MR Goh Chok Tong must be wishing for a better 10th anniversary as Prime Minister of Singapore.

Mr Goh and his fellow ministers are generally quick to congratulate themselves for the economic stability and sustained growth delivered under their administration.

However, the ethnic Chinese-dominated city state's vulnerability to the volatile economies and erratic behaviour of other Southeast Asian political leaders remains critical to the shaping of domestic and international policy.

Comments about Singapore by Indonesian President Mr Abdurrahman Wahid after last week's Association of Southeast Asian Nations summit in Singapore exemplified these issues. Mr Wahid's criticisms of Singapore are, according to unnamed Indonesian diplomats quoted in local media, attributable to the Indonesian leader's frustration at Singapore's intransigence on a range of issues.

Mr Wahid was quoted as saying Singapore was "just looking for profits" in dealing with Indonesia and accusing Singaporeans of "despising" Malays.

The issue publicly claimed to be attracting most of Mr Wahid's ire is Singapore's failure to support his proposal to include East Timor and Papua New Guinea in ASEAN.

However, Mr Wahid is believed to be frustrated over a range of bilateral issues, including a failure to agree on an extradition treaty allowing Indonesia to retrieve so-called "economic criminals" who take refuge in Singapore, and Singapore's recent refusal to co-operate in Jakarta's efforts to eliminate speculative trading in the rupiah.

While Mr Wahid is notorious both for what one experienced analyst termed "a very slender grasp of the art of statesmanship" and the tenuous nature of his grip on power, the underlying tensions between Singapore and Indonesia remain very real.

The analyst, who declined to be named, noted that "while a change of administration in Indonesia may change the way these issues are addressed, it won't change the nature of the intent".

The government was careful to issue a response on Wednesday that targeted the substance of Mr Wahid's remarks rather than the embattled President himself.

The response, issued by Mr Goh's press secretary, Mr Ong Keng Yong, addressed the substance of each comment except, significantly, Mr Wahid's remark that he had discussed with Malaysian Prime Minister Dr Mahathir Mohamad the possibility of restricting Singapore's water supply.

The government-linked Straits Times newspaper, however, took the gloves off, describing Mr Wahid's outburst as "unjustified and underhand" and categorised his comments regarding the water supply as "the ultimate indiscretion".

The analyst said regional tensions were exemplified by the fact that "there is no effort to co-ordinate industrial planning across Southeast Asia", with Malaysia in particular seeking to replicate rather than complement the success of Singapore's manufacturing and service industries.

Indonesia is also extremely conscious of Singapore's economic well-being relative to its own. Mr Goh's announcement in January of a $US500 million fund for Singaporean government-linked companies to invest in Indonesia and a $US400 million lending facility for private companies to invest in Indonesia's economy met with a hostile response. Some Indonesian leaders viewed the announcement as designed to allow Singaporean companies to pick up Indonesian assets at low prices.

Mr Wahid's comments are the latest in a long line of comments from Indonesian leaders deriding Singapore - Mr Wahid's predecessor, B. J. Habibie, once described the island as "that unfriendly little red dot".

Mr Goh must also be extremely aware of the domestic factors influencing the comments of the leaders of both Singapore and Malaysia..

Both Mr Wahid and Dr Mahathir are under heavy fire politically - Mr Wahid is on the verge of being deposed, while Dr Mahathir's embattled Barisan Nasional this week lost a crucial election in his home state.

With a range of indicators pointing to a looming decline in Southeast Asian economies, the temptation remains for the leaders - and their prospective replacements - to publicly lambast Singapore as a way of deflecting attention from local woes.

Compounding that is the simmering racial issue - ethnic Chinese, who dominate Singapore, are a wealthy minority in Indonesia and frequently subject to racial prejudice and violence during riots there.

Mr Wahid's comments overshadowed several articles in the local media lauding the 10th anniversary of the 59-year-old Mr Goh's ascent to power in November 1990.

Mr Goh's People's Action Party next faces parliamentary elections in August 2002 and is widely expected to comfortably retain government. However, Mr Goh is not expected to hand over the reins of power until some time after that election, with the most likely successor being his deputy, Brigadier General Lee Hsien Loong, the elder son of former Singaporean strongman Mr Lee Kuan Yew.

On the domestic front, there is growing tension over the policy of high salaries for ministers and senior officials as the divide widens between Singapore's rich and poor. The divide is nowhere more apparent than around the opulent Raffles Hotel, where dilapidated and often burnt-out shop-houses provide a jarring contrast to the clean lines of the renovated, boutique-stuffed landmark.

At present, the top 20 per cent of the population earn on average about 18 times the amount earned by the bottom 20 per cent, up from 11 times in 1990.