Indonesia says Singapore wants to retain laundered money

Radio Australia
1 Mar 07

Indonesia’s vice president claims Singapore is refusing to sign an extradition treaty because it wants to retain billions of dollars in allegedly corrupt money.

Jusuf Kalla says the cash was allegedly taken out of Indonesia by fleeing tycoons during the 1997-1998 Asian financial crisis.

He says if the treaty is signed, the corrupt Indonesians will not want to live in Singapore, but their money strengthens Singapore’s economy.

The absence of a bilateral extradition treaty is causing friction between the two countries.

Jakarta claims many suspects wanted in Indonesia have fled to Singapore, which is also used by Indonesian criminals to launder money.

Indonesia unhappy over Singapore’s refusal to sign an extradition treaty
John Aglionby
Financial Times
1 Mar 07

Indonesia’s economy will grow by up to 7 per cent this year, its fastest growth in the decade since the Asian financial crisis, the country’s powerful vice-president forecast on Tuesday.

In an interview with the Financial Times Jusuf Kalla also lashed out at Singapore for refusing to sign an extradition treaty with Indonesia, accusing the island state of trying to keep billions of dollars in allegedly corrupt money siphoned out of Indonesia by fleeing tycoons in the 1997-98 financial crisis.

“Singapore often says there’s so much corruption in Indonesia. But when we want to work together on combating corruption, they don’t want to,” Mr Kalla said.

Singapore has said that Susilo Bambang Yudhoyono, Indonesian president, and Lee Hsien Loong, the Singaporean prime minister, agreed in 2005 that any extradition treaty could only be signed together with a defence co-operation agreement. But Mr Kalla dismissed that claim.

“They’re thinking on the business side. If this treaty is signed then the corrupt Indonesians won’t want to live in Singapore any more. That’s all it is. It strengthens Singapore’s economy.”

Mr Kalla’s predicted growth rate is well above the government’s stated goal of 6.3 per cent growth this year in south-east Asia’s largest economy. Most independent economists have predicted growth of about 6 per cent after last year’s 5.5 per cent.

“Our growth this year can be above 6 per cent, up to 7 per cent,” he said. “Perhaps it’s too optimistic but with all the conditions that are now in place it should be achievable.”

Mr Kalla has long been one of the most bullish figures in Mr Yudhoyono’s government, which took office in 2004 with a mandate to accelerate reforms and boost economic growth.

One Jakarta-based economist said the vice-president’s prediction was unlikely to be met for years because “the pace of reform is just moving too slowly”.

But Mr Kalla said the resolution of ethnic conflicts in places such as the tsunami-ravaged Aceh province, a reduced threat of Islamic terrorism and accelerating infrastructure development were all positive for the economy.

“In 2000 there were all kinds of risks, political, security, conflict everywhere,” he said. “Now there isn’t any of that…But the bottom line is that no country’s image is going to be good if the economy is not in good shape. For example, China used to be bad. But now people are not talking about democracy there. They think the place is great. So in Indonesia the economy has to take priority.”

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