SINGAPORE: Robust economic ties between Singapore and Indonesia are set to strengthen following 50 years of diplomatic relations, Minister for Trade and Industry (Trade) Lim Hng Kiang said on Tuesday (Jan 17).
Speaking at the Singapore Manufacturing Federation’s (SMF) Business Seminar, Mr Lim noted that Singapore was Indonesia’s third-largest trading partner in 2015 and Indonesia was Singapore’s fourth-largest trading partner that year. Singapore was also Indonesia’s largest foreign investor.
“We should continue to build on our existing bilateral relations to further expand economic cooperation and strengthen ties between businesses that will produce concrete and mutually beneficial outcomes,” said Mr Lim.
Also speaking at the event which was attended by around 250 government officials and business leaders from both countries, Indonesia’s Vice Minister for Foreign Affairs Abdurrahman Mohammad Fachir said more can be done to further economic ties between the ASEAN neighbours.
“Our partnership should be complementary in nature, putting forward our strength and significant potentials. This can be done through exchange of best practices, transfer of knowledge and experiences,” he said.
Dr Fachir added that partnership between both countries should contribute to regional peace, stability and prosperity, and strengthen both countries’ competitiveness in the long term. In particular, he highlighted that economic growth in certain parts of Indonesia, such as Maluku and Papua, came in around 13.7 per cent last year. Indonesia’s economic growth reached 5 per cent last year, he added.
Indonesia is also spending more to develop infrastructure across the country. Dr Fachir said the government has allocated around Rp346 trillion (US$26 billion), including its Viability Gap Fund for private sector investment in infrastructure.
Mr Lim noted that Indonesia has taken steps to strengthen its economy, including trimming longstanding fuel subsidies and improving the ease of doing business.
“These steps, coupled with Indonesia’s robust economic fundamentals - the size of its economy, growing urbanisation and middle class, as well as its demographic dividend - will help position Indonesia for stronger growth over the long term,” he said.
But Mr Lim added that Indonesia, like Singapore, is also facing headwinds from a sluggish global economy, as well as rising sentiments in anti-globalisation. He said: “It is essential that we do not get pulled along by this, towards a direction that can hurt our economies. Understandably, there is anxiety over external competition. However, the benefits of comparative advantage and collaboration should far outweigh concerns.”
INDONESIA AN "IRRESISTIBLE MAGNET"
Efforts are already underway to help Singapore companies enter the Indonesia market. For instance, Government agency International Enterprise Singapore has built strong relationships and networks with provincial governments and other companies, said Mr Lim. This will help create more opportunities for Singapore companies to enter other parts of Indonesia.
A recent survey found that Indonesia is the top overseas market that SMF members want to explore, so SMF is organising eight to nine business mission trips to Indonesia to connect its members to potential partners there.
“One should strike the iron while it is hot,” said SMF's president, Douglas Foo. “The economic appeal of the huge Indonesian market, coupled with the fact that conditions have become so much more attractive for foreign investors, make Indonesia an irresistible magnet for business people.”