Russia And Indonesia – A New Beginning

Indodefence 2008 Journal

The perils of become overly dependent on a narrow group of suppliers was brought home to Indonesia in 1999 when it found itself hit with a defence equipment supply embargo, firstly by the US and then by the European Union countries. The embargo was to last six years only being lifted at the end of 2005. For Indonesia to consequences of this embargo were severe. The Indonesian Air Force (TNI-AU) provides conclusive proof of this fact. At that time the prime combat aircraft asset of the TNI-AU was the fleet of seven Lockheed Martin F-16A Block 15 OCU and three Lockheed Martin F-16B Block 15 OCU aircraft.

By the time the embargo was lifted the F-16A/B fleet had been reduced to four flyable aircraft. The TNI-AU fleet of 20 Lockheed Martin C-130B, KC-130B, C-130H and C-130H-30 transport aircraft provides another example of the effect of the embargo, by the time the embargo was lifted, the C-130 fleet was down to some six flyable aircraft. The six year long embargo impacted on all areas of the Indonesian military and these harsh lessons demonstrated that supplier base diversity made tremendous good sense. That discovery was not rocket science.

The only problem was finding alternative suppliers across the complete spectrum of defence equipment from the high to the low end. What Indonesia needed first and foremost was a credible source of combat aircraft, helicopters, surface ships, submarines, armoured vehicles and other sophisticated equipment. In the end such a
source was found in the form of Russia. All of which was somewhat ironic, as for a period in the late 1950s and early 1960s up to 1965, the Soviet Union was the leading supplier of defence equipment to Indonesia. To put that statement into context, Soviet military aid turned the TNI into arguably one of the most significant military powers in Asia. Soviet military assistance was just enormous in scope. The TNI-Al received a Sverdlov class cruiser, seven Skory class destroyers, seven Riga class frigates, 12 Komar class missile craft along with 25 P-15 (Styx) anti-ship missiles, 14 P6 fast attack craft, eight Kronstadt class patrol craft, 18 BK patrol craft, six T-43 minesweepers, an Atrek class support ship, a Don class support ship, two Bunju class tankers and three Type 577 Uda class oilers. On top of this came 12 Project 613 Whiskey class submarines (SSK), with two more supplied from Poland. The situation as regards the supply of aircraft and helicopters was equally as impressive. Systems included 26 MiG-21F-13 aircraft plus 156 R-13S (AA-2 Atoll) air-to-air missiles, 35 MiG-19, 30 MiG-17 (ex-Czech), 40 MiG-17PF (Polish LIM-5P), 15 MiG-15UTI (ex-Czech), 18 Aero L-29 (ex-Czech), 44 Ilyushin Il-28/Il-28T/ Il-28U bombers (some ex-Czech), 24 Tupolev Tu-16 bombers plus 96 KS-1 (Kennel) air-to-surface missiles, 28 Ilyushin Il-14 transports (Czech Avia produced), nine Antonov An-12 transports, eight Mil Mi-1 (Polish SM-1 version) helicopters, 36 Mil Mi-4A/Mi-4M helicopters and eight Mil Mi-6T helicopters. As if that were not enough an S-75 Dvina (SA-2) air defence missile system along with 24 missiles was supplied, S-60 57 mm and M1939 37 mm anti-aircraft guns, 10 BRDM-1, 30 BTR-152, 100 BTR-40 and 66 BTR-50 armoured vehicles and 50 PT-76 light tanks, other tanks, K-61 amphibious transport vehicles, BM-14 140 mm multiple rocket launchers, other artillery systems and much else besides was delivered.

Soviet military aid to the TNI was, as the above listing shows, immense in scope. Yet after 1965, and the break in relations with the Soviet Union, this vast inventory of defence equipment gradually degraded in many cases to become worse than useless. Some equipment was sustainable, for example the PT-76, BTR-40, BTR-50, K-61 and the air defence guns for example. As for the remainder, some resides in museums around Indonesia and the rest was scrapped. With the collapse of the Soviet Union and the emergence of new states such as Russia from the wreckage, there was a new set of defence industry players entering the regional marketplace. However, with the exception of a few small purchases of small arms and parachutes in the 1990s, Indonesia proved less than receptive to the possibilities offered by the Russian defence industry. Arguably there was also no need from the Indonesian side to entertain purchasing Russian equipment, as it would have been incompatible with existing TNI equipment and operational practices.

Then in 1997 there appeared to be a real programme in prospect, with significant interest being shown in the acquisition of up 20 Sukhoi Su-27 combat aircraft. Eventually this potential contract collapsed for political and financial reasons, but it was an indication that Russia and Indonesia were moving closer to a supplierclient relationship.

The New Beginning

It was the embargo instituted at the end of 1999 that would really change Indonesia’s perception of Russian defence equipment. Shortly after this, talks started on the supply of defence equipment and in particular on the supply of Sukhoi combat aircraft. One of the many difficulties encountered in turning these talks into action was the fact that Indonesia had such a small defence budget, in 1999 military expenditure was only 0.9% of the Gross Domestic Product (GDP), that same year Singapore’s military expenditure as a percentage of GDP was 5.4%! In real terms Indonesia was spending less on defence in 1999 than it did in 1988.

Eventually real progress was made on the Sukhoi acquisition during the Megawati Sukarnoputri administration and in 2003 a contract was signed covering the acquisition of two Sukhoi Su-27SK and two Sukhoi Su-30MK combat aircraft and two Mi-35 attack helicopters. The value of the contract was some $195 million, of which $26 million was paid in cash and the rest in countertrade with primary commodities, including palm oil.

The aircraft and the helicopters were delivered later in 2003. Building on this first contract proved harder than expected, one significant factor being a change of government and the election of President Susilo Bambang Yudhoyono in 2004. Then at the end of 2004 came the tsunami disaster and other matters were on the mind of the Indonesian leadership. The significant development in 2005 was a decision to purchase six Mi-17B-5 helicopters from Kazan Helicopters for the TNI-AD. The first three of these were delivered to Indonesia in early July this year. Moving into 2006 there were ongoing negotiations on the acquisition of more Sukhoi aircraft, but this has become subsumed into a much larger and more complex discussion. Indonesia and Russia had started talking about an ambitious defence equipment package covering the supply of combat aircraft, helicopters, ships, submarines, armoured vehicles and other equipment. The stumbling block was funding such a programme, an issue that appeared to be resolved when the Russian side indicated that it might be willing to arrange a funding package to cover the purchases. Real progress appeared to be made in 2007. In July of that year it was an nounced that Indonesia would be purchasing Russian corvettes, in August the purchase of a second batch of Sukhoi aircraft was confirmed and then in September the then President Putin visited Jakarta. One of the key issues of the visit was settling the defence package and the financing issues surrounding it. All of these outstanding issues appeared to have been resolved and it was also stated that the second batch of Sukhoi aircraft consisting of three Su-27SKM and three Su-30MK2 would be delivered from October 2008 through to 2012. December 2007 was notable as it saw the rectification of an important deficiency in the TNI-AU Sukhoi fleet - the aircraft were delivered with no air weapons. A separate contract was required to resolve this and in December 2007, R-73 and R-27 air-to-air missiles, Kh-31P anti-radar missiles, Kh-31A anti-ship missiles and Russian iron bombs were delivered. Prior to this the only external stores available to the Sukhoi aircraft were the result of TNI-AU technicians rigging a multiple ejector rack that could accommodate NATO-standard bombs on the wing hardpoints of the aircraft. By the time all of the talking had been completed, the size of the Russian defence systems package had stabilized at 22 helicopters, 20 BMP-3F armoured vehicles and two Project 636 Kilo class submarines. This would be funded by a $1 billion line of credit arranged via Russian banks. The Sukhoi contract would not be part of this package and would be funded separately. The arrival of the first three of the second batch of Sukhoi aircraft has been delayed, due to financing problems and obtaining parliamentary approval – a situation that still awaits resolution. As things stand at present, the funding package with Russia still has to be solidified although this is anticipated shortly. It is believed that that the BMP-3F purchase from Kurganmashzavod is now down to 18 vehicles and that part of the helicopter order will include six Mi-35 attack helicopters. Bearing in mind the international financial situation, negotiating any major line of credit will be considerably more complex than it was a mere six months ago.

Despite this there is confidence that the Russian defence package will go ahead. This billion dollar package will demonstrate that Russia has become a key equipment supplier to Indonesia. However, this relationship has even more potential. In terms of the Sukhoi combat aircraft, there will be a requirement to upgrade the existing Su-27SK/Su-30MK fleet to the Su-27SKM/Su-30MK2 standard. The outline TNI-AU requirement calls for a mixed squadron of some 16 Su-27SKM/Su-30MK2 aircraft – indicating a need for six more aircraft. In reality the TNI-AU would need to have considerably more Sukhoi aircraft to meet its true requirements, but that will inevitably be a function of funding.

In the long term Indonesia promises to become a very important market for Russian defence equipment. The evolution of the relationship between the two countries also shows the growing sophistication of the Russian defence industry; back in 2003
they were taking payment in cash and countertrade, now they are capable of providing billion dollar financial packages.