Russia Courts Indonesia

When Russian President Vladimir V. Putin visited Indonesia in September, he became the first Russian Leader to visit this country of some 240 million people in more then 50 years. Long gone are the days of relationships built on cold war and communist ideology. This has been replaced by a new resurgent Russia where relationships are being built on business and trade as the primary focus.

Under Putin, Russia is surging economicaly. It is now within the top ten economies in the world and has annual GDP around 8%.

Trade netween the two countries is steadily back on the increase after years of just a trickle. Trade which is currently around $700 million a year between the two countries is soon expected to surpass the $1 billion mark.

As part of the visit, President Putin witnessed the signing of a $1 billion arms deal with Indonesia. The deal is particularly lucrative to Indonesia as it offers a $1 billion line of credit, that is repayable over 15 years with no interest. Also Russia does not place unusual or difficult restrictions on the military platforms it sells to Indonesia. Unlike western countries that have enforced military trade embargoes in the past or placed silly restrictions on the equipment they sell to Indonesia. The deal includes the sale of Kilo-class submarines, amphibious tanks, passenger and attack helicopters and advanced Sukhoi jet fighters.

Much of the commentary in the Press around the world focused on the defence deal, but President Putin was accompanied by a strong delegation of banking, oil and energy officials. Russia is looking to get heavily involved in Indonesia`s energy, oil and mining sectors and a substantial amount of deals are in negotiations. Indonesia is seeking to establish nuclear-energy facilities and Russia`s nuclear-energy agency Rosatom is pushing to become a key player. Russia's Alfa Group announced its plans to invest up to $2 billion in Indonesia's telecommunications sector. The speed at which Russia is engaging Indonesia has caught many by surprise. But Russia is showing that it has long term interests in engaging Indonesia on both the economic and strategic fronts.

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Brief on Russian Defence, Trade, Security and Energy