Singapore Relents To Sign Extradition Treaty

This article was first published in Singapore Angle.

Singapore has finally relented and agreed to an Extradition Treaty with Indonesia (CNA, 23 Apr 07). Indon politicians had accused Singapore of dragging its feet on the treaty because the country was harboring Indonesian fugitives of the Suharto era convicted of embezzlement. Any delays on the part of the PAP government was probably not to protect the freedom of any criminals, but more likely to be satisfied that any potential flight of capital out of Singapore due to an extradition treaty would not seriously impact the country’s economy.

So how much money would create such angst in the Yudhoyono government and cause the PAP government to risk bilateral ties? A look at the top 7 most wanted Indonesian white collar criminals that are currently on the run might provide some indication:

• Eddy Tanzil: Sentenced to 20 yrs. Embezzled $620 million from state-owned Bank Bapindo. Escaped and is now believed to be living in China.
• Bambang Sutrisno: Former VP of defunct Bank Surya. Sentenced to life for embezzling Rp1.5 trillion. Now apparently living in Singapore.
• Andrian Kiki Ariawan: Former president director of defunct Bank Surya. Sentenced to life for embezzling Rp1.5 trillion. Now apparently living in Singapore .
• Samadikun Hartono: Former president director of defunct Bank Modern. Sentenced to 4 yrs for embezzling Rp169 billion. Whereabouts unknown.
• Sudjiono Timan: Former president director of state-owned investment company PT Bahana Pembinaan Usaha Indonesia. Sentenced to 15 years jail for embezzling Rp1.1 trillion. Believed to be in Singapore.
• Maria Pauline Lumowa: Boss of PT Gramarindo Mega Indonesia. Suspected of embezzling Rp1.7 trillion from state-owned Bank Negara Indonesia. Fled to Singapore before trial.
• Irawan Salim: Former president director of Bank Global, suspected of embezzling Rp830 billion. Rumored to have fled to Singapore, Canada or Europe.

Source: Paras Indonesia

For a country that has been ravaged by corruption for so long, who knows how much of Indonesian money that has flowed into Singapore is potentially tainted. With an extradition treaty in place, how much of that money will stay around and risk being frozen as corruption investigations in Indonesia widen? It is also not difficult to see why Singapore was wary of the potential economic fallout if Indonesian money starts to leave Singapore:

• Foreigners' share of total caveats lodged for private properties in Singapore in 2006 increased to 23%. Indonesians accounted for the lion's share of 22% of foreign buyers. (BT, 21 Mar 2007)
• A third of Singapore's 55,000 high net worth individuals are Indonesians holding PR status, with assets worth $87b. (Merrill Lynch and Capgemini, October 2006)

Not only are trillions of rupiah involved (1trillion Rp is about S$170m), Indon President Yudhoyono’s political survival depends heavily on his ability to tackle corruption in Indonesia. Failure in pursuing these fugitives in an acceptable manner would seriously threaten his presidency.

Moral and ethical assertions aside, when would it be not in Singapore’s national interest to hold out on signing a treaty? Indonesia had probably realized this line of thought and had fired the first salvo in a game of quid pro quo by banning sand exports to Singapore and threatening to widen the ban to granite and wood. It seems Indonesia has played the right cards and has succeeded in getting the treaty she wants. Although how much the treaty is in Indonesian’s favour is still unknown as the terms of the treaty are yet to be made public. What is left is to see if Singapore has done its sums right and its economy can absorb outflows, if any, of Indonesian money.

Addendum:

A few readers in Singapore Angle saw my article as implicit support for harboring "dirty money". My reply:

I personally do not support harboring convicted white collar criminals. My intent was to discuss why, in my mind, PAP took so long to sign the treaty. Our relationship with Indonesia was never very good since Suharto's fall and the subsequent riots. One Indon president actually taunted us with the "little red dot in a sea of green" remark. It was only until the sand ban and its potential impact on PAP's plans for growth that it was forced to act. In addition to trying to gain something in return by throwing other issues onto the table (PAP is fond of what it calls a "win-win" agreement), I believe PAP had to also ensure due diligence by being certain IF and HOW MUCH dirty money is stashed in Singapore (not an easy task) and IF SO, would the key institutions involved be able to withstand any repercussions. I believe all these led to the delays.

In terms of risking the plans in being a financial hub in not addressing the accusations of harboring questionable money, we only need to look at Switzerland.

The Brutal Truth

Singapore Intelligentsia Speaks Out Against Minister Salary Hikes

A letter from NUS's Dr Hussin Mutalib which ST chose not to publish. Kudos to Wayne who brought this up.

STI Home > ST Forum > Online Story

April 6, 2007

Ministers' salary increase: Can it be delayed until there is more public consultation?

THE views expressed so far on this difficult issue rightly deserve attention, even as Singaporeans await the Government's presentation of its case in Parliament next week.

Given the unhappiness, it is hoped that the Government will do more to soothe this feeling during the Parliament sitting, and address this issue beyond the offer of relevant statistics and other pragmatic arguments.

This issue is not new. So too the attendant shock that many Singaporeans react to when this pay scheme was publicly goaded in the early 1990s and hotly debated in Parliament in 1995.

Let us recap the two sides of the argument. To the Government, we are fooling ourselves if we want to lure top talents but refuse to pay them top salaries, and that moral counter-points must give way to pragmatic ones.

The cost of living, the competitiveness of the market place in a global economy, the high standards of integrity and performance expected of ministers and the equally high cost to their private lives are imperatives that must be taken into account.

MM Lee even once argued that 'moral values on pay are good only for textbooks on socialism and political tracts on social justice'.

However, to many Singaporeans, other factors must be given consideration. To begin with, is it right to compare jobs in the public and private sectors since there are obvious fundamental differences between the two?

Secondly, while many have no problem with raising ministerial salaries as a matter of principle, the quantum of the raise seems to be unduly high, making our Cabinet ministers among the most highly paid in the world.

Thirdly, while we must credit the political leadership for securing Singapore a sterling economic position in the world - our Republic's GDP growth rate and foreign reserves are among the highest in the world - such a remarkable achievement could not have been attained without the contributions and sacrifices of an equally productive workforce.

Finally, this increase of ministerial salaries may convey the wrong signal that money is actually the bottomline, even in such a nationally important issue of political contribution and service.

What about other redeeming intangibles such as honour and sense of duty, dedication, passion and commitment, loyalty and service?

It may be difficult for many to believe that the talent pool is so small and that the able are so money-minded that the best way to get them to come forward is to give them more money.

Hopefully, the Government will do more to appease this unhappiness. What about delaying this proposed increase until more public consultation is done and a better way of compensating the ministers and senior civil servants be found?

Otherwise, many Singaporeans will feel the sheer helplessness that however unhappy they are about matters that are close to their hearts they will have little chance to be redressed, both outside Parliament and inside - and this is not good for Singapore's future.

Dr Hussin Mutalib

Elia Diodati has also published a letter from someone working in the US about his thoughts on the issue. A good read on the views of a brethren on the outside looking in.

Show Me The Money

Its been announced, the newspapers have been spinning it for days. Hue and cry from the great unwash, but everyone knows the likelihood of our displeasure causing a “rethink”- zilch. Ministers and some 230 Administrative Officers are raising their own salaries, some a whopping 80%, and nothing short of our sun going nova is going to stop them from getting what they think they are worth, nosiree.

You can guess which side of the fence I'm pounding standing. Yes, I've read all the reasons - competing with the private sector, paying top dollar or they will leave yadayada. Does it make sense? Yup. Would I give them a raise?...

If I were a shareholder of a for-profit corporation, my decision on whether to reward management will depend on what I’ve gotten in return for my investment, my ROI - dividends, bonus shares etc. You scratch my back, I'll scratch yours.

So now these Ministers and their 230 or so officers are asking for demanding announcing a raise. So how do I, as a tax-paying citizen, evaluate this request decree? How is my life (the ROI on my taxes) so far under these peanut-deficient men?

Top on the list, Jobs. They may say it’s the economy that’s most important. But what’s the point of having a roaring economy if you don’t have a job, or your job doesn't pay you enough? I support a government who can best look after my needs. Selfish you say. But the one that can satisfy the needs of the most gets to run the country. If I am the minority who doesn't benefit from existing policies, the government of my choice doesn't get elected. If the policies make more and more people less better off so much so that they become the majority, the government gets booted out. Isn’t that how it’s suppose to work? So jobs… I have a job, but I'm reaching a point in my career where my position is constantly under pressure from cheaper foreign imports. If I get laid off in the next few years, I'm done for. I'd probably have to switch industry, which means I'd have to start from scratch. That's 10+ years of career planning and hard work down the toilet. I'm not the only one facing this problem. Most of my friends are in the same boat. It is real and pretty widespread and is the result of various policies implemented by the current government.

Next, Housing. I was initially pretty satisfied with my housing situation. Although the value of my flat has fallen, I had no intention of moving so it was a paper loss. That was until my area was selected for en block redevelopment and I will be forced to realise the loss. Even after taking into account any compensation offered to cushion affected residents, this unplanned move is going to cost me around $100,000 – loss on current flat, built-in furniture, fixtures, floor tiling, kitchen etc. will have to be written off and new ones bought for the new flat. I've yet to work out if I would have to top up my bank loan... My MP? He says it can't be helped and I was unlucky to have bought my flat at the wrong time. I wonder if he knows what it feels like to be kicked out of your own home and moved around like a refugee.

Healthcare. I don’t know when it began. But recently I’ve begun to feel the sting of medical bills. I guess when I was younger, I just don’t see the doctor enough to feel the pain. But now, I’ve had consultations, x-rays, scans, checks, tests, scopes, a day surgery, medication etc. I’ve spent close to a month’s take home on medical. What’s it going to be like when I am 50? 60? As the healthcare system is currently still being revamped, I’ll reserve my judgment until it’s done. As of now, it is still bearable but will definitely get worse if nothing is done to tackle costs.

Living Costs. Up, up, up. Someone once said fed up. What else is there to say? Blaming it on globalization doesn’t make it less of a problem to me. I’ve heard you talk about cutting business costs year after year, when are you going to get some of those 230 AOs to work on cutting MY costs?

Quality of life. This is a biggie and a bit of a mix here. Law and order, cleanliness and infrastructure, I’ll sing the praises. But you know, there’s just this nagging feeling that something is missing from my life. People use to say Singapore is like her hospitals, it’s clean, it’s efficient, it has all the facilities, the shops, the food etc. Maybe that’s the problem, living in a hospital. You have around you everything that’s designed to keep you physically alive, but you just feel miserable. You just want to go home, where you are free to do whatever you want, eat whatever you want, sleep wherever and whenever you want, read and watch whatever you want… say whatever you want…

…what’s that? I have to pay you more or else you’ll go work somewhere else?

...