Towards the end of Soeharto's rule, Indonesia focused on domestic economic problems and was unable to take a leadership role in ASEAN. When Soeharto appointed Habibie as his Vice-President, he assigned Habibie to look after foreign affairs, but when the G-15 Summit was held in Cairo in May 1998, it was Soeharto, not Habibie, who attended the meeting. When Habibie was sworn in as the President, he was preoccupied with domestic problems.
Habibie's relations with Indonesia's immediate neighbours were not cordial from the beginning of his administration. Negative comments by Senior Minister Lee Kuan Yew on Habibie's possible nomination as Vice-President in February 1998 influenced early relations with Singapore. His State Enterprise Minister, Tanri Abeng, visited the city state and complained that it was not sincere in helping Indonesia. In an interview with the Asian Wall Street Journal in early August, Habibie described Singapore as a little red dot on the map. This was the lowest point in Indonesia-Singapore relations for more than two decades.
Jakarta's relations with Kuala Lumpur also encountered difficulties. Habibie was critical of Mahathir's dismissal of Anwar Ibrahim, showing solidarity with the sacked Malaysian Deputy Prime Minister. Anwar's letter and criticism against Mahathir were published in Republika , an ICMI paper that Habibie has close links with. Habibie also cancelled a bilateral visit to Malaysia, and for a time mooted not attending the Kuala Lumpur APEC (Asia-Pacific Economic Co-operation) summit in November. He did, however, eventually attend APEC, and the December ASEAN Summit in Hanoi, showing Indonesian support for both organizations.
Indonesia-China relations remained quite cordial. When there was ethnic conflict in Indonesia in early 1998, China refrained from making any comments. On 17 February, when asked about Beijing's attitude towards the ethnic Chinese who were victims of the riots, a Chinese spokesman only noted that he believed the Indonesian Government was able to handle the situation and racial harmony would prevail. …