Indonesia Signs $1B+ Defense Credit Agreement With Russia

Kilo Class(click to view full) Russian President Vladimir Putin stopped in Indonesia to finalize a $1.2 billion defense agreement and to strengthen economic ties. Indonesia has begun buying Russian equipment, including the recent $335 million purchase of more SU-27/30 Flanker family fighters, but Defence Ministry spokesman Edy Butar Butar told Reuters that no banks had stepped forward yet to finance the deal. The Russian defense package opens a line of credit that will allow Indonesia to buy Russian military equipment during the next 15 years, something they can afford as natural resources have made Russia the world’s second-largest holder of foreign currency reserves after China. A pair of SSK Kilo Class attack submarines, 20 armored vehicles, and 15-22 helicopters are reportedly on the shopping list, as part of larger modernization efforts; meanwhile, President Yudhoyono was blunt about their other reasons for accepting: “We want to diversify the sources of our equipment. Russia is offering us a generous package, and Russia also does not attach any conditions whatsoever. Russia is all business and does not attach any political conditions and that is the way we like it, and that is why we took up the offer.” Indonesian Defence Minister (and blogger) […]