Thursday, October 12, 2006

Funds Parked in Singapore Belongs Mainly to Embezzlers

Funds Parked in Singapore Belongs Mainly to Embezzlers
by Padjar Iswara and Ewo Raswa
TEMPO Interactive
Oct 12, 2006

Indonesian Corruption Watch (ICW) suspects that a large part of the Rp506.8 trillion in funds parked in Singapore is owned by former embezzlers of state and private national banks.

Teten Masduki, the Coordinator of ICW, said that there were in fact some law-abiding Indonesians who have assets and save their funds in Singapore.

However, the amount of these funds is relatively small compared to that of former embezzlers.

“It’s a pity to see they still save their money there,” Teten told Tempo.

His remark was in response to the result of Merrill Lynch and Capgemini’s survey which reported that one-third of 55,000 Singapore’s rich people are Indonesians.

The number reaches a total of 18,000 and their status is that of permanent residents (foreigners who have permanent stay permits) in Singapore.

The global financial organization estimates that the amount of assets of Indonesian people in Singapore is S$87 billion, or around Rp506.8 trillion.

According to Teten, embezzlers prefer to deposit their funds in Singapore because they feel safe there although the origin of the funds is illegal.

The reason for this is that Singapore does not have a Money Laundering Law nor is it yet willing to sign an extradition agreement with Indonesia.

Through such an agreement, Indonesia can force Singapore to surrender bad debtors, including return of assets and funds.

Teten acknowledged that Indonesians also save funds in Singapore because of other factors, for example business.

This is because the business and investment climate in Singapore is very attractive.

“In addition, legal certainty is also good, far better compared to in Indonesia,” he said.

Sofjan Wanandi, Head of Indonesia Entrepreneurs Association, made similar comments.

A lot of Indonesians save their money in Singapore because the investment climate is extremely interesting.

The country’s government provides facilities including tax and business credit allowances.

“Singapore also provides legal certainty to investors.”

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