Jakarta 'unhappy' with its ties with Singapore
Jakarta 'unhappy' with its ties with Singapore
SINGAPORE (Reuters): An Indonesian minister has been quoted as saying the new government in Jakarta is unhappy with the state of its relations with Singapore.
"Ties are not moving in the right direction," State Minister for the Empowerment of State Enterprises Tanri Abeng was quoted by Singapore's Business Times newspaper yesterday as saying in an interview.
He cited a lack of action on Singapore's promise to make US$5 billion available to guarantee Indonesian trade through Singapore as a prime example of what was wrong.
"A specific example is the initial pledge for assistance in trade financing. Because if the relationship is at its best that would have been resolved," he said.
Indonesian companies have found it ever more difficult to obtain letters of credit to oil the wheels of trade as their country has sunk ever deeper into crisis.
When it announced the aid earlier this year, Singapore said it wanted other countries to join the guarantee scheme, but no others have come forward.
Singapore's deputy prime minister Lee Hsien Loong told parliament earlier this month that Indonesia wanted more time to study the guarantee scheme and Singapore was awaiting word from Jakarta on when talks would resume.
Singapore should also be boosting market confidence in Indonesia, Tanri said.
"Singapore can help restore market confidence by giving a positive assessment of Jakarta's post-Soeharto government and its policies where this was appropriate," he said.
The Business Times quoted Indonesian sources as saying Indonesian President B.J. Habibie had been upset by comments from Singapore Senior Minister Lee Kuan Yew in February.
Lee, known for his bluntness, did not mention Habibie by name, but said financial markets were unlikely to react well to the outcome of Indonesian presidential and vice presidential elections in March. Habibie was elected vice president.
The markets had already reacted badly to Habibie's nomination, regarding him as a high-spending minister of technology who favored grandiose projects and harbored thoroughly unconventional economic ideas.
The Indonesian sources were quoted as saying Singapore was seen as hesitant in welcoming Habibie's accession to power when Soeharto stepped down after 32 years of autocratic rule in May in the face of mounting street protests against him.
They also noted that while Habibie has talked about visits to the United States, Japan and Malaysia, he had not mentioned Singapore despite a modern Southeast Asian tradition of new leaders visiting neighbors first.