Publication: Monitor Volume: 3 Issue: 164

The pending sale of twelve Su-30 fighters and eight Mi-17 helicopters to Indonesia looks like another coup for Russian arms exporters, but the Indonesians are apparently driving a hard bargain. Russian deputy prime minister Yakov Urinson and Indonesia’s national development planning minister, Ginangar Kartasasmita, reportedly signed a protocol of intent for the sale early last week. It was said to be worth some $500 million.

Russia has been aiming to get more hard currency and fewer barter products for its foreign arms sale. During a press conference following the recent restructuring of Russia’s arms export establishment, Urinson stressed this point. "We want to sell our military hardware," he said, "and we want to get paid in cash." Kartasasmita disclosed that Indonesia would indeed pay for the aircraft in dollars, but that the Russians had finally agreed to a 100 percent counter-purchase scheme by which they will in turn pay in dollars for an equal value of Indonesian products, including raw materials, food, and manufactured goods. He said that the final price for the deal had not yet been agreed.

More tough negotiating probably lies ahead before a final contract is signed. For one thing, Kartasasmita indicated that the Indonesians wanted the deal to include some "technical additions." One of these involves conversion of the Su-30s from twin-seat to single-seat fighters — a major redesign effort. Eventual agreement is fairly certain, however, as neither side wants the deal to slip away. (Western media, September 4; August 25)

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