S'pore 'well-placed to benefit but more details needed'

The skyline of Singapore's  CBD.
The skyline of Singapore's CBD. ST PHOTO: LIM YAOHUI

Singapore will be in a strong position to benefit from Indonesia's opening up to foreign investments but businesses here will need more details, said economists and business leaders.

Singapore Business Federation chairman Teo Siong Seng said yesterday: "Singapore companies have the strength and experience in some of the sectors included in the list (for opening up) - such as healthcare, airport services and distribution and warehousing.

"But we await more details from Jakarta, especially in how these policies will be implemented."

Mr Teo noted that there have been many new announcements in the past 18 months or so but with very little follow-through.

"I'd be more than happy to work with our Indonesian counterpart, Kadin (the Indonesian Chamber of Commerce and Industry), to follow up on how we can help Singapore companies invest in Indonesia."

Standard Chartered Bank economist Jeff Ng pointed out that if Indonesia's growth accelerates as a result of this stimulus package, it will likely be most felt in Singapore through trade and investment.

Indonesia is one of Singapore's most important trade partners. Almost 7 per cent of trade here is with Indonesia while the Republic ships almost 6 per cent of its non-oil domestic exports there, said Mr Ng.

He also noted that in a recent survey, small and medium-sized enterprises here rank Indonesia as the second-most popular economy in Asia in which to expand their businesses.

Barclays chief economist Leong Wai Ho said that Singapore companies' expertise with infrastructure development - such as road, rail, urban planning and clean water technologies - is likely to be sought after by the Indonesians.

On the other hand, Indonesia's burgeoning urban population is a great draw for Singapore businesses looking to sell their products and services there, such as retailers and healthcare providers, he said.

CIMB Private Bank economist Song Seng Wun agreed that the opening up of Indonesia's healthcare sector will generate much interest among Singapore companies, given that Indonesia is one of the key sources for medical tourism here.

"They can explore opportunities for tie-ups with Indonesia, provided the necessary regulations are carried out," said Mr Song.

These new announcements could still face opposition from the Indonesians, who are becoming increasingly nationalistic, he added.

Nonetheless, Parkway Pantai, Singapore's largest private healthcare provider, is upbeat about the prospects of being able to invest in Indonesia.

"As a global healthcare player, we welcome any changes that further open up the market, and are open to opportunities that will add to our healthcare portfolio," said Dr Lee Hong Huei, Parkway Pantai's head of South-east Asia.

Mr Leong said that ultimately, if Indonesia develops as a source of revenue for Singapore firms, it will offer a convenient hedge to Singapore's interests in China, Vietnam and India.

"Our external wing will be more balanced and diversified."

A version of this article appeared in the print edition of The Straits Times on February 12, 2016, with the headline 'S'pore 'well-placed to benefit but more details needed''. Print Edition | Subscribe