November 15, 2016
Singaporean Prime Minister Lee Hsien Loong’s visit to Central Java on Monday marked a new chapter in the economic ties between Singapore and Indonesia, symbolized by a joint venture in the development of a key industrial compound. Lee and President Joko “Jokowi” Widodo officially launched the Kendal Industrial Park, located in Central Java. The two leaders were in the province’s capital Semarang for a leaders retreat aimed at discussing issues related to bilateral ties, particularly economic cooperation. In a ceremony after the meeting, Jokowi cited the industrial park located in Kendal regency, which is on the outskirts of Semarang, as the “new icon” in bilateral ties.
The events were held as Singapore has been exploring investment opportunities outside the traditional areas of Batam -- located less than an hour from Singapore by ferry -- and Greater Jakarta. The Kendal industrial park, a joint venture between Indonesian property giant PT Jababeka and Singaporean Sembawang Corporation, or Sembcorp, is Singapore’s first industrial park in Indonesia outside the Batam, Bintan, and Karimun areas in Riau Islands. “I hope that this cooperation continues to flourish,” said Jokowi.
Citing the importance of the compound, Jokowi pledged it would be a priority industrial zone housing an array of labor-intensive sectors, such as manufacturing, furniture, fashion, food and high-tech industry. Lee added that the industrial park was a clear example of a win-win outcome displaying “what the two countries can do by working together for the long-term benefit of our people”. The ongoing first phase of the 2,700-hectare park covers more than 800 hectares. Having attracted 20 companies, 4,000 jobs are expected to be generated from the project. Singapore, Lee said, wanted Indonesia to succeed because the two economies “are closely intertwined”.
“And I am confident that under President Joko Widodo’s leadership, our bilateral friendship will continue to flourish and there will be many more win-win projects like KIK [the Kendal industrial park] to come,” Lee added. Singapore is Indonesia’s biggest investor this year, with investment totaling US$7.1 billion in the first nine months. The figure is up by 44 percent compared to the same period last year. In a bid to improve the business climate, Indonesia has taken numerous measures, including through economic deregulation and legal reform, and has been pushing for massive infrastructure development to improve connectivity in the archipelago. But it was “batik diplomacy” that appeared to be an ice-breaker for the two leaders in Semarang. Jokowi and First Lady Iriana took Lee and his wife Ho Ching to see how batik was made. Lee was seen taking pictures using his mobile phone before Jokowi told him to try batik-painting himself.
During the leaders meeting, which was initially scheduled for August but postponed after Lee suffered from a temporary drop in blood pressure, Jokowi deemed Singapore as “one of our key partners in trade and investment”, while Lee confirmed bilateral relations “are in good shape”. Lee also told Jokowi that Singapore was willing to collaborate to help Jokowi’s ambitious 35,000-megawatt power plant program. Another possible future cooperation was to establish a network of business leaders from both countries, dubbed the Indonesia-Singapore Business Council, Lee said, adding that he believed doing so would enhance bilateral ties. Lee made the proposal during the meeting, a plan, in which, according to Lee, was later agreed by Jokowi.
“This will enable our businesses to network more deeply and understand opportunities on both sides,” Lee added. The neighbors also signed a memorandum of understanding (MoU) on tourism cooperation, which will open the door for possibilities to develop new tourist destinations in Indonesia and to expand cruise routes, while Lee also expressed Singapore’s support in helping Indonesia’s capacity building in hospitality and tourism.