RI wants closer ties with Russia

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.