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.