Diplomatic opening potentially easing Indonesia–Singapore tensions

Renewed high-level communication, moderating voices in Jakarta, and parallel investigations into corporate responsibility for haze have opened a path to easing Indonesia–Singapore tensions. Sustained improvement depends on Prabowo’s direction, while domestic energy priorities could continue to shape export decisions even if relations improve.

Key developments

Last week, the bilateral dispute expanded beyond haze and gas into broader economic and strategic relations:

Energy: Energy Minister Bahlil Lahadalia announced plans to reduce reliance on Singapore for gasoline imports, reconsider electricity exports, citing domestic needs and Singapore’s conduct, and suggested that some Indonesian LNG sold to Singapore is resold to third countries
Tourism: Vice Hajj Minister Dahnil urged pilgrims to avoid Singapore transit, citing economic sovereignty
Digital Connectivity: Digital Minister Meutya highlighted Singapore’s dependence on Indonesia’s market and cable routes, rebutting former Singapore MP Calvin Cheng’s suggestion about cutting Indonesia’s internet access
Financial Relations: Former Trade Minister Lutfi accused Singapore of profiting from Indonesian resources, urging a review of unfavorable bilateral agreements

These interventions appear aimed at burnishing nationalist credentials, appealing to Indonesia’s sensitivities toward Singapore, and scoring domestic political points. The ASEAN Secretary-General’s warning that prolonged tensions could affect regional energy cooperation underscores the dispute’s wider significance.

However, other senior Indonesian figures have sought to ease tensions: Vice DPR Speaker Dasco urged concrete, verifiable action on haze rather than polemics, stressing that countries cannot choose their neighbours but can choose how they engage with them. Investment Minister Rosan said Singapore remained open to investing in Indonesia and that its scrutiny of companies potentially linked to the fires would not affect relations.

Singapore moves to de-escalate at the top

Singapore is intensifying its conciliatory diplomacy, suggesting a possible turning point. Foreign Minister (FM) Vivian Balakrishnan and Minister of State Zhulkarnain Abdul Rahim began a Jakarta visit on 27 October, holding substantive discussions with Indonesia’s Foreign Ministry, Indonesia’s Ministry of Finance, President Prabowo, and Danantara.

Informed sources say Singapore is giving Jakarta room to de-escalate by reaffirming respect for its sovereignty and allowing Indonesia to lead joint initiatives; it recognizes the domestic drivers of Indonesia’s rhetoric and has, for the most part, not responded in kind. This accommodates Indonesia’s sensitivities while maintaining Singapore’s position on contractual obligations and haze enforcement. President Prabowo’s decision to receive FM Vivian at his private residence in Hambalang on 28 October is especially significant given ASEAN leaders’ limited access to him. Sources described the meeting as less than ideal but said it re-established communication at the highest level.

Corporate targets become the shared off-ramp for both Indonesia and Singapore

In parallel, Singapore has intensified scrutiny of ten Singapore-registered firms operating in Indonesia, including APP, Wilmar, Golden Agri and First Resources. On 28 October, the day President Prabowo received FM Vivian at Hambalang, their senior representatives were summoned to a rare closed-door meeting with Deputy Prime Minister Gan Kim Yong and Ministers K. Shanmugam and Grace Fu. Shanmugam demanded “substantive cooperation and transparency,” warning that corporate structures would not obstruct investigations. Firms must fund independent assessments and grant full access to operations, records and supply chains. Proposed Transboundary Haze Pollution Act amendments would criminalize failure to appoint or cooperate with independent assessors.

The day after, The Indonesian National Police Chief announced that it was investigating 97 companies over forest and land fires and had named 20 companies as suspects. This is a potential off-ramp: a non-state scapegoat for both capitals.

Developments to watch

The combination of the Jakarta visit and the corporate-focus pivot materially improves the prospects for containing the dispute. However, nationalist rhetoric could persist even as relations improve. Domestic energy priorities could also continue to shape Indonesia’s approach after bilateral tensions ease. The focus will remain on de-escalation or renewed tensions, particularly around energy. Prabowo’s direction, more than individual ministerial statements, will determine whether the dispute eases or escalates.