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Arms deals buoy Russian-ASEAN
trade
By Sergei Blagov
MOSCOW
- Russia has been keen to join in Asia-Pacific economic
integration so as to capitalize on vast resources in the
Far East. Yet when it comes to actual deal-making,
Russian trade with Southeast Asian nations remain
dominated by arms deals, including sales of aircraft.
As President Megawati Sukarnoputri met her
Russian counterpart Vladimir Putin on Monday in the
Kremlin, they signed a bilateral declaration that
included a muted criticism of the United States. The two
nations pledged "to strengthen the central role of the
UN and prioritize principles of international law such
as respect for national sovereignty, territorial
integrity, non-interference in internal affairs",
according to the declaration. As Indonesia and Russia
have opposed the US-led war on Iraq, a talk of
international law took a somewhat anti-US coloration.
Moscow and Jakarta advocate "political and
diplomatic methods to solve international issues", as
well as a bigger United Nations role in solving
international crises, Putin confirmed after the talks.
"The Indonesian government is now working to strengthen
world peace," Putin said, adding that he had accepted an
invitation to visit Jakarta, according to the Russian
Information Agency (RIA).
Russia and Indonesia
signed an intergovernmental agreement on military
cooperation, as well as a memorandum of understanding on
space-research cooperation. Megawati's five-day visit to
Moscow from Sunday to Thursday, the first by an
Indonesian leader since Suharto visited in 1989, was
widely expected to focus on arms sales.
Megawati's father and founding president Sukarno
received Soviet military supplies in the 1950s, yet
bilateral ties came to an abrupt halt after the
anti-communist takeover by General Suharto in 1965. In
1991, however, the US Congress banned arms sales after
Indonesian troops killed hundreds of civilians in East
Timor. Hence in recent years Moscow has moved to fill
the gap.
In the wake of the 1997 Asian financial
crisis, Indonesia canceled plans to procure
Russian-built Sukhoi-30 jet fighters. Yet recently
Indonesia signed a preliminary contract with Russia's
state-owned monopoly Rosoboronexport for four Russian
Sukhoi fighter planes, two Su-27s and two Su-30s, worth
about US$100 million.
In 2002, Russia supplied
12 BTR 80-A amphibious armored vehicles to Indonesian
armed forces. Russia also sold 10,000 Kalashnikov
assault rifles and naval Mil-2 helicopters. The
Indonesian military has expressed interest in buying
more Kalashnikov rifles, helicopters, armed personnel
carriers and Mi-17 helicopters, long-range S-300
air-defense missiles and portable Igla missiles.
Military sales "may become a tugboat that tows
the relationship between the two countries", Russian
business daily Kommersant commented. However, Russia may
not really profit from these arms sales, because there
has been talk that Indonesia had proposed a
counter-trade to pay for Russian armaments.
Russian media have indicated that Russia had
also offered a floating nuclear power plant to augment
Indonesia's electricity supply, as well as to construct
a rocket and satellite launch pad in Biak, Papua.
However, these ambitious projects were not mentioned
during the talks in the Kremlin.
Moreover, on
the eve of Megawati's trip, there were hopes that Russia
would cooperate in controlling world oil output.
Indonesian Mines and Energy Minister Purnomo Yusgiantoro
reportedly said he had asked Megawati to raise the issue
of cooperating with the Organization of the Petroleum
Exporting Countries (OPEC) to control production.
Megawati and Putin were also expected to ink
agreements to give Russian companies access to
Indonesia's oil-and-gas industry. However, no concrete
oil-and-gas deals were announced and there was no
mention of OPEC-related issues, at least officially.
Meanwhile, Russia and Indonesia pledged to
increase bilateral trade. Russian Foreign Ministry
spokesman Alexander Yakovenko stated that Moscow
believes there are favorable conditions for boosting
ties with Indonesia, notably trade, as well as military
cooperation.
According to official Russian
statistics, trade between Indonesia and Russia increased
to $203.5 million in 2001, the last year for which
statistics are available. However, Russian officials
conceded that within the past five years an average
figure of annual bilateral trade was a mere $120
million. Once again, Moscow seemingly hopes to boost
trade with an Asian counterpart by increasing arms
sales.
Likewise, the Kremlin conceded that trade
with all Association of Southeast Asian Nations (ASEAN)
states was still low and officials have long urged a
boost in trade. For instance, last year Russian trade
with Thailand barely exceeded $400 million. In 2001,
bilateral trade between Malaysia and Russia reached $422
million.
Even Russia's trade with Vietnam has
dropped to a level close to Russia's trade turnover with
other ASEAN nations. In 2001, Russia exported $360
million worth of goods to Vietnam, while Vietnam sold
$190 million of merchandise to Russia.
When Thai
Prime Minister Thaksin Shinawatra traveled to Russia
last October, it was disclosed that the Thai government
planned to invite Putin to pay an official visit to
Thailand in October this year to attend the summit of
leaders of the Asia Pacific Economic Cooperation (APEC)
forum.
The Kremlin has long pledged to
prioritize its APEC policy and develop economic
relations with the Asia-Pacific region. However, it
remains to be seen whether official pronouncements are
going to be accompanied by an actual increase in
non-military trade.
(©2003 Asia Times Online Co,
Ltd. All rights reserved. Please contact content@atimes.com
for information on our sales and syndication policies.)
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