In a disconcerting turn of events, Indonesia has yet again failed to notify the South Korean government of its financial plan for contributing to the KF-21 fighter project, jeopardizing this collaborative endeavor.
The Defense Acquisition Program Administration (DAPA), South Korea’s arms procurement agency, expressed its concerns as Indonesia failed to provide the expected payment schedule by the end of October, further straining the partnership.
The KF-21, a groundbreaking supersonic combat aircraft, is the outcome of a joint project between South Korea and Indonesia. It seeks to harness South Korea’s cutting-edge technology for essential components of the aircraft.
Back in 2016, Indonesia had agreed to finance approximately $958 million (1.3 trillion South Korean won), amounting to around 20% of the overall project’s cost. In exchange, Indonesia was promised a prototype of the fighter jet and technical assistance for the domestic production of 48 units within its territory.
However, the recent delay in Indonesia’s payments has raised concerns. Of the promised amount, Indonesia has disbursed approximately $208.7 million, leaving a substantial outstanding payment of $743.3 million.
This is not the first time Indonesia has delayed notifying South Korea about its payment schedule. Earlier this year, they pledged to provide this schedule by the end of June but did not deliver. Subsequently, they rescheduled their commitment for the end of October but have failed to meet this deadline as well.
Minister of DAPA Eom Dongwhan recently expressed his concerns during a parliamentary audit of the arms procurement agency, stating that if Indonesia continues to break its promises, they might be forced to reconsider the entire joint project.
This inconsistency in payments has cast doubts on Indonesia’s commitment to developing this advanced multirole warplane, which aims to strengthen the air forces of both nations and has far-reaching implications for their national security.
As of now, DAPA is considering various possibilities regarding its partnership with Indonesia, while awaiting the payment plans promised by Jakarta. They have also made plans to amend their basic agreement with Indonesia on the joint project by the end of the year to address the payment issue.
Indonesia’s decision to purchase fighter jets from other countries while withholding payments to South Korea has significantly eroded the latter’s trust. Financial constraints have been cited as the reason for the delayed payments. Indonesia signed a memorandum of understanding to acquire 24 units of the F-15EX from U.S. manufacturer Boeing Co. In February 2022, Indonesia also sealed an $8.1 billion deal to procure 42 Dassault Rafale fighter jets from France.
Choi Hyun-ho, a military commentator, suggests that Indonesia might be opting for fighter jets that can be immediately deployed in combat, in contrast to the KF-21, which is still under development. The country currently operates Russian fighter jets and older F-16s, and the need for more capable and readily deployable aircraft might be pressing.
Experts believe that Indonesia’s delay in payments might also be politically motivated. Indonesia’s Defense Minister Prabowo Subianto, who is the son-in-law of former President Suharto, is anticipated to run for the presidency in the upcoming election. This might lead to attempts to renegotiate the terms of the KF-21 contract, seeking more favorable conditions for Indonesia.
Korea Aerospace Industries (KAI), the South Korean aircraft developer, has assured that it can manage without Indonesia’s contributions. However, they have a contingency plan and are evaluating when or if to put it into action. The situation remains uncertain as both countries navigate the complexities of this joint project.
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