RI wants closer ties with Russia

Agencies, Jakarta

After years of fluctuating bilateral relations with Russia, President Megawati Soekarnoputri on Tuesday called for a new beginning, hoping to boost bilateral trade, which has averaged a mere US$120 million annually for the last five years.

Speaking at a Russian-Indonesian business forum in Moscow, Megawati said that Indonesia had to start from the beginning to improve relations with the former communist state.

Megawati, who arrived in the Russian capital on Sunday for a five-day visit, told the forum that "one of the main goals of my visit is the desire to help further direct contacts between our two countries in the business sphere."

Indonesia exports far more to Russia -- around $139 million worth last year -- while Russian exports to Indonesia stood at just $31 million in 2002.

"Our relations have gone through periods of ups and downs," she was quoted by RIA Novosti news agency.

She added that trade remained low, in part because of the 1997-1998 Asian financial crisis and Russia's 1998 financial meltdown.

Megawati's visit to Moscow is the first by an Indonesian head- of-state since authoritarian ruler Soeharto visited Russia in 1989.

Indonesia's founding president Sukarno, Megawati's father, built close ties with Russia in the 1950s.

Megawati signed an arms agreement with Russian President Vladimir Putin on Monday amid media reports that she was expected to seal the purchase of four Russian-made Sukhoi fighter planes worth between $100 million and $120 million.

After receiving an honorary degree from Russia's top state foreign policy university on Tuesday, Megawati toured Sukhoi's research centre and airfield outside Moscow and witnessed a test flight of the Russian aerospace firm's SU-27 jet fighters.

Since 1999, Indonesia has been under a U.S. military embargo that Washington refuses to lift until Indonesia comes clean on the military's backing of militia violence in East Timor the same year.

Minister of Industry and Trade Rini M.S. Soewandi said at the same forum that clinching the jet fighter deal "will be a great success for our countries," adding that Russia's government arms trade agency Rosoboronexport and Indonesia's State Logistics Agency (Bulog) would handle the deal.

Separately, legislators at the House of Representatives gave mixed reactions to the government's decision to purchase military equipment from Russia, as part of its efforts to diversify its arms sources.

Permadi from the Indonesian Democratic Party of Struggle (PDI Perjuangan) said the plan to purchase Sukhoi-27 and Sukhoi-30 jet fighters and Mi-35 helicopters was a bold decision.

Legislators from the Reform faction, however, urged the public to scrutinize the deal, while Reform faction chairman Ahmad Farhan Hamid and legislators Djoko Susilo and Mashadi criticized the deal for not being transparent.

They said the Sukhoi jet fighters offered to Indonesia at $35 million each was higher than the market price of between $15 million to $20 million.

"The purchase should follow standard procedures," Farhan said.

Standard procedures require that any plans to purchase military equipment should first be proposed by the Indonesian Military (TNI) to the Ministry of Defense, which would then seek approval from the House.

According to Farhan, Djoko and Mashadi, the plan to purchase military equipment from Russia had never been discussed with the House's defense commission.

The legislators also questioned the number of jet fighters to be purchased from Russia. Instead of purchasing one squadron or 12 fighters, Indonesia planned to buy two Sukhoi-27, two Sukhoi- 30 jet fighters, and two Mi-35 helicopters.

"It is unusual. This shows that the Indonesian Air Force has no good procurement strategy," he added.

A similar concern was also voiced by a deputy to the coordinating minister for the economy, Dipo Alam.

Although the military purchase would be made with a counter- trade or a joint venture scheme, Dipo suggested that the government prepare money to finance the commodities for the swap.

He warns that the government should be ready for the worst, in case the proposal for the new funding to purchase local commodities is rejected by the House.