The Jakarta Globe carried a story on Sep 22 where a top minister called for cuts in Indonesia's natural gas exports to Singapore, claiming that such exports were excessive and that the gas was needed for domestic use.
While I have no doubt about the ever-increasing domestic demand for natural gas in Indonesia, it is interesting to note that Singapore has been singled out even though countries such as Japan and South Korea take larger volumes of the country's gas exports in the form of LNG.
What this illustrates is that because Singapore is small, we are naturally taken as being 'easy to bully'.
As I have written repeatedly on this blog, we are moving into an era of resources nationalism, where countries with good resource endowments want to use them to gain leverage over others that are dependent on such imports. In such an era, Singapore's power relative to its resource rich neighbours will be weakened, and so we can expect more 'bullying' from them in the coming years.
Given the risks to our natural gas imports, which is used to generate electricity, we need a coherent plan to reduce reliance on imports to the greatest extent possible, even though we will always need to import. But so far, we haven't got a plan.
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