countries.

Hassan said the Indonesian government had often asked Singapore to supply of with detailed trade statistics since 1973, but Singapore had always turned down the request.

Indonesia is not even included on the list of 149 trade partners in the Singapore Trade Statistics.

Singapore once sent a diplomatic note on the bilateral trade data, but the note was categorized as confidential and the city state refused to discuss the matter in any formal forum.

According to the data contained in this note, Indonesia is the sixth largest trading partner of Singapore, after Hong Kong, China, Japan, the United States and Malaysia.

The data also says that in 2002 Singapore recorded non-oil exports to Indonesia amounting to US$5.25 billion, compared to $2.44 billion as reported by Indonesia's Central Statistics Agency (BPS). Singapore puts its non-oil imports from Indonesia at $7.41 billion, compared to $4.6 billion according to BPS data.

"The discrepancy is too high. There must be something going on. If the Singapore data is correct, then Indonesia has suffered big losses in import duties," said Sri Adiningsih of Gadjah Mada University.

The two countries have enjoyed good bilateral trade relations for a long time now, and are both member of ASEAN, which is currently in the process of implementing the ASEAN Free Trade Area (AFTA) agreement.

In 2002, Singapore was one of Indonesia's largest foreign investors, contributing US$3.3 billion worth of investment.

Singapore has also included high technology products from both Bintan and Batam islands in its free trade pact with the United States.

Under the deal, Singapore will be allowed to export high- technology products assembled on Bintan and Batam to the U.S. duty free.

Director General of Customs and Excise Eddy Abdurrachman admitted that he "finds it difficult" to obtain data from the Singapore customs service.

Hassan said officials of both countries recently met to discuss the issue, but Singapore demanded that the meeting be an informal one, and no agreement was reached.

He said that government representatives expected to meet with the Singaporean government again in August of this year.

Rini warned that Indonesia could take several reprisal measures if Singapore were to insist on keeping the trade figures secret, including urging all ships carrying Indonesian goods to stop over at Malaysia's Klang Port, which is the main competitor to the port of Singapore.

Analysts said the Singaporean government was intentionally keeping the trade figures under wraps to protect certain vested interest groups that have continued to do a lot of contraband trade with the country, including Indonesian military figures. Some even said that the administration of former President Soeharto had actually asked the Singaporean government not to publish the data.

Local manufacturers have long complained that smuggled goods are threatening their products on the domestic market.

They claim that smuggling and under-invoicing practices are made possible by collusion involving corrupt customs officials.