Improving cooperation with South Korea

The Jakarta Post , Jakarta | Wed, 09/05/2007 2:16 PM | Opinion

Makmur Keliat, Jakarta

Why is there a need for Indonesia to strengthen its defense cooperation with South Korea? One may formally answer this question by referring to the joint declaration of the strategic partnership between Indonesia and South Korea signed in December 2006.

It is clearly cited in the declaration that the defense sector is one of the 32 areas of cooperation necessary to be strengthened by the two countries in the future. One may also rely on the report submitted by the Eminent Person's Group in the year 2007 suggesting that there is a need for two countries to give priority to measures to expand and intensify cooperation in the defense sector.

Both the joint declaration on the strategic partnership and the report by the EPG certainly can be considered as a milestone and momentous for Indonesia and South Korea's bilateral relationship.

It is most likely that the objective condition of the capability of the Indonesian Military (TNI) is one of the important factors why a defense cooperation with South Korea is necessary. As a result of the arms embargo imposed by the United States and other European countries in the early 1990s and followed by the financial crisis in 1998, all branches of the TNI have lost significant capability to pose a deterrent effect against external actors, if compared to other states in Southeast Asia. For instance, Indonesia is reported to have far fewer combat airplanes of all types compared to Malaysia, Thailand and Singapore. Indonesia even has fewer combat aircraft compared to the Philippines.

The lesson Indonesia has picked up from the past is that in the long run there is an urgent need for the country not only to diversify the sources of its military equipment and arms, but also to seriously build its defense industry.

Another reason may relate to the fact that South Korea has played an important role in assisting Indonesia to improve its military capability through a number of schemes. The first scheme is through providing loans. Though the amount is still meager, the Indonesian Defense Ministry in the last 10 years has obtained more than US$130 million from loans given by South Korea to the Indonesian government. The loans have been mainly in the form of export credit facilities to purchase military equipment such as military trucks, bulletproof vests, mine detectors, military helmets and training aircraft.

The second scheme is a counter-purchase mechanism. There has been a report that in exchange for Indonesia's military purchases, South Korea agreed to procure eight CN-235 (military and VIP versions) from Indonesia with an equal monetary value (around $130 million).

Since Indonesia is interested in buying two submarines from South Korea and South Korea is interested in acquiring 12 units of the CN-235-22- Special Mission Operation Tactical transportation and CN-235 aircraft simulator manufactured by PT Dirgantara Indonesia, there is a possibility to institutionalize the counter-purchase mechanism.

The third scheme is through licensed production. Indonesia is reported to have attempted to obtain a contract to purchase four LPD (Landing Platform Dock) ships from South Korea, two of which will be built in South Korea and the other two will be constructed in Indonesia. Indonesia hopes the two ships that are to be built in Indonesia will make use of local contents as much as possible.

It is also expected that this method could be utilized to facilitate the process of technological transfers from South Korea to Indonesia. In this context the Joint Defense Logistic and Industry Committee (JDLIC), which is to be held annually, could become a useful mechanism for the two countries' defense ministries to exchange information regarding possible counter-purchases for military procurements.

The fourth scheme is through a capacity-building mechanism. Indonesia has proposed that its technicians could be trained for aircraft maintenance in South Korea because it currently possesses three KT-1 training aircraft. On the other hand, Indonesia could also train South Korean technicians for the maintenance of CN-235 acquired by South Korea. This mutual training arrangement for each country's technicians would be useful because aircraft maintenance for the KT-1 and CN-235 could be done more efficiently by employing local technicians.

The entire scheme provides strong evidence of the significant progress in defense cooperation between Indonesia and South Korea in the last decade. However, there is still a large window of opportunity for the two countries to extend and deepen their defense cooperation.

In addition to licensed production, there are two other types of the offset strategy that needs to be examined; namely co-production and co-development. Co-production means that the buyer is not only involved in producing military equipment being ordered, but also involved in producing the same equipment being ordered by the government of the seller, or to fulfill orders of third parties. In other words, in the case of co-production, the buyer becomes a partner of the seller and there is no obligation to transfer technology in a significant manner.

The second type, co-development, means that countries agree to collectively plan, develop and produce a weapon.

There are two main reasons why offset strategy is viable for two countries. First, arms-producing countries could develop offset networks to gain future contracts. At the same time, the buying countries could also benefit because it could be utilized as an instrument to reduce foreign exchange burdens, gain market access from the selling countries and stimulate technological developments in producing products for non-military uses.

Second, the principle of autarchy seems to have become outmoded in manufacturing weapons for the purpose of national defense. The existing tendency at the global level, particularly in international arms transfers, has shown this fact. It has become more common to find that arms transfers are not merely conducted through directly buying the needed weapons, but also through strategic alliances or cooperation between sellers and buyers, both for the reasons of technological development and the financing of the arms purchases.

Since each country wants to reduce its dependence on foreign sources of arms and since strategic alliances have become more fashionable, almost all states currently can be categorized either as arms producing countries, arms exporting countries or arms importing countries. In fact, South Korea is the case in point when the country, in cooperation with the U.S., succeeded in producing a number of military weapons such as the F-16 and F-5 E Tiger.

The writer is a lecturer at the Department of International Relations, School of Social and Political Sciences, University of Indonesia. This article is a shortened version of a paper he presented at the recent roundtable seminar on Indonesia-Korean relations, Beyond the Singing of Joint Declaration on Partnership, in Jakarta.

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