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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

26/11/2004

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

Russian News & Infor

CATEGORY

HEADLINE

RUSSIAN FIGHTERS FOR INDONESIAN PALM OIL
MOSCOW, November 25 (RIA Novosti) - Russia could sell eight Su-30 fightersto Indonesia before the end of the year. The $250 million contract will bepaid for mostly in commodities like palm oil.

Yesterday at the Indo Defense 2004 arms expo in Indonesia, one ofIndonesia's military leaders, General Sudrajat Haqim, said Indonesia couldpurchase eight Su fighters.

Vedomosti's sources in Rosoboronexport and Sukhoi confirmed thisinformation. According to them, Rosoboronexport, the state arms exportintermediary, is going to conclude a contract for eight Su-30MK warplanesbefore the end of 2004. Aside from the United States' ban on armsshipments to Indonesia in 1999, which has left American fighter planesA-4, F-5 and F-16 in need of spare parts, Rosoboronexport said Indonesia'sdecision was motivated by the moderate price and quality of Russianequipment. The contract will be paid for in palm oil and other goods, theRosoboronexport source said.

In last year's $192 million contract with Indonesia, palm oil and otherbarter transactions were a major part of the payment. Russia was only paid$26 million in cash, said Konstantin Makienko, an expert at the Strategiesand Technologies Analytical Center. This arrangement was profitable forRussia because Rosoboronexport quickly sold the most of its stock toRussian and foreign producers. According to Mr. Makienko, Indonesia willpay at least $250 million for the eight Su-30 fighters.

Marat Kenzhetaev, an expert at the Disarmament Problems Studies Center,said in Southeast Asia, 12 Su-27/30 fighters were in use in Vietnam andthat in 2006, 18 Su-30s are expected to be delivered to Malaysia. ThreeSoutheast Asian countries with the same type of planes will make theplane's post-sale servicing easier. Post-sale servicing is usually verydifficult for Russian exporters.

In 2000 Indonesia bought 12 BTR-80 armored personnel carriers, 16 Mi-2 and4 Mi-8 helicopters, 9,000 Kalashnikov submachine guns and ammunition fromRussia. In 2003, a $192 million contract for the two Su-27, two Su-30fighters and two Mi-35 helicopters was concluded.

Talks with Indonesia about the purchase of Su-27/30 fighters began in1997, which would have made Indonesia the first Southeast Asian country topurchase these types of planes. The economic crisis in Asia halted theseplans. In the fall of 2004, President Susilo Bambang Yudhoyono and Russiansuppliers feared Indonesia would not continue cooperation. This has nothappened.