Jokowi, along with First Lady Iriana, accompanied Lee and wife Ho Ching as they tried their hand at crafting batik in the Central Java capital of Semarang on Monday.

Batik diplomacy appeared to be the icebreaker of the meeting between the leaders, in which they discussed an array of issues in the 50-year relations of the neighboring countries.

Economic cooperation, counterterrorism and containment of transboundary haze pollution, which affects Indonesia, Singapore and the region, were among issues discussed by the two leaders in the first retreat meeting of its kind.

The launch of the Kendal Industrial Park on the outskirts of Semarang, a joint venture between the two countries, is the most significant industrial collaboration since the 1990s, when what is now the Batam, Bintan and Karimun Free Trade Zone began.

Developed in one of the most populous areas of the country, the project will link foreign investors to existing domestic supply chains. This could have positive knock-on effects for Indonesia’s domestic economy and spur development outside Jakarta, as the zone will house many labor-intensive industries.

Jokowi cited the zone as the “new icon” in bilateral ties, while Prime Minister Lee attributed it as a winwin outcome displaying “what the two countries can do by working together for the long-term benefit of our people”.

Lee also said ties “are in good shape”, and reiterated commitment to expanding economic relations.

Lee thanked Jokowi for Jakarta’s recent arrest of six alleged members of the Islamic State (IS) movement in Batam, Riau Islands, who allegedly planned to attack Singapore by launching a rocket from the island.

“And I look forward to making our cooperation on counterterrorism closer and deeper in many areas,” Lee said.

While Jokowi did not elaborate further on the issue, he mentioned upgrading information exchange in counterterrorism efforts.

Lee also thanked Jokowi for Indonesia’s efforts in tackling the haze pollution problem, a thorny issue that has put bilateral ties on a roller coaster.

“Because this year’s handling [of the haze problem] has been more organized with stern law enforcement, Singapore appreciates our measures,” said Jokowi.

Lee and Jokowi announced that Singapore would host the next leaders retreat, and both sides would celebrate in 2017 the 50th anniversary of the establishment of diplomatic relations to showcase the depth of the warm bilateral ties that have developed over the last 50 years.

Singapore has been Indonesia’s biggest investor for the last two years, with investment amounting to US$5.9 billion in 2015, and $7.1 billion for the first nine months of 2016.

During the meeting, Indonesia and Singapore signed memorandums of understanding (MoUs) on cooperation in the field of tourism to promote an even bigger flow of tourists between Singapore and Indonesia.

The leaders also discussed the possibility of Singaporean companies cooperating with Indonesian companies in the energy sector and expanding cooperation in new sectors, including the digital economy.

An MoU was signed between International Enterprise Singapore and Makassar municipality in South Sulawesi to promote Makassar’s development through Smart City solutions and technology.

Microsoft and Liquid Pay plan to set up a presence in Batam to catalyze the development of a digital ecosystem and to explore the development of a data center in Batam. The leaders noted that an MoU between Temasek Polytechnic and the Batam State Polytechnic would also help develop a skilled talent pool to meet IT companies’ needs in Batam.

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