JOINT STATEMENT: Australian Defense Minister Joel Fitzgibbon (right) speaks to the press while his Indonesian counterpart Juwono Sudarsono looks on in Jakarta on Thursday. (JP/Ricky Yudhistira)

Indonesian and Australian defense companies will jointly build military equipment for both countries in the near future under a partnership that may ease Indonesia's dependence on weapons imports.

After meeting his Australian counterpart Joel Fitzgibbon in Jakarta on Thursday, Indonesia's Defense Minister Juwono Sudarsono said officials of the Indonesian Military and representatives of defense companies would soon fly to Australia to discuss what equipment would be built under the partnership.

"It will be equipment for our Navy, Air Force and Army. We must be able to increase domestic share of the production of any military equipment that the country uses to lessen our dependence on foreign countries," Juwono told a joint news conference.

Indonesian defense manufacturers, including PT Pindad, PT Pal, PT Dahana and PT Dirgantara Indonesia, produce 30 percent of the country's defense equipment, he said.

The minister said he was hopeful the negotiations could include technology sharing, although he added that he was aware the partnership must be mutually beneficial.

Fitzgibbon said the partnership would forge stability in the region.

"We're happy to provide all the assistance they need," he said.

Restricted by an arms embargo imposed by the United States, Indonesia has turned to Russia and China to procure equipment and establish partnerships to modernize its underbudgeted defense force.

Juwono said Jakarta was planning to buy three more Russian Sukhoi fighters to add to the four it acquired in 2003.

Last month, Indonesia received six Mi-17 helicopters from Russia following an agreement between the countries signed in 2007 that saw then Russian president Vladimir Putin provide a $1 billion loan for Indonesia to purchase 22 helicopters, 20 tanks and two submarines from Russia.

Indonesia's 2008 defense budget is $3.2 billion. Juwono previously said $10 billion was required to bring to an acceptable level the defensive capabilities of the country, which is home to 230 million people and more than 17,500 islands.

Juwono said the country's prioritization of economic development was evidence Indonesia was not involved in an arms race, despite significantly increased spending on weapons by neighbors Australia and China.

"We just want to keep our minimum striking force and technology on par with our neighbors," he said.

Fitzgibbon said Indonesia played a key role in ensuring security in the region "and as the minister indicated once the government has dealt with their immediate social and economic challenges they will understandably seek to develop their military capability."

Indonesia and Australia signed the Lombok defense pact in 2006 after Jakarta had torn up a previous pact with Canberra nine years ago when Australia led an international force in East Timor.

Australian Prime Minister Kevin Rudd this month said he was concerned about the potential for an arms race with China, and to a lesser extent India, which have expanded their defense budgets.

Experts have estimated China's secretly guarded defense budget to be between $US59 billion and $100 billion.

Australia's defense spending has leapt 56 percent in the past seven years to $25.66 billion.

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