Singapore's close economic, social and security relations with Indonesia were reiterated during the fourth Leaders' Retreat last week when Indonesian President Joko Widodo met Prime Minister Lee Hsien Loong here. Growing cooperation in trade, investments and tourism has placed Singapore consistently among the top investors in Indonesia. Indeed, it has been the largest foreign investor there since 2014, with realised investments reaching US$9.2 billion (S$12.6 billion) last year. Both countries have also been among each other's largest sources of tourist arrivals. Meanwhile, Singapore has trained thousands of Indonesian officials and trainers under more than 20 bilateral agreements. On the security front, an array of defence exercises and exchanges testifies to overlapping perceptions of how to deal with potential threats. Counter-terrorism remains an important shared objective. Such concerns are real, underlined by the attack on Indonesia's Coordinating Minister of Political, Legal and Security Affairs Wiranto last week. Singapore's denunciation of the attack shows how seriously it takes manifestations of terrorist and extremist behaviour in the neighbourhood of which it is a part.
Singapore's ties with Indonesia are not only to their bilateral advantage but also help to strengthen Asean's centrality in regional affairs. A case in point is the renewal of a US$10 billion currency pact, which will continue to give both countries access to each other's currency as well as United States dollars to settle trades or defend their currency in times of financial stress. This arrangement will help to support monetary and financial stability in the region as a whole in the face of raids by currency speculators during an economic crisis. Memories are still fresh of the Asian economic meltdown two decades ago, which was precipitated by cowboy currency traders who heavily shorted regional currencies. Currency pacts signal to nomadic speculators that regional nations can band together to fend off divide-and-rule attempts by predators. Singapore and Jakarta, by working together, deepen their deterrence against another currency invasion.