Mr S Iswaran at the Singapore-Indonesia Business Dialogue

Opening Remarks by Mr S Iswaran, Minister in the Prime Minister’s Office, Second Minister for Home Affairs and Trade & Industry, at the Singapore Indonesia Business Dialogue at Island Ballroom, Shangri-La Hotel, on 28 July 2015, 3.30pm

Your Excellency Bapak Joko Widodo, President of the Republic of Indonesia

Your Excellencies Distinguished Ministers from the Republic of Indonesia

Mr Teo Siong Seng, Chairman of the Singapore Business Federation

Bapak Suryo Bambang Sulisto, Chairman of the Indonesian Chamber of Commerce and Industry

Distinguished guests

Ladies and Gentlemen

1             Good afternoon.  I am pleased to join you at this afternoon’s Singapore-Indonesia Business Dialogue.  Let me first extend a warm welcome to His Excellency Joko Widodo, President of the Republic of Indonesia and his distinguished delegation.  Mr President, your visit marks yet another milestone in the growing ties between our two countries. The gathering here today is testament to the deep interest and commitment that the business community here in Singapore has for Indonesia, and I know that many of them are looking forward to learning more about your vision for Indonesia and its economy.  I would also like to welcome the Indonesian and Singaporean businessmen who are here today.  It is an opportune occasion to cement old friendships and forge new relations.   

Strong bilateral economic ties

2             Indonesia and Singapore are close geographic neighbours, founding members of ASEAN, and longstanding partners.  A strong economic foundation underpins our bilateral ties.  This is borne out by our growing bilateral economic activity.  Bilateral trade has been increasing in the last decade, with total trade standing at S$72.4 billion in 2014.  Indonesia was Singapore’s 4th largest trading partner in 2014

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and Singapore has consistently ranked amongst Indonesia’s top five investors since 2001.  In fact, Singapore was Indonesia’s top foreign investor in 2014, with total investments amounting to US$5.8 billion, a 25 percent increase from 2013

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.  People to people flows also continue to remain strong with Singapore and Indonesia being among each other’s top sources of tourist arrivals.

Indonesian economy – challenges and opportunities

3             Indonesia’s economy has performed well over the past decade.  Macroeconomic conditions have generally improved – inflation has fallen from double to single digits, and government debt as a share of GDP is now lower than the majority of advanced economies.  However, like the Singapore economy, Indonesia’s economy is facing some headwinds – with slower growth.  President Joko Widodo and his government have taken concrete steps to strengthen the economy – he trimmed longstanding fuel subsidies, enhanced the investment climate by streamlining business permit processes and is committed to improving governance.  This, coupled with Indonesia's strong economic fundamentals – the size of its economy, growing urbanization and middle class, as well as its demographic dividend – will position the country for stronger growth over the long term.

Singapore-Indonesia economic opportunities

4             Against the global economic backdrop of slow growth and weak demand in the advanced economies, it is now even more important for our economies and businesses to work together to capitalise on emerging economic opportunities in the region.  In that regard, Singapore is committed to deepening our economic links with Indonesia.

5             On the business-to-business front, Singapore companies are looking to explore opportunities in Indonesia.  For example they are keen to contribute to Indonesia’s infrastructure development.  This complements Indonesia’s plans to promote infrastructure investments.  For instance, we understand an infrastructure task force will soon be set up in Indonesia to bypass regulations which might hamper infrastructure development projects.  These initiatives are important.  If coupled with a stable and transparent business environment for companies, and a consistent message that foreign investments are welcome, it will create a conducive investment and business climate.

6             We have continued to actively facilitate business-to-business linkages.  First, my colleague Mr Teo Ser Luck, Minister of State for Trade and Industry, led the first foreign business mission under the President Joko Widodo Administration to Jakarta and Semarang in November 2014.  Feedback from the participating 25 Singapore companies was positive.  Many of these companies have made valuable and fruitful connections during the trip.  Second, an important sign of growing business-to-business ties, Prime Minister Lee Hsien Loong and President Joko Widodo witnessed the signing of a Memorandum of Understanding between our Singapore Business Federation (SBF) and Indonesian Chamber of Commerce and Industry (KADIN) at the Istana earlier today.  The MOU aims to increase economic cooperation between the two chambers of commerce.  I welcome this initiative and encourage businesses on both sides to take advantage of this to identify new opportunities for win-win collaborations.

7             At the government-to-government level, Indonesia and Singapore have an existing platform for economic collaboration – the Six Bilateral Economic Working Groups (6WG) which covers cooperation in (i) Batam, Bintan and Karimun (BBK) and other Special Economic Zones (SEZs); (ii) Investments; (iii) Transport; (iv) Tourism; (v) Manpower; and (vi) Agri-business.  At the 6WG Ministerial Meeting last week in Jakarta, co-chaired by my colleague Minister Lim Hng Kiang and Indonesia’s Coordinating Minister for Economic Affairs, Dr Sofyan Djalil, both sides successfully identified additional areas of cooperation that will further benefit businesses.  These include promoting investment opportunities, collaborating on Public-Private Partnership projects, and expanding connectivity cooperation to include maritime collaboration.  These will further strengthen our economic ties.

8             Both Singapore and Indonesia also recognize the value of deepening regional integration in bringing about better jobs, higher wages and higher standards of living.  In this context, 2015 is an important year.  A key priority for us this year is the realization of the ASEAN Economic Community (AEC) which will reduce barriers, facilitate trade and provide more prospects for businesses in the region.  A single ASEAN market will generate demand for more products and services.  It also presents opportunities for collaboration between our two business communities.  I am confident that Singaporean and Indonesian companies will complement each other’s strengths and explore new opportunities arising from the AEC together.   

Conclusion

9             With the changing global economic landscape, it is imperative for businesses to seek new growth opportunities.  Today’s dialogue is therefore a valuable platform to foster greater understanding, and business linkages between our two countries.  I encourage companies in both countries to build on the positive inroads made and seize opportunities to deepen collaboration for mutual benefit.

10          I would like to thank President Joko Widodo for leading such a distinguished delegation to Singapore.  I wish you and your delegation a productive and memorable visit to Singapore and everyone a successful and fruitful business dialogue today.  We look forward to further strengthening and deepening the longstanding partnership between Indonesia and Singapore.  Thank you.

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Source: IE Singapore, with EU28 as separate entities. Malaysia, China and the US are ahead of Indonesia.

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Source: 2014 statistics from Indonesia Investment Coordinating Board (BKPM)