Page 2 of 2 Indonesia-Russia: Arms, atoms
and oil By Bill Guerin
current policies in the Middle East.
President George W Bush's stopover visit here last
month was highly unpopular and sparked protests
across the country.
Nuclear
ambitions Indonesia also parts ways with
the United States' tough stand on Iran's nuclear
program. Yudhoyono has repeatedly offered to
insert himself as an honest broker between
Washington and Iran, and he has offered to play a
negotiating role in the Israel-Palestinian
conflict. At the same time, Indonesia has
expressed
interest in Russian-made
nuclear-energy technology, similar to what Moscow
has supplied to Iran and other countries. Putin
said the two countries had "considerable
opportunities" to work together on nuclear power.
Russian nuclear-energy agency Rosatom
announced plans to tender a bid to build
Indonesia's first nuclear power plant, a proposed
$1.66 billion, 1,000-megawatt facility set to be
built at Ujung Lemah Abang on the Muria Peninsula
in Central Java. Construction is set to commence
in 2010 and the facility is scheduled to be up and
running by 2017. Indonesia has long sought to
establish nuclear-energy facilities to diversify
its present reliance on fossil fuels.
Popular opposition and discovery of large
new reserves in the Natuna gas field put those
plans on hold more than a decade ago. To allay
those concerns, Indonesia has reportedly expressed
interest in the possibility of developing a
Russian-designed floating nuclear power station,
which would be the world's first such facility.
Southeast Asia is currently a
nuclear-weapons-free zone, and it's altogether
unclear how other countries in the region would
react if Indonesia went nuclear with Russian
assistance. Defense Minister Sudarsono told
reporters on December 4: "For the time being we
will not establish nuclear cooperation for defense
purposes, but only for peaceful purposes." He also
said Indonesia would focus on nuclear cooperation
with "several countries for peaceful purposes",
including the eventual development of a national
defense industry, he said.
The two sides
padded last week's blockbuster arms agreement with
other commercial initiatives, including a
government-to-government vow to double bilateral
trade quickly from $500 million to $1 billion per
year. Soon thereafter, Russia's Alfa Group, an
industrial and financial holding company,
announced plans to invest up to $2 billion in
Indonesia's telecommunications sector after a
closed-door meeting with Yudhoyono. In an apparent
related development, the two countries are
negotiating to develop jointly Indonesia's Biak
Island as a launch pad for commercial satellites.
Stronger economic ties could translate
into new philosophies surrounding Indonesia's
management of its bountiful natural resources.
Noting that Indonesia is currently the biggest
supplier of energy to Asia, Putin said: "We
believe it is extremely important to coordinate
our actions on world energy markets so that there
is no damage but instead to boost cooperation."
Russia's return to global prominence stems
largely from its immense oil and gas assets, and
Moscow has recently peeved Western countries
through plans to redirect its energy flows away
from Europe and toward Asia. Indonesia and Russia
are now set to sign an agreement for Russian
energy giants Gazprom and Lukoil to take part in
oil and gas projects in Kalimantan, the the
Indonesian section of Borneo island.
That
could open the way for Russian companies to secure
more lucrative natural-resource deals, which until
now has long been the domain of US and other
Western resource giants such as Texaco,
ExxonMobil, Unocal and Conoco. Russia has moved to
get a strategic foothold for Gazprom in the
Sakhalin-2 project, which is now 55% controlled by
Royal Dutch Shell Pcl, and is estimated to have
total reserves of about a billion barrels of oil
and 500 billion cubic meters of gas, which, once
operable, would make it one of the world's largest
combined oil and gas projects.
While many
of these bilateral deals are still at the
negotiation stage, what's certain is that Russia
is moving aggressively to re-establish its
post-Cold War stature in Southeast Asia through
closer strategic and commercial ties with
Indonesia. As those arms, energy and other
business deals are completed, the emerging
bilateral relationship promises to have a profound
impact on the region's strategic and economic
balance.
Bill Guerin, a Jakarta
correspondent for Asia Times Online since 2000,
has been in Indonesia for more than 20 years,
mostly in journalism and editorial positions. He
specializes in Indonesian political, business and
economic analysis, and currently hosts a weekly
television political talk show, Face to Face,
broadcast on two Indonesia-based satellite
channels. He can be reached at
softsell@prima.net.id.
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