Indonesia, India sign defense agreement

Indonesia, India sign defense agreement

JAKARTA (JP): Indonesia and India on Thursday signed a defense
agreement aimed at boosting various areas of cooperation
including the exchange of military instructors and arms sales.

The agreement signed by Indonesian defense minister Mahfud MD
and the Indian Minister of State for External Affairs Ajit Kumar
Panja was witnessed by President Abdurrahman Wahid and the Indian
Prime Minister Atal Bihari Vajpayee at Merdeka Palace.

Mahfud later told journalists that the agreement is not a
defense pact.

"It is a cooperation in defense activities, so it isn't a
defense pact," he said.

When asked who would likely be the primary purchaser of arms
between the two, Mahfud replied: "Quite honestly, we would
probably be buying more from them."

India is one of the world's leading arms producers.

Indonesia in the past few years has been in great need of
replenishing its arms stock, particularly since the United States
imposed an arms embargo.

The Indian Prime Minister arrived in Jakarta on Wednesday,
becoming the first Indian prime minister to visit Indonesia in 14
years.

On Friday he will fly to the holiday resort island of Bali
before heading home on Sunday.

In a joint press conference held by the two leaders,
Abdurrahman stressed the long-standing relationship between the
two countries and the bright prospects ahead.

"As neighbors, we have many things in common, especially in
politics. Therefore, we have to share our experiences to able to
face future challenges," said Abdurrahman who visited India early
last year.

Vajpayee said that Indonesia and India need to further explore
their potentials.

"We've agreed that both leaders should meet regularly,"
Vajpayee said.

Business

Later in the afternoon, Memorandums of Understanding (MoUs)
were signed to further promote economic relations between the two
countries.

The MoU's were signed during a business luncheon hosted by the
Indonesian Chamber of Commerce and Industry (Kadin) in honor of
Prime Minister Vajpayee.

The agreements cover cooperation in information technology,
the construction of a sugar mill, the development of offshore oil
rigs and oil and gas drilling.

Indonesian Chamber of Commerce and Industry chairman Aburizal
Bakrie signed an agreement in the information technology sector
with the president of the Federation of Indian Chambers of
Commerce and Industry (FICCI), Chirayu R. Amin.

PT Aditya Indo Mitra Niaga and the Indian Sugar and General
Engineering Corporation (ISGEC) signed an agreement to build a
sugar mill in Lampung, while India's Shiv Vani Universal Ltd. and
Indonesia's PT Gunanusa Utama Fabricators agreed to cooperate in
the construction of offshore oil rigs in India.

Shiv Vani also agreed to cooperate with PT Gemilang
Technodrill Paripurna in the development of oil and gas drilling
projects in Indonesia and with PT Shillelagh Marine Construction
for the marketing of its offshore oil drilling equipment in
India, the Middle East, and Iran.

Indonesian Minister of Industry and Trade Luhut Binsar
Panjaitan who witnessed the signing said the cooperation between
Indonesia and India was very promising.

He said cooperation in the information technology field was
especially promising as India's information technology industry
is quite advanced.

Luhut said India currently was holding 60 percent of the
world's software market, and if Indonesia hoped to gain at least
5 percent of the market in six years, it would have to learn from
India's experience.

India's Minister of State for Commerce and Industry Omar
Abdullah hoped the business people of both countries would be
able to resolve problems that stand in the way of business
cooperation for the sake of strengthening bilateral economic
ties.

Bilateral trade between the two countries totaled US$1.2
billion in 1999, and about $1.6 billion in 2000.

According to the Indonesian Central Bureau of Statistics
(BPS), Indonesia's exports to India totaled $923.9 million in
1999, while imports totaled $275.5 million during the same
period.

Indonesian exports to India include vegetable fats and oils,
petroleum products, coal, copper ore, fruits and nuts, textile
yarn, hydrocarbon, pulp and waste paper, glass, and spices.

Imports from India include animals fodder, steel, aluminum,
synthetic fiber, electrical appliances, and pharmaceutical
products. (tnt/hdn/dja)