Russian Defense Industry Loses Hundreds of Millions

The tsunami of 2004 was not only a terrible human disaster for the archipelago nation of Indonesia, but is shaping up to be a financial one as well. One of the repercussions from the tidal wave is being felt all the way to snowy Russia: the Indonesians, who were on the brink of buying more Russian fighter jets and helicopters, have quietly pulled the plug on the order, leaving the Russians disappointed and scrambling for customers, according to Russian media and Reuters reports.

Over the last 40 years the Indonesians have used both Russian and American war materiel; the Air Force currently is flying US-made Douglas A-4 Skyhawk aircraft from the 1960s, which are overdue for replacement. The Northrop F-5 Tiger IIs from the 1970s are looking pretty long in the tooth, too; and even the newer F-16s have issues with spare parts. While most of its major weapons systems are US-made, Indonesia is under a US embargo, thanks to US disapproval of Indonesian suppression of East Timorese separatists. Even if the embargo was lifted, any arms supplied by the US would probably have strings attached limiting their utility against other separatist movements --which is the primary reason the Indonesians, beset by several such movements, want modern weapons. One Indonesian politician's response to the US embargo, in mid-December before the tidal wave brought American aid en masse, was succinct: "Go to Hell with your aid!"

With US machinery out of the running, Russian Sukhois were chosen: Su-27MKs and Su-30 MKs. These are very advanced (and expensive) warplanes. How expensive? After the first buy in 2003-2004, this Indonesian buy was going to be six airframes, plus spares and support, for a paltry $890 million.

With the helicopters and other odds and ends, the total buy was as high as $1.5 billion, but the tsunami changed that. The money that had been earmarked for capital improvements in the military has been diverted to disaster relief. Reuters quoted a Russian official as saying, "It’s all about the tsunami ... It has already affected Indonesia’s previously announced plans to buy Sukhoi planes and combat helicopters."

Russia had been counting on this sale after Thailand turned down Russian fighters and bought SAAB Gripens last year. Arms are a major Russian export and combat aircraft are by far the majority of Russian arms exports. But Indonesia can't be concerned about Russia's plight at this hour, and right now in Indonesia, an air defense capability is the least important national requirement, with hundreds of foreign aircraft in Indonesian airspace on relief operations -- with the blessing of the Indonesian government and people.

FMI: www.scramble.nl/mil/6/tniau/main.htm