Business and diplomacy seemed to come together in the visit by the U.S. Secretary of State Condoleezza Rice to Indonesia.
The US is reaching out militarily to Indonesia after years of strained relationship ranging from human rights abuses in East Timor to Indonesian suspicions over the US War on Terror. It took a massive natural disaster to bring the two giants together after the US undertook a huge and generous military relief operation (perhaps the largest by any state) to help victims of the Boxing Day tsunami that wiped out 168,000 Indonesians in one quick stroke.
Since then, the US has not stopped at its generosity, diplomacy and outreach, providing military training, various forms of diplomatic exchanges, military aid, maritime capacity-building to help Indonesia cope with its internationally well-known problems with piracy and disaster aid to cope with future crises. President Susilo Bambang Yudhoyono has also paid his respects to the White House in a summit in May 2005 when it was stressed the two countries should have closer relationship.
The US stands to gain big from this warming of relations. Indonesia has begun to initiate the purchase and upgrading of parts for its state-of-the-art F-16 jet fighters. However, while the decision by the US to allow Indonesia to pick up offensive weapons in addition to defensive weapons, Indonesia can only start off with transport planes first because of its highly-limited budget and the fact that US weapons are the most sophisticated and correspondingly costliest in the world. Indonesia will also be making big purchases for its two squadrons of Hercules airlifter aircraft, especially in engine parts and other military materiel. The Indonesian government has only been granted funds by the House of Representatives up to USD1.3 billion up till 2009, a modest budget by defense standards.
Indonesia is also relying on other sources of weaponry, including the Chinese and the Russians to upgrade its military with what little it can afford. Russian Sukhois for example will continue to be procured alongside the F-16 parts. Indonesia intends to get another 6 to make their total number of Sukhois ten in order to balance their Russian weapons diplomacy with that of the US. Even the Hercules will have to fight hard with the Russian Antonov 12s and Ilyusin 76s for future orders. There is also a third option of Chinese arms lurking in the background.
At the same time, the Indonesian government is considering what some may opine as the non-realistic option of producing their own weapons. The Indonesian domestic aircraft program itself ended in dismal failure under the Habibie administration. Those in favor of this program stressed self-dependency and tailoring the weapons to Indonesian conditions. 10 strategic state firms, the Ministry of Defense, the Indonesian Military (TNI) and the Office of State Minister of State Enterprises are involved in this national project which includes reviving and propagating the deteriorating state aircraft-maker PT Dirgantara Indonesia (DI) based inBandung which alone requires an estimated US$200 million just to fully resume production.
They also want to strengthen the research base of the 10 strategic firms and the government agencies. Amongst the state companies, PT DI, Army weaponry firm PT Pindad, state explosives supplier PT Dahana, state steel producer PT Krakatau Steel, state ship builder PT PAL, state telecommunications equipment producer PT INTI and state train builder PT INKA are said to be involved. Perhaps more than the research base, the Indonesian government may have to first settle a bigger issue of combating massive uncontrolled corruption within its own state firms first.
This sentiment seemed to be echoed by hundreds of Bandung university students accompanying President Susilo’s visit to the aircraft maker and the other state firm PT Pindad. They demonstrated nosily against corruption and argued for the reduction of oil prices. President Susilo had to meet these student representatives to hear their grievances complaints and tried to explain and placate them by detailing the massive problems of all sorts that the government was facing. Related to these issues, the Indonesians may have to ensure that US aid need to be used efficiently, Russian/Chinese parts bought with transparency and its own weapons program actually gets off the ground. A tough order for the state at this point of time. Indonesia will for now play a balance game between big power weapons suppliers until it can get its house in order.
* Air Force Chief: F-16, Sukhoi Programs Jointly Implemented (Antara, Jan 3)
* Rice to visit Indonesia, Australia (The Jakarta Post, Jan 4)
* Rice to visit Indonesia and Australia (CNA, Jan 4)
* State firms back defense industry (The Jakarta Post, Jan 4)