Fri, 27 Aug 2010


Indonesia is the sleeping giant of South East Asia. With a population of 288 million, a land mass the size of Mexico and territorial waters that could fill half of China, it’s an immense country and a regional power within the geopolitical organization known as ASEAN (the Association of South East Asian Nations). Indonesia takes up almost half the area occupied by the ASEAN countries and accounts for one third of its GDP.

But Indonesia is a developing country, plagued by various socio-economic problems ranging from unemployment, vast income inequality, tens of millions living under the poverty line and a lack of development in rural outer lying islands in the archipelago of thousands.

On the other hand, Indonesia is a strong exporter of coffee, rubber, spices, rice and other agricultural as well as mineral commodities. These are commodities that small countries such as Singapore need due to its lack of natural resources. The Indonesian-Singaporean relations are a strong model of inter-dependence then, and indeed this was highlighted by a recent state visit by President Susilo Bambang Yudhoyono to Singapore where he met with his counterpart, Prime Minister Lee Hsien Loong.

The visit was aimed at establishing cooperation between the two countries on a range of issues and the Singaporean prime minister told Indonesian news media and Singaporean reporters during the trip that sound agreements had been reached on a number of issues.

Six working groups were set up by the two countries to expand cooperation in a number of fields including tourism, investment, trade cooperation and labour issues. On a side note, the Prime Minister added that a seventh working group would also be established to explore the ways in which regional terrorism could be dealt with, a significant outcome given the insurgency issues currently troubling Indonesia.

Singapore has expressed a strong desire to invest in the Riau Islands, an archipelago of scenic islands numbering around 3,200 and a province of Indonesia that is in need of foreign investment and employment for the sum 1.3 million people living there. The major areas of development for the islands would be cruise tourism and civil aviation, expanding the potential of this overlooked tourist destination and generating local income.

At the same time, Indonesia is looking to expand exports to Singapore, already the fifth largest trading partner of the country, accounting for over 8% of foreign trade.

The two countries have also agreed to act as dialogue partners on the sidelines of the Apec summit in Indonesia in 2013, at which the two countries will together establish talks with Russia and the United States on greater regional integration with the two western powers.

On all fronts then the two countries are developing increasingly consolidated relations and inter-dependant links with one another in all areas, creating a sound foundation for economic growth.