Sukhoi deal is betrayal of 'reformasi'

Rizal Ramli, Former Coordinating Minister for the Economy, Jakarta

I agree wholeheartedly that the Indonesian Military (TNI) is in great need of improvements and additions to existing military equipment, primarily to contain social unrest and separatist movements like those in Maluku, Ambon and Aceh. The priority must be on acquiring military hardware needed to control local insurgencies. Efforts to diversify sources of supply are to be welcomed, since in the past the dependence upon one country for military equipment has left us vulnerable to interference in our domestic social and political affairs.

The TNI is indeed in great need of new equipment. The main priority must be for equipment to control insurgences and not preparations against regional threats. Additional Hercules-type transport aircraft like the Antonov 12 or the Antonov 26 are needed to increase troop mobility to control unrest in conflict areas. Aside from transport aircraft, other priorities for the TNI include transport helicopters such as the MI-8T, the MI-8 cargo helicopter, and Apache-type helicopter gunships such as the Kamov-50, MI-24 or MI-35.

The priority on transport aircraft and helicopter gunships reflects that fact that Indonesia is not threatened by regional conflict in the short term.

These worthwhile objectives have been used as cover for short- term interests, illegal activities, contravention of the division of authority between ministries and of fiscal procedures, misuse of food stabilization funds, waste of government money, and potential corruption, collusion and nepotism resulting in losses to the state.

For the worse, acquisition of Sukhoi-30MKs and Sukhoi-27SKs are not a priority for Indonesia because the Sukhoi-30MK can achieve the very high speeds of mach 2.6 (2.6 times the speed of sound) and is therefore most useful against regional military threats. Moreover, the purchase of four aircraft would not constitute an effective fighting force and therefore would not deter potential aggressors in the region.

Even worse, buying four units of different types (Sukhoi-30MKs and Sukhoi-27SKs) is very inefficient because the two aircraft require different spare parts and maintenance regimes.

We must conclude that the motive for buying the Sukhoi aircraft is unrelated to strategic concerns and national defense for the following reasons: * Procurement of fighter planes must be based on standard Ministry of Defense procedures. * The purchase of just four Sukhoi jets has clearly been dominated by commercial arguments rather than the needs of the national defense system. Normally, sophisticated fighters of the Sukhoi class would be acquired in formations of one or two squadrons. Deployment of this equipment at squadron strength would represent an effective deterrent against external aggressors and an improvement to the air defense capability of the Republic of Indonesia. Therefore four jets cannot fulfill the minimum requirements used to justify their purchase. * The purchase of the Sukhoi jets is inefficient because:

Sukhoi jets are deployed in battle squadrons consisting of pilots and crew, ground crew, logistical support including spare parts. Spare parts for the Sukhoi must be managed separately from spares for the Air Force's existing squadrons of F16, Hawk and F5 jets because technical specifications, operations and maintenance procedures are different in each case.

The use of Sukhoi jets in the Indonesian Air Force would also require harmonization with existing missile and radar systems. Careful reflection on this issue would reveal that the purchase of the Russian aircraft would give rise to additional costs resulting from the need to modify software as well as hardware.

The case of the purchase of the Sukhoi-30MK is similar to the purchase of the East German warships carried out by Habibie in 1994. At that time Habibie justified the purchase of the East German ships on the basis of their low cost. But in fact the ships were in such poor condition that the overhaul and maintenance costs of the equipment was extremely high. This misjudgment drained resources from the Indonesian Navy for many years.

The Sukhoi jets bought by Malaysia, for example, were equipped with full weapons systems, including missiles and the high-tech Sextan radar system built in France. At present Sukhoi jets are identified as foe by our current radar system, which was constructed by the French company Thomson. In order to deploy the Sukhoi jets, this system would have to be modified at a cost of tens of millions of US dollars. Sukhoi jets also require an engine overhaul every 1000 flight hours and engine replacement after 5,000 hours.

The purchase is also inefficient from the economic perspective when the costs of radar modifications, maintenance and spare parts are considered. All of this is a result of the fact that these negotiations were led by Minister of Industry and Trade Rini M. Suwandi who does not have the authority, knowledge and understanding of aircraft and military equipment to undertake this task.

The purchase of the Sukhoi jets was not included in the planning documents of the minister of defense or the Ministry of Defense. Even the allocation of import credits totaling US$ 241.71 million to TNI in the 2003 budget drawn up by National Development Planning Agency (Bappenas) did not include the purchase of the Russian equipment. Nor did the purchase appear in the Air Force's plans to the year 2004, which totals Rp 5 trillion.

The major responsibility of National Logistics Agency (Bulog) is to maintain food price stability, most importantly the stability of rice prices. In executing this function, Bulog sells rice from its stocks to stabilize market prices and buys rice from farmers to defend the government's floor price. To carry out these market operations, Bulog is allocated a special budget for food security. During the New Order, the agency was often used as a milk cow by those in power.

Under President Megawati Soekarnuputri, the agency is again involved in the regulated trade of the sugar industry and the purchase of military equipment including the Sukhoi jets. It is clear that Bulog has once again become a tool of the politically powerful.

The need to upgrade the equipment of the TNI and in particular the need for new aircraft is indeed important. But procurement must be based on the planning mechanisms already in place in the TNI and the Ministry of Defense. Once the defense authorities have established their priorities, the plans must then meet with the approval of Bappenas and the Ministry of Finance. Only then are the plans ready for submission to parliament as part of the national budget.

These standard procedures were ignored by the government. The argument that the purchase of Russian military equipment, including the Sukhoi jets, will be conducted by way of counter- trade, and therefore will not impose a huge burden on the budget, is not valid.

This patchwork counter-trade proposal could result in huge losses to the state because all of the price risk associated with the purchase of the commodities involved, and their valuation at the time of sale, will be carried by the state budget.

The violation of existing laws, the misuse of ministerial authority, the violation of budget procedures, the misuse of food stabilization funds and the waste of government resources through the patchwork counter-trade mechanism also suggests a disturbing case of corruption, collusion and nepotism that represents a betrayal of the nation's farmers and of the goals of reformasi.

The above article is testimony of Dr. Rizal Ramli, former Coordinating Minister for the Economy at SUKHOI Working Group, Commission I of the House of Representatives, July 7, 2003.