Defense officials from South Korea and Indonesia have recently convened in Jakarta in a bid to breathe new life into the troubled KF-21 joint fighter jet development program. The high-level meeting, the first of its kind since a sensitive technology leak incident involving Indonesian engineers came to light, saw Seoul’s Defense Acquisition Program Administration (DAPA) head, Seok Jong-gun, engage with Indonesian Vice Defense Minister Donny Ermawan Taufanto to discuss avenues for bolstering defense cooperation, with the KF-21 initiative taking center stage.
Indonesia Ministry of Defense
The KF-21, a collaborative effort between the two nations, has faced significant headwinds, primarily stemming from disagreements over funding and the intricacies of technology-sharing arrangements. Indonesia initially committed to contributing approximately 20 percent (1.6 trillion won) of the 8.1 trillion-won program, launched in 2015, in exchange for technology transfers and a prototype aircraft. However, progress has been impeded, most notably by a February 2022 incident where Indonesian technical personnel were caught attempting to illicitly transfer sensitive KF-21 data using an unauthorized USB device. Five Indonesian technicians remain in South Korea, barred from leaving as the investigation continues, with prosecutors still conducting additional inquiries, delaying potential indictments until May. This ongoing legal matter has reportedly caused considerable dissatisfaction in Jakarta.
In an effort to salvage the project, South Korea made concessions in August 2022, agreeing to reduce Indonesia’s financial obligation from 1.6 trillion won to 600 billion won ($409 million). This adjustment, made at Indonesia’s request citing financial pressures and the need to maintain cooperation on related ventures such as the Indonesian-specific IF-X fighter jet production, was officially stated by DAPA as being unrelated to the preceding data breach.
Despite this significant reduction, Indonesia has yet to formally ratify the revised terms, which necessitate an amendment to the original contract. Jakarta has insisted that the legal issues surrounding its technicians must first be resolved before any new agreement can be finalized. This stance has elicited frustration from officials within the South Korean defense industry, with one source stating that “Indonesia is acting as if it’s the victim, even though the issue was caused by their actions”. DAPA has cautioned that these persistent delays could jeopardize the KF-21’s development timeline, which targets completion in 2026, followed by deliveries to the Republic of Korea Air Force later that year. The financial impasse is also impacting negotiations concerning the transfer of a KF-21 prototype to Indonesia and the valuation of associated technology transfers. Furthermore, Indonesia’s delayed commitments could potentially inflate the unit costs of the aircraft, particularly if it fails to follow through with its plan to procure 48 locally produced IF-X jets. The original agreement stipulated that South Korea would acquire 120 KF-21 units, while Indonesia would produce and purchase 48 under the IF-X designation.
During the recent discussions in Jakarta on Mar. 21st, Minister Seok expressed his hope that enhanced communication could help overcome the existing hurdles and solidify the partnership. Alongside the KF-21 issue, the two sides also addressed the extension of the operational lifespan of the KT-1 trainer aircraft and progress on the second phase of the T-50 advanced trainer jet project. Mr Taufanto reportedly highlighted the competitiveness of South Korean military hardware, including the KT-1 and T-50, and affirmed Indonesia’s commitment to fulfilling contracts and maintaining cooperative ties across various sectors.
Following the meeting, both nations affirmed their commitment to continued collaboration on the KF-21 program. They reportedly reached a broad agreement on revising the joint development agreement to reflect Indonesia’s reduced financial contribution and discussed a payment plan, aiming for a swift finalization of the amended agreement. Indonesia also reiterated its intention to procure 48 KF-21 aircraft, and both parties pledged mutual support to meet local production capabilities. Minister Seok characterized the talks as an opportunity to normalize bilateral arms cooperation that had been under strain, providing “momentum” for broader collaboration. However, it is acknowledged that challenges persist, notably in adjusting the terms related to technology transfer, the provision of prototypes, and the integration of Indonesian-made components into the KF-21/IF-X.
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