Dino Rejects Singapore Conspiracy Claims as Prabowo Responds to MSCI

JAKARTA— Jakartaweekly.com Former Indonesian Deputy Foreign Minister Dino Patti Djalal has rejected claims that Singapore is conspiring to undermine Indonesia’s capital market and economy through Morgan Stanley Capital International (MSCI), calling the allegations illogical and inconsistent with the realities of bilateral relations.

In a statement published on his official Instagram account on Thursday, Dino argued that portraying Singapore as deliberately attempting to destabilise Indonesia or acquire Indonesian assets at discounted prices was far removed from the two countries’ actual relationship.

“The view circulating recently that Singapore is conspiring to bring down Indonesia’s capital market, sabotage the Indonesian economy and use MSCI to acquire Indonesian assets in a fire sale is illogical and far from reality,” Dino said.

Dino, who previously served as Indonesia’s ambassador to the United States, emphasised that Singapore has long been an important partner for Indonesia, with cooperation spanning disaster response, investment, education, infrastructure and defence.

He cited Singapore’s assistance during the 2004 tsunami, earthquakes, the Asian financial crisis and the COVID-19 pandemic, as well as cooperation on development projects in Batam, Bintan, Karimun and Kendal, Central Java.

According to Dino, Singapore also has a direct interest in Indonesia’s political and economic stability because developments in its much larger neighbouring country can affect Singapore itself.

He warned that treating Singapore as an adversary could undermine a bilateral relationship built through decades of cooperation.

Temasek and GIC Deny Lutfi’s Allegations

Dino’s remarks follow allegations by former Indonesian Trade Minister Muhammad Lutfi that Singapore’s two major state-linked investment institutions, Temasek and GIC, helped instigate Indonesia’s recent stock market decline through efforts involving MSCI.

According to Bloomberg, both institutions denied the allegations. Temasek rejected claims that it or its employees had approached MSCI to influence decisions concerning stock exchanges in the region, while GIC also denied the accusations. GIC said its investment decisions were based on individual companies and assets rather than index classifications or broad assessments of a market. It also highlighted its long-standing investment presence in Indonesia.

Lutfi alleged that pressure on MSCI to consider downgrading Indonesia from an emerging market to a standalone market could trigger panic selling and allow foreign investors to acquire Indonesian assets at lower prices. The allegations have not been established as fact, and the denials by Temasek and GIC are central to the dispute.

MSCI’s concerns have focused on issues including shareholding transparency, investability and the reliability of Indonesian equity market data. The debate has intensified scrutiny of Indonesia’s capital market governance and investor confidence.

The controversy comes amid volatility in Indonesian equities and concerns about the potential consequences of a change in the country’s market classification. However, market movements alone do not establish that Singaporean institutions orchestrated the decline.

Prabowo Says Indonesia Will Not Be Intimidated

President Prabowo Subianto has also responded to the pressure surrounding MSCI, declaring that Indonesia will not be intimidated by external challenges amid turmoil in the domestic capital market.

Speaking at the opening of a plenary Cabinet meeting on Wednesday, October 21, Prabowo said his administration had been working effectively while acknowledging that the country continued to face significant challenges and difficulties.

He stressed that the government would not surrender in the face of pressure, including concerns related to MSCI and demonstrations that he described as attempts to intimidate the country.

“Various things from MSCI, various demonstrations trying to scare us. I say to MSCI, the Indonesian nation is not afraid and will not be intimidated. We are not afraid, we have courage, we are willing to sacrifice, and we will not surrender,” Prabowo said.

His remarks signal a firm political response to the market controversy. They also come as Indonesia faces questions over market transparency, investor protection and the regulatory reforms needed to maintain its standing among international investors.

Dino Urges Caution in Bilateral Relations

While Lutfi’s allegations concern the role of Singapore-linked institutions in the market turmoil, Dino warned against interpreting the situation as evidence of a broader conspiracy by Singapore to damage Indonesia’s economy.

He argued that Singapore’s political and economic interests are closely connected to regional stability. As a small country situated alongside Indonesia and Malaysia, Singapore would also be affected by serious political or economic disruption in Indonesia.

Dino said it was unacceptable for either country’s political leaders to conspire to harm the other. He encouraged Indonesia to approach disputes through measured diplomacy rather than suspicion.

He also recalled international cooperation following the 2004 Aceh and Nias tsunami as an example of how collaboration during a crisis can strengthen Indonesia’s international standing.

The exchange highlights different approaches to the controversy. Lutfi has raised allegations concerning Singapore-linked investors and MSCI, Temasek and GIC have denied involvement, Prabowo has vowed that Indonesia will not be intimidated, and Dino has urged caution against allowing the dispute to undermine bilateral relations.

With questions over market governance and investor confidence still prominent, the debate places Indonesia’s capital market reforms and its diplomatic relationship with Singapore under renewed scrutiny.