By: Hafid Abbas
Professor of Human Rights, Jakarta State University
Jakarta should demand a more balanced economic partnership with Singapore, grounded in financial transparency, mutual security and shared responsibility for regional prosperity.
Indonesia and Singapore have enjoyed decades of close economic cooperation. Their geographical proximity, interconnected markets and strategic interests have made the relationship one of Southeast Asia’s most important bilateral partnerships. Yet beneath this economic success lies a fundamental question: Are the benefits, responsibilities and risks of this relationship distributed fairly?
A statement attributed to former finance minister Sri Mulyani Indrawati that approximately 80 percent of Indonesian assets are held in Singapore deserves serious public scrutiny. The precise statistical definition and methodology behind this figure need clarification. Nevertheless, it raises an important question about why substantial Indonesian wealth is held outside the country and whether such capital contributes adequately to Indonesia’s economic development.
Holding assets in Singapore is not inherently illegal. Singapore has developed a sophisticated financial system, strong institutions and an attractive investment environment. Indonesians, like other international investors, are entitled to make legitimate financial decisions. However, the distinction between lawful investment and the concealment of wealth derived from corruption, tax evasion or other financial crimes must never be overlooked.
Indonesia should therefore pursue a more balanced economic relationship with Singapore, founded on three universal principles: reciprocity, mutual security and shared prosperity.
First, reciprocity must become the foundation of bilateral economic cooperation.
Reciprocity does not mean that both countries must generate identical financial returns. It means that economic cooperation must respect the legitimate interests of both parties and produce meaningful benefits for their respective economies.
Singapore is an important investment gateway for Indonesia. According to Statistics Indonesia (BPS), Singapore accounted for approximately US$20.08 billion of Indonesia’s realised foreign investment in 2024, making it the largest reported source country. However, this figure also reflects Singapore’s role as a regional financial and corporate hub, and should not be interpreted as representing exclusively Singaporean-owned capital.
Indonesia contributes a vast consumer market, natural resources, industrial opportunities and strategic economic access. Singapore contributes financial expertise, investment capital, technology and international connectivity. These complementary strengths should create mutual prosperity rather than an economic relationship in which one jurisdiction disproportionately captures financial advantages while the other bears substantial environmental and social costs.
Both governments should strengthen beneficial ownership transparency, prevent tax avoidance and ensure that investment structures cannot be used to conceal illegally acquired wealth. Indonesian enterprises should also enjoy fair opportunities to access Singapore’s financial and commercial markets.
Second, mutual security must extend beyond conventional national security.
Economic security, political stability, financial integrity, environmental protection and socio-cultural resilience are equally important dimensions of bilateral relations.
Singapore’s position as an international financial centre carries significant responsibilities. Its institutions should not become convenient channels for laundering proceeds of corruption, illegal resource exploitation, tax crimes or other financial offences.
Indonesia has a legitimate interest in tracing, investigating and recovering assets derived from criminal activities, wherever those assets are held. Both countries should strengthen cooperation through financial intelligence, beneficial ownership verification, information exchange, asset tracing and lawful asset recovery.
Environmental security deserves particular attention.
Indonesia’s recurring forest and peatland fires have caused severe damage to public health, biodiversity and economic productivity, while transboundary haze has affected neighbouring countries, including Singapore and Malaysia. The palm oil and forestry industries require particular scrutiny because irresponsible land clearing and peatland management can contribute to devastating fires.
Corporate accountability must extend across borders. Singapore-registered companies and investors with Indonesian plantation interests should be expected to exercise responsible oversight of their operations and supply chains.
Singapore’s Transboundary Haze Pollution Act provides an important example of the potential for cross-border accountability. In October 2026, Singapore’s National Environment Agency issued information notices to 10 Singapore-registered companies connected to Indonesian land concessions or plantation operations, seeking information concerning corporate relationships and fire prevention measures.
These notices do not establish that the companies caused particular fires. Nevertheless, they demonstrate the importance of investigating corporate responsibility rather than allowing ownership structures and jurisdictional boundaries to obstruct accountability.
The principle should be clear: companies must not privatise profits while transferring environmental and social costs to Indonesian communities.
Third, shared prosperity must become the ultimate measure of economic cooperation.
Bilateral relations should not be evaluated exclusively through investment figures, trade volumes or corporate profits. Their success should also be measured through employment opportunities, technology transfer, industrial development, environmental sustainability and improvements in citizens’ welfare.
Indonesia and Singapore should develop a more ambitious cooperation agenda encompassing downstream industrialisation, renewable energy, digital infrastructure, research, education and human capital development.
They should also establish stronger mechanisms to combat illicit financial flows, facilitate the recovery of criminal assets, strengthen environmental accountability and ensure that multinational corporations contribute fairly to the economies and communities in which they operate.
If bilateral negotiations fail to deliver meaningful progress, Indonesia should elevate these concerns through ASEAN. Regional cooperation could establish stronger standards for beneficial ownership transparency, cross-border financial investigations, tax cooperation and corporate environmental responsibility.
Such initiatives should be pursued through lawful, proportionate and coordinated diplomatic and economic measures, not arbitrary retaliation. Indonesia should seek to mobilise ASEAN’s collective institutional strength to ensure that no financial jurisdiction benefits from regulatory weaknesses at the expense of its neighbours.
Ultimately, Singapore’s prosperity and Indonesia’s prosperity should be complementary, not contradictory.
Indonesia is not asking Singapore to sacrifice its economic success. It is asking for a partnership in which financial wealth, investment opportunities and commercial advantages generate sustainable benefits for both societies. Equally, Singapore has a legitimate interest in a prosperous, politically stable and environmentally secure Indonesia.
The time has come for both governments to establish a new compact for bilateral economic relations, built on three universal principles: reciprocity, mutual security and shared prosperity.
These principles should not remain diplomatic rhetoric. They must translate into measurable commitments, transparent institutions and enforceable cooperation.
ASEAN’s credibility as a community of shared prosperity will ultimately depend not on how much wealth its financial centres accumulate, but on whether that wealth contributes to the economic security, environmental sustainability and human dignity of all its peoples.
Indonesia must no longer remain merely the last receiving hand in its bilateral economic, socio-political and security cooperation with Singapore; it must stand as an equal partner, confidently asserting its national interests, demanding reciprocity and ensuring that every aspect of this partnership delivers tangible benefits for its people, sovereignty and long-term prosperity.
