Jakarta Offers Moscow Rubber for Fighter Jets

Sukhoi Su-35 fighter jet.

Jakarta, MINA – Indonesia’s defense and trade ministries on Tuesday said they plan to export rubber and other commodities to Russia help pay for 11 Russian Sukhoi jets worth a total of $1.1 billion.

The announcement follows a memorandum of understanding signed between Indonesian and Russian state-owned companies in Moscow earlier in August. On Tuesday, Indonesian Defense Minister Ryamizard Ryacudu was quoted by asia.nikkei.com as saying that his country agreed to pay half of the total, or $570 million, in the form of commodities.

But he added that the exact type of goods, their prices and the transaction method are still being discussed and that negotiations are set to continue until October. While Russia wants rubber, Indonesia has offered a variety of other goods as well, including palm oil, coffee, tea and furniture. Indonesia appointed state-owned trading company Perusahaan Perdagangan Indonesia (PPI) to handle the transactions.

Indonesia is looking to boost its defense capabilities amid rising tensions surrounding the South China Sea. The resource-rich country also wants to ramp up agricultural exports to accelerate its economic growth.

It is already one of the top exporters of rubber, palm oil and coffee, but Trade Minister Enggartiasto Lukita said trade with Russia is “very low compared to its potential.”

“The opportunity is now very open because Russia is facing a trade embargo from the U.S., the European Union and their allies over security and territorial issues,” Lukita said.

The trade agreement also requires Russia to allocate 35% of the project’s value toward supporting the transfer of technology to Indonesia in such forms as appointing local companies to develop maintenance centers or supply spare parts.

Indonesia may still end up paying the full amount in cash and exporting $570 million worth of commodities separately. Some previous deals with Russian companies have faced roadblocks after an initial agreement, such as an oil refinery project involving Russia’s Rosneft and Indonesia’s Pertamina. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)