Indonesia seeks Singapore's help to curb smuggling

Adianto P. Simamora, The Jakarta Post, Jakarta

Minister of Industry and Trade Rini Soewandi has asked Singapore for its cooperation, including joint border patrols, in curbing the widespread smuggling into the country.

In a letter dated June 16 to Singaporean Minister for International Trade and Industry George Yeo, Rini said that the smuggling of goods into Indonesia had already reached a critical level with respect to national economic development.

Rini also proposed to strengthen cooperation through direct customs links via an electronic data exchange system.

"This, in turn, will assist not only the government and the business community in focusing on the development of trade, but will also help strengthen the close relationship between Indonesia and Singapore in combating smuggling -- and therefore, combating terrorism," Rini said as quoted by AFP.

It is not known if the Singaporean government has responded to Rini's letter.

Rini also took issue with Singapore's presentation of trade statistics between the neighboring countries.

On June 10, Rini and Minister of Foreign Affairs Hassan Wirayuda voiced complaints about Singapore's reluctance to reveal comprehensive data on bilateral trade between the two countries.

The complaint was due to a wide discrepancy in trade data between those recorded by the Singapore Trade Statistics and Indonesia's Central Statistics Agency (BPS).

In the 2002 trade data for example, Singapore recorded non-oil exports to Indonesia as amounting to US$2.25 billion, compared to the $2.44 billion reported by BPS.

Singapore also recorded non-oil imports from Indonesia at $7.41 billion, against the $4.6 billion recorded in BPS data.

The disparity of the figures led to suggestions that they were due to rampant smuggling activities between the two countries.

William Tan, first secretary at the Singaporean Embassy here, however, strongly denied the complaint, saying the discrepancy was caused by a different basis of calculation and that it had nothing to do with smuggling activities.

Tan also denied an allegation by Hassan that Singapore had refused to submit the trade data since 1973.

Local manufacturers have long complained about the massive inflow of smuggled products into the country, threatening the domestic market. The rampant smuggling has also been a discouraging factor for foreign investors wanting to set up manufacturing plants here.

Many claim the smuggling and under-invoicing practices were made possible by collusion with corrupt customs officials.

Singapore and Indonesia have enjoyed good bilateral trade relations for many years. In 2002, Singapore was one of Indonesia's largest foreign investors, contributing $3.3 billion in investments.

Singapore has also included high technology products assembled in Batam and Bintan islands in its free trade pact with the United States, under which the products can enter the U.S. market duty-free.

The Indonesian government however, has banned sand exports from Riau to Singapore since January this year.

The government also warned that the ban of sand exports would remain in place unless the two governments were able to settle border issues.