reement that Jakarta hopes will help it prosecute fugitive business executives. The treaty signed on the resort island of Bali covers 31 crimes -- including corruption, banking offenses and terrorism as well as its funding, an Indonesian statement said.
Indonesian President Susilo Bambang Yudhoyono and Singapore Prime Minister Lee Hsien Loong witnessed the signing that took place in a sprawling, Balinese-style palace. The treaty has to be ratified by parliaments in both nations.
Indonesia had long sought an extradition treaty with Singapore because of its concerns that some Indonesians, for example those who owed money to the authorities following the 1997-98 financial crisis, had taken refuge in the neighboring city state.
The new treaty applies retroactively to cover crimes that took place 15 years earlier.
Singapore is home to a large number of wealthy Indonesians. They are key players in the property market and big business for private banks.
One third of Singapore's high net-worth investors -- those with net financial assets of more than US$1 million -- are of Indonesian origin, Merrill Lynch and Capgemini said in a report, adding that of these 18,000 have total assets of $87 billion.
Environmentalists also allege that funds from massive illegal logging in Indonesia have been transferred to Singapore.
Singapore, which is keen to develop its banking sector and attract high-net worth indivuals, insists it has strict money laundering laws to curb such economic crimes.
In February, Jakarta banned exports of sand to Singapore on the grounds that sand quarrying had damaged the environment.
But some saw the move as a way to pressure the city state to sign the extradition treaty.
The two countries also signed a defense cooperation pact which Singapore described as a mutually beneficial agreement that will strengthen security ties between the two countries.
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