Sukhoi hullabaloo to impede trade with Russia

Sukhoi hullabaloo to impede trade with Russia

The Jakarta Post, Jakarta

The melee between the House of Representatives and the
government over the purchase of Russian Sukhoi jet fighters and
copters could hamper efforts by local businesspeople to establish
trade networks with the frontier market of Russia.

Secretary-general of the Indonesian Footwear Association,
Djimanto, told The Jakarta Post on Wednesday the polemic might
nullify the chance of Indonesian exporters to expand their market
to Russia.

"We are at risk of losing our best vehicle for establishing a
trade network with Russian businesspeople due to all this
quarreling," he said.

He said Russia, with a population of about 150 million, was a
potential new export market for Indonesian goods.

Currently, however, to reach the Russian market the exported
goods are handled by third parties in India, China and European
countries.

Djimanto said the reason for the use of third parties was the
lack of reliable payment systems and company information in
Russia.

Thus, he said, the only feasible way to learn about the market
conditions in Russia and its companies was through government-
initiated countertrade deals like the one involving the Russian
aircraft and several Indonesian commodities.

Under the deal, worth about US$192 million, Russia will
receive some 30 commodities and manufacturing products from
Indonesia in exchange for the military equipment.

The commodities include crude palm oil (CPO), textiles,
footwear, coffee, rubber, cocoa, black pepper, electrical
appliances and fishery products.

The deal was signed by the Indonesian and Russian governments
during President Megawati Soekarnoputri's visit to Russia in
April.

However, the House has charged that the purchase of the
aircraft did not follow normal procedures, as it was supervised
by the Ministry of Industry and Trade and the State Logistics
Agency (Bulog), not the Ministry of Defense.

Minister of Industry and Trade Rini M.S. Soewandi has said
there were no irregularities in the deal.

She said the purchase was based on the country's immediate
need for military equipment, and that the President had given her
the mandate to settle the deal.

The minister also said the deal was timely in that the country
was in dire need of boosting its exports by opening new markets
such as Russia.

"By creating a new market, we hope it will help increase our
exports and create new jobs," said Rini on Wednesday.

Meanwhile, the chairman of the Indonesian Employers
Association, Sofjan Wanandi, said local businesspeople were
worried the controversy would tarnish the image of Indonesia and
discourage other countries from making similar deals.

Sofjan said both the government and the House should tread
carefully because Russia could become an important export
destination due to its large population and abundant oil
resources.