Indonesian Foreign Minister Retno LP Marsudi said the treaty, which was first signed on Oct. 11, 2018, in Bali, was expected to boost two-way investment flows by between 18 percent and 22 percent over the next five years.

The treaty provides greater legal certainty to Indonesian and Singaporean investors who invest in either country by granting greater protection from discriminatory treatment and illegal expropriation, among other things.

“In this current difficult situation, the ratification of the BIT serves as an important economic boost to expedite economic recovery in the two countries,” said Retno during an online press briefing on Tuesday.

She said the deal would also help realize $200 billion worth of investment each year in the region by 2030.

Singapore remained Indonesia’s largest investor in the past five years. Last year, Singapore’s investment in Indonesia reached a record US$9.8 billion, an increase from $6.5 billion in 2019, according to data from the Investment Coordinating Board (BKPM).

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The treaty would also help Indonesia boost investment, the second-largest contributor to the country’s gross domestic product (GDP), behind household spending, as the government sought a rebound of GDP growth to around 5 percent this year. The GDP contracted 2.07 percent last year.

Singapore’s Trade and Industry Minister, Chan Chun Sing, also on Tuesday, reaffirmed that the BIT provided additional protection for investments by Indonesians and Singaporeans in each other’s countries.

He went on to say that Indonesia continued to be an attractive investment destination for Singaporean companies, as reflected in the continuous flow of investment into the Kendal Industrial Park in Central Java, the Nongsa Digital Park in Riau Islands and the Batam-Bintan-Karimun (BBK) free-trade zone.

“We are, therefore, exploring other infrastructure developments, including the development of Kendal Port. This would improve the logistical and infrastructure connectivity of the region, making it more attractive to investment,” he said.

Meanwhile, with regard to the digital economy, Chan said the Nongsa Digital Park had become a bridge for technology companies in Singapore and Indonesia since its launch in 2018 and was now home to more than 150 companies.

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The Nongsa Digital Park has expanded its operation and launched on March 2 Nongsa Digital Town, a 62-hectare area dedicated to digital economy development. The town currently houses some 1,000 digital economy workers but expects to house up to 8,000 talents for outsourcing to Singaporean companies.

“With the global shift toward online platforms and digital solutions in the wake of the pandemic, this expansion will certainly enable more tech companies in Singapore and Indonesia to find more synergies and capture the growing opportunities in the digital space,” Chan added.

He also said with regard to the BBK free-trade zone that Singapore “remains keen” to collaborate with Indonesia to reinvigorate the BBK zone by facilitating new investment opportunities.

The treaty builds on other agreements between the two countries meant to spur investment, such as the updated Avoidance of Double Taxation Agreement signed in February 2020 and the Regional Comprehensive Economic Partnership (RCEP), signed in November 2020.