Responding to press queries on Indonesian Foreign Minister (FM) Alwi Shihab's comments to the press on Singapore-Indonesia relations on 27 November 2000, MFA spokesman wishes to clarify the following:
i) Oil smuggling. In August this year, FM Alwi Shihab spoke to Minister S Jayakumar about Indonesia's concern with oil smuggling from Indonesia into Singapore. Minister Jayakumar replied that Singapore had strict laws on smuggling. However, as this was the first time the matter was raised, Minister Jayakumar asked FM Alwi Shihab for details and evidence that could be passed on to our enforcement agencies. To date, no such evidence has been received.
(ii) Rupiah trading. Singapore is a major financial centre like New York, London, Hong Kong and Tokyo. Foreign currency trading in Singapore, as in these other international financial centres, is conducted by international commercial banks and other financial institutions over which the Singapore government does not exercise any control. The Singa-pore Government does not engage in currency trading in Indonesian rupiah. The Monetary Authority of Singa-pore (MAS) intervenes in foreign exchange markets only to manage the exchange rate of the Singapore dollar, and does so using only the US dollar as the intervention currency.
(iii) Senior Minister Lee Kuan Yew's Comments. Senior Minister Lee Kuan Yew has not publicly criticised the Indonesian elite. Nor has he said that the days of President Abdurrahman Wahid's government are numbered. SM Lee had no reason to say or suggest this to President Abdurrahman Wahid.
(iv) Investments from Singapore. FM Alwi Shihab stated that SM Lee said that "in two years, the investment will be hard, difficult to come to Indonesia as long as the people of Indonesia do not trust the elite". What SM Lee in fact said was that "until Indonesia's leaders restore order in Indonesia, investor confidence will be weak".
In the last two years, there has been sizeable Singapore investment in Indonesia. In January 1999, the West Natuna Gas Agreement was concluded between Singapore's Sembawang Gas Pte Ltd and Indonesia's state-oil company, Pertamina. This deal is expected to generate earnings of US$8 billion over 22 years and create employment for many Indonesians. In March 2000, the Government of Singapore Investment Corporation participated in an international consortium, led by Cycle and Carriage (Singapore), by investing US$76 million in Astra. All foreign investors, however, have to make commercial decisions based on their own analysis of risks to returns.
MINISTRY OF FOREIGN AFFAIRS
29 NOVEMBER 2000