Billions in trade deals expected during Putin's visit to Indonesia

Herald Tribune, Published: September 4, 2007

JAKARTA, Indonesia (AP) : Russia and Indonesia are expected to sign billions of dollars (euros) worth of weapons, mining and oil deals during Russian President Vladimir Putin's first visit to the country this week, a presidential spokesman said Tuesday.

Russia will grant Indonesia a US$1 billion (€735 million) credit line to buy Russian military hardware, said spokesman Dino Pati Djalal, without providing details.

Indonesian mining company Aneka Tambang will sign a US$3 billion (€2.2 billion) deal with Russian aluminum giant United Company Rusal, while state-owned oil company Pertamina plans to sign a US$1 billion (€735 million) agreement with Russia's LukOil, he said.

Putin will meet with Indonesia President Susilo Bambang Yudhoyono on Thursday during a one-day stop over on his way to the Asia-Pacific Economic Cooperation forum in Australia.

The Russian investment will bring a much-needed boost to foreign capital inflow and help revamp Indonesia's aging mining and oil facilities. It comes just weeks after South Korea announced it signed US$8.5 billion (€6.2 billion) in trade and investment deals with Jakarta.

Indonesia has been looking for other sources of arms since the United States — formerly its largest supplier of weaponry — cut military ties in 1999 over human rights concerns. The ban was lifted in 2005, but Jakarta continues to look elsewhere for military hardware.

Indonesia is a major arms-buying client for Russia and has spent hundreds of millions of dollars (euros) on fighter jets.