S'pore must take steps to clear ties with RI

S'pore must take steps to clear ties with RI

Ardimas Sasdi, Staff Writer, The Jakarta Post,
Berkeley, California, ajambak@calmail.berkeley.edu

Of all the nagging issues hurting ties between Singapore and
its giant but frail neighbor Indonesia, nothing is more
contentious than allegations the city-state took advantage of its
neighbor's corrupt legal system and rampant abuse of power.

Indonesian officials have time and again accused Singapore of
everything from giving protection to "black tycoons" who fled
Indonesia to avoid trial for misusing Rp 270 trillion (about
US$35 billion) in Bank Indonesia liquidity assistance, to
benefiting from illegal sand quarrying and exports at the expense
of its neighbor.

The problem, long kept hidden under a blanket of diplomacy,
resurfaced last week when Singapore Deputy Prime Minister BG Lee
told visiting Indonesian journalists at his office that it was
untrue his country provided a safe haven for unscrupulous tycoons
from Indonesia.

The number two man in Singapore's Cabinet said that it was
"impossible for Singapore to adopt such a policy because it would
tarnish its reputation as a center of the world monetary system,
along with London, Tokyo and New York". (Kompas, Feb. 19)

This statement by BG Lee was, however, in stark contrast to
the complaints of Indonesian Minister of Justice and Human Rights
Yusril Ihza Mahendra in January 2003, who said that Singapore
"not only provided a safe haven for black tycoons from Indonesia,
but also gave them Singaporean citizenship".

Some bankers from Indonesia who siphoned off a large chunk of
central bank liquidity assistance have reportedly fled to
Singapore to avoid paying their debts, and have opened businesses
in that country. The funds were channeled by the government of
former president Soeharto to salvage cash-strapped banks after a
run by customers following a crisis of confidence in financial
institutions in 1997.

Indonesia has asked Singapore to sign an extradition agreement
to make it easier for Jakarta to investigate and produce in court
those bankers now living in Singapore, but the requests have been
spurned by authorities in Singapore, who argue that the two
countries have different legal systems.

Yusril said Singapore's refusal to sign the treaty was
senseless because Indonesia had signed similar accords with Hong
Kong and Australia, which also have Anglo-Saxon legal systems.
(Kompas, Jan. 23, 2003)

Many Indonesians questioned Singapore's failure to cooperate
on the extradition treaty. They accused the city-state of a
double standard, because on the one hand it was concerned by the
threat of terrorism from Indonesia, but on the other hand it was
giving sanctuary to economic criminals who plundered Indonesia,
which can be categorized as a type of terrorism.

The other nagging problem that has lately irritated ties
between Indonesia and Singapore is the devastating impact of sand
quarrying and sand smuggling from the Riau islands to Singapore.

Singapore, which occupies 635 square kilometers of land,
reportedly needs 1.5 billion cubic meters of land and sand for a
massive reclamation project as part of the country's ambitious
10-year program to widen its territorial area to 760 square
kilometers. Most of the sand has been imported by Singapore from
the Riau islands for about S$1.30 (approximately 70 US cents) per
cubic meter.

Former Riau governor Saleh Djasit said last year the province
received only Rp 40 billion (US$5 million) in revenue from sand
exports in 2003.

The relatively small amount of revenue received by the Riau
government from the lucrative business of quarrying and exporting
sand to Singapore was the result of a lack of transparency in the
business, which resembled mafia activities. This business
involved more than 40 mining firms, many of which received
backing from corrupt Indonesian officials who took advantage of
loopholes in the legal system here.

The intensive sand mining has, however, caused serious
environmental damage to some islands, especially Nipah island, a
63 square kilometer islet 10 minutes from Singapore. President
Megawati Soekarnoputri laid a new border marker during a short
visit to Nipah on Thursday. And, at a cost of Rp 80 billion
(US$10 million), Indonesia plans to reclaim the island, which
serves as a frontline border with Singapore.

Singapore has so far closed its eyes to the environmental
destruction and sand smuggling, as if this was business as usual.

But the Nipah case suggests how expensive this irresponsible
sand business will be for Indonesia, and Singapore, as the
exporter of this commodity, must play a role to put an end to the
catastrophe.

Singapore also needs to go further by signing an extradition
treaty with Indonesia so that Jakarta can prosecute crooked
tycoons now hiding out in the city-state, if it does not want to
be viewed as an exploiter.

The writer is a visiting scholar at the Graduate School of
Journalism at the University of California, Berkeley.