September 07, 2007	Friday	Sha'aban 24, 1428

JAKARTA, Sept 6: Indonesia and Russia inked a billion-dollar arms deal on Thursday during a visit by President Vladimir Putin that will see the world’s fourth most populous nation snare a range of Moscow-financed hardware.

Under the agreement, Russia is providing a line of credit for Jakarta to use to buy its helicopters, tanks and submarines.

The deal was among a slew of agreements, including on energy, mining and counter-terrorism, sealed during Putin’s stop in Indonesia, the first by a Russian or Soviet leader in nearly five decades.

The Russian president, accompanied by a large delegation of energy, banking and weapons industry representatives, met his Indonesian counterpart Susilo Bambang Yudhoyono for bilateral talks.

Yudhoyono told a press conference that the two nations’ defence cooperation “will be improved in order to modernise our arms and military equipment

for the navy, air force and army with a one-billion-dollar credit scheme.” The arms agreement follows Indonesia’s signing of a deal to buy six Sukhoi-30 fighter planes at a Moscow airshow last month and is seen as a move to help it reduce its dependence on US weaponry.

Military relations between Jakarta and Washington have been improving after a long period in which they were suspended because of the Indonesian military’s human rights record, but Jakarta has been pursuing a broader military strategy.

Defence minister Juwono Sudharsono, asked why Russian hardware was chosen, said that a deal with Moscow was less “politically complex” than with other nations. He noted that the British had acted to stop their equipment being used by the Indonesian military during the now resolved separatist conflict in Aceh.

Kusnanto Anggoro, a political and military affairs analyst with the Centre for Strategic International Studies said the deal was “a concrete move in diversifying our sources for military equipment.” About a third of the overall amount would go on equipping the Sukhoi planes and the remainder would go towards buying 22 helicopters, 20 amphibious tanks and two submarines, he said.

Yudhoyono also said the leaders wanted to see two-way trade boosted from almost $700 million in 2006 to a billion dollars, while Russia would make a four billion dollar investment in the mining sector here.

Other deals on the table included an agreement between Indonesian state energy firm Pertamina and Russia’s Lukoil for a $1.5-billion investment in deep water oil-and-gas exploration projects.

Putin said he was “glad to say that we are very happy and satisfied with the result of this visit.” The leader later addressed the Indonesia-Russia business forum and said that Russia was “ready to help” with Indonesia’s controversial plan to build a nuclear reactor on earthquake-prone Java by 2016.

Putin was to attend a banquet before flying to Sydney for the Asia-Pacific Economic Cooperation (APEC) summit. He is then due to fly to the United Arab Emirates.

The leader’s tour is seen by analysts as part of a Kremlin strategy of expanding diplomatic influence in Asia and the Middle East.

Putin’s visit reciprocates a trip to Russia by Yudhoyono in December 2006.

Reportedly accompanying Putin was the chairman of Lukoil, Vagit Alekperov, billionaire investor Vladimir Yevtushenkov, the head of the Russian nuclear agency Rosatom, Sergei Kiriyenko, and other business leaders.—AFP