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24 Apr 07
Do fugitive bankers in Singapore need to worry about being sent home?
Despite the conclusion of negotiations over an extradition treaty Monday night between Singapore and Indonesia that could potentially deliver some very rich errant bankers back to Indonesia, don’t expect to see anybody going home anytime soon.
At a joint news conference in Singapore Monday night by Singaporean Foreign Minister George Yeo and Hassan Wirajuda, foreign minister of Indonesia, the two said the agreement would be signed in Bali Friday.
“After two days and one night of arduous negotiation, we have reached an important agreement,” Yeo told reporters.
After dragging on for 34 years, the treaty became the focus of intense bargaining after Indonesia banned the export of sand to Singapore in December, ostensibly because the island republic was importing so much of what ought to be the world’s cheapest commodity that it was destroying Indonesia’s environment on a couple of nearby islands. That threw Singapore’s construction industry into a tailspin and forced the island republic to release sand from its stockpile to make up for the shortfall.
Sand is a crucial commodity for Singapore, which has been growing for more than 40 years on Indonesian soil. In 1960, the entire island state was only 581.5 square kilometers. It has since grown to some 650 sq km and expects to grow by another 100 by 2030 ?if it can find the firmament. And, while the pariah state of Burma has offered to be a long-term supplier of sand, granite and other construction materials, it is neighboring Indonesia that is the island’s only viable supplier. Malaysia has long since banned sand exports to Singapore.
The stalled sand barges on their way to Singapore were actually political leverage in the extradition squabble over a flock of crooked bankers said to be hiding out there after fleeing Indonesia following the 1997-1998 Asian financial crisis. Singapore has long styled itself as an Asian equivalent of Switzerland, maintaining strict banking secrecy laws. Government authorities have been refusing to sign the treaty, with officials saying they would only negotiate if the pact was signed in tandem with a security agreement. Singapore has been leery of Indonesian intentions ever since Indonesia’s then-president, Sukarno, staged what he called “Confrontasi” in an unsuccessful attempt to take over the entire island of Borneo between 1962 and 1966. Singapore was part of Malaysia at the time.
Indonesia believes the bankers took part in an astounding heist of more than US$13.5 billion looted from the Indonesian central bank’x recapitalization lifeline to 48 ailing banks. According to Indonesian authorities, the recipient banks, many owned by cronies and relatives of the ousted strongman Suharto, used much of the money for currency speculation, loans to affiliated business groups and repayment of subordinated loans and securities transactions instead of guaranteeing creditors?deposits.
But more than that, an astounding 18,000 Indonesians considered to be worth more than US$1 million are living in Singapore, population 4.5 million, with an aggregate wealth of US$87 billion, according to a 2006 study, “the Asia-Pacific Wealth Report” by Merrill Lynch and the consulting company Capgemini. Indonesia, with a population of 180 million, has only 17,000 millionaires itself.
The city-state has always been a bolt-hole for Indonesian tycoons, many of them Chinese, a step ahead of the law or sporadic ethnic violence such as that which swept Indonesia after the financial crisis. Yunus Husein, Chairman of the Financial Transactions Report & Analysis Center in Jakarta, told reporters that the Indonesian embassy in Singapore had confirmed that some 200 debtors who owe money to the state had been hiding there since 1998.
Singaporean officials protest that the country’s Prevention of Money Laundering Act of 2002 contains a legal requirement under which financial institutions are legally required to report suspicious transactions. Critics, however, say the law applies only to transactions linked to serious crimes or terrorism or revenues derived from illegal logging. Fund managers and others in the financial world ?most notoriously Morgan Stanley strategist Andy Xie, who was fired for saying so out loud – say the island republic has increasingly become a global center for hot money from as far away as China and Russia, let alone Indonesia, an embarrassment for a statelet that prides itself on its reputation for incorruptibility, built and guarded by its 83-year-old founder and Minister Mentor, Lee Kuan Yew, over more than five decades.
Although Indonesia has long said an extradition treaty was necessary to repatriate the corrupt bankers and politicians and their stolen billions, don’t look for any to be back before the bar of justice any time soon. Many of those who are in Singapore or other parts of the world bribed their way out of the clutches of Indonesia’s notoriously corrupt courts to get to Singapore in the first place.
Among many others believed to be on the lam are Sjamsul Nursalim, former president commissioner of Bank BDNI, who reportedly lives in Singapore. Bank BDNI was the second-largest recipient of funds after Bank Central Asia, a Rp37 trillion gift from the government. Samadikun Hartono, former president director of the now-closed Bank Modern, was found guilty of embezzling Rp169 billion and sentenced to four years in jail; there have been no public reports of his whereabouts.
Singapore, Indonesia agree extradition treaty
24 Apr 07
Singapore and Indonesia have agreed on an extradition treaty that Jakarta hopes will boost its fight against corruption, the foreign ministers of both nations said late Monday.
The accord, which Jakarta considers vital in its pursuit of suspects wanted in Indonesia for corruption, will be signed on Friday in the Indonesian resort of Bali, a joint statement said.
Lawmakers in Jakarta have said the city-state is used by Indonesian criminals to launder money — an allegation Singapore has denied.
Singapore Foreign Minister George Yeo and Indonesian Foreign Minister Hassan Wirayuda will sign the pact in the ceremonies to be witnessed by their respective leaders, the statement said.
The defence ministers of the both nations will also sign a defence cooperation agreement which had been negotiated in parallel with the extradition pact.
“The talks were characterised by a high degree of cooperation, friendship, flexibility and goodwill,” Yeo told reporters at a late-night news conference.
“Goodwill is in ample supply on both sides so we were able to reach a good agreement for both the extradition treaty and defence cooperation.”
Wirayuda said: “We strongly believe that the conclusions of these two agreements would strongly contribute in our joint efforts to strengthen our bilateral relations.”
Journalists had been summoned to a news conference in the early evening, but the ministers emerged only late into the night, with aides saying talks were still ongoing.
Yeo told the news conference that Indonesian senior officials had arrived here Sunday and negotiated “all night” with their Singaporean counterparts.
Wirayuda and Indonesian Defence Minister Juwono Sudarsono arrived Monday morning and took over the negotiations, he added.
Yeo said more details on the two agreements are expected to be released on Friday.
The joint statement said that the ministers and armed forces chiefs endorsed the text of the extradition and defence cooperation agreements drafted by their respective negotiating panels.
Negotiations for the extradition treaty started in 2005.
Indonesian officials have said that a number of suspects, including former officials and businessmen, are alleged to have fled Singapore and put their money in banks and other investments in the affluent island-nation.
Singapore, a regional financial centre, has denied the allegations and insisted it has enough safeguards to prevent the country from becoming a magnet for laundered funds.
Some officials in Jakarta had accused Singapore of delaying the signing of the extradition accord.
In January, Indonesia abruptly banned the export of land sand used to make concrete, a move that is hurting contractors in Singapore’s booming building and construction industry.
Although it was not included in the sand ban, Indonesian authorities also detained several barges carrying granite to Singapore, effectively disrupting supplies of the material also used to make concrete.
Jakarta’s official line was that the sand ban was imposed to stop the destruction of the environment caused by sand quarrying.
However, some senior Indonesian officials have been quoted in the media as saying the ban was carried out to force Singapore to sign the extradition treaty