SINGAPORE - Singapore needs to find new ways of engaging Indonesia by working with the latter's millennials who are not as inward looking as the old regime, and extending its focus to regions outside of Jakarta where there is hunger for growth.

"The millennials in Indonesia don't trust the government...For the young people, the government is the problem, not the solution,'' said Dr Leonard Sebastian, Coordinator of the Indonesia Programme at the Institute of Defence and Strategic Studies (IDSS), S. Rajaratnam School of International Studies.

"There is going to be a lot of adhocism in terms of the way people operate. You will find that much of the real work will be done on the side of the government structure," he told a panel discussion on Tuesday (Aug 29)

These young people, who are keen to change mindset in Indonesia, get around the government by creating structures such as task forces, he said. Citing Indonesia's Special Detachment 88 (Densus 88) as an example, he said the task force was set up outside the formal police structure, making it a more effective unit in fighting terrorism.

"The traditional government-to-government type of working will not work anymore..We need people-to-people engagement," Dr Sebastian told participants of the panel discussion titled "Singapore - Indonesia Ties at 50: What Lies Ahead."

Singapore and Indonesia mark 50 years of diplomatic ties next month and questions remain over how the relationship will evolve in the next half-century.

"We now cannot depend on the type of rapport between Mr Lee Kuan Yew and President Suharto.. the people who built those linkages are no longer influential... We need to build new relations and new partnerships," he said. "Within the next five to 10 years, we will have to deal with a new group of people we have no feeling for."

DEEPEN UNDERSTANDING OF EACH OTHER

Dr Sebastian also expressed concern that it is hard to find young Singaporeans who want to learn more about Indonesia.

"We need to build a group of young leaders who understand Indonesia. Our pioneer leaders knew Indonesia very well but not the younger leaders. If we don't address this, we will have a big problem," he warned.

He said the engagement should extend beyond the government level to, for example, non-government organisations (NGOs), schools and universities. It should also work both ways, with the Indonesians learning more about Singaporeans.

Agreeing on the need for more people-to-people engagement, another panelist Francis Chan, The Straits Times' Indonesia Bureau Chief, said Singaporeans tend to have certain stereotypes about Indonesia.

"They talk about nice beaches, cheap food and cheap nightlife. But all these are just a small aspect of what the country is,'' he said.

"The Indonesians are extremely dynamic people. The young people there are hungry for success and change. They are also extremely creative...They will definitely give Singaporeans a run for their money."

Mr Chan said some Singaporeans are concerned about issues like language barrier, talk of corruption, red tape and religious tensions.

"Since Mr Joko Widodo became president in 2014, there has been a sea change. It is not perfect, and still work in progress. But the change is enough to open up the market a little bit more for us."

Mr Chan said while there were concerns over the huge Muslim street rallies late last year to topple then-governor Basuki Tjahaja Purnama, a Chinese Christian, those were orchestrated with a political - not religious - agenda.

"Around the country there is a sense of wanting to change, wanting reforms," he said. "I think it is unlikely that this will spill over like in 1998", when Indonesian Chinese minorities were targeted.

INCREASE ENGAGEMENT OF REGIONS OUTSIDE JAKARTA

Dr Sebastian also said Singapore needs to focus more on the regions outside of Jakarta.

"It is more productive for us to go down to the regions, to reach out to the provinces which are very interested to cooperate with Singapore, as opposed to just dealing with Jakarta.

"Because at the national level, you will be faced with all these issues of size differential between Singapore and Indonesia, at the provincial level there is no size differential. They welcome Singapore. We need to build on that for the next 50 years."

Dr Sebastian also said Mr Joko is the first product of reformasi who has been empowered by the decentralisation process in Indonesia. Coming from Solo, Mr Joko became governor of Jakarta and later, president of Indonesia.

Given that Indonesian political parties will continue to field candidates from outside of Jakarta for key leadership posts, it is in Singapore's interest to focus on the other regions as well, he added.

TAP ON SINGAPORE'S SOFT POWER

During the Q&A session, Dr Sebastian said Singapore needs to think strategically about what is its soft power.

One way the city state can enlarge its footprint in Indonesia is through training.

"Our engagement should not just be in business and investment... That is what the Chinese are doing...We need to break away from the PRC model.

"We need to combine a human resource model where we train civil servants and regional leaders," he said, adding that this could also include student exchange programmes.

"If we can show we are doing a host of things in tandem with our investments in Indonesia, it will be a big plus for Singapore in the long run," he added.

HIGHER DEMAND IN SERVICES SECTOR

Indonesia's youthful population means there will be higher future demand in services sector such as mobile banking and e-commerce, said another panelist Ms Selena Ling, head of Treasury Research and Strategy at OCBC Bank.

"E-commerce is one platform where you can reach across geographically dispersed regions.. in terms of banking, instead of trying to set up branches all over Indonesia, mobile banking is the way to go."

Indonesia's large domestic market of some 250 million people also means that there is room to ramp up the country's manufacturing sector, she said.

But she added that Singapore won't be the only game in town as China is already making investment inroads.

Indonesia, South-east Asia's biggest economy, is slated to grow by around 5 per cent this year for the third year running.

The panel discussion on Tuesday was organised by The Straits Times, in partnership with OCBC Premier Banking. It was held as a lead-up to the newspaper's annual year-end Global Outlook Forum.