The government insists that it will go ahead with development of the KFX/IFX jet fighter although its South Korean counterpart, under the newly elected President Park Geun-hye, has decided to postpone the project.
'We don't want to call the postponement a failure or annulment. KFX/IFX is not a failed project. It was merely because of the transition of government in South Korea,' Defense Minister Purnomo Yusgiantoro said after meeting President Susilo Bambang Yudhoyono at the State Palace on Wednesday.
Purnomo said that there was no change to the commitment to the joint development of the aircraft.
'We have told our South Korean counterparts that we will continue doing our part. Whatever their decision is, and whatever technology they focus on, we will follow their lead and our 20 percent of share will remain,' Purnomo said.
Purnomo claimed the delay would not cost much, because it is a long term project, expected to last 15 years.
The agreement was signed in 2012 when South Korea was still led by president Lee Myung-bak.
The 2012 deal states that Indonesia will pay up to 20 percent of the US$5 billion development project with the remaining 80 percent paid by the South Korean government and the Korea Aerospace Industries ( KAI ).
The KFX/IFX programme was intended to develop a next-generation fighter aircraft by 2020.
The KFX/IFX fighter is a single-seat, twin-engine jet with stealth capability equal to the US-made Lockheed Martin F-22 Raptor.
The new South Korean government wishes to develop an aircraft equal to the more advanced Lockheed Martin F-35 Lightning II.
Soon after she was elected in February, Park began to reconsider the KFX/IFX project, especially considering the amount of money South Korea would have to pay.
New members of parliament have also refused to prioritize the project and Seoul has decided to delay the project for 18 months.
Lawmakers were disappointed with the cancellation particularly because Indonesia has financed the initial research and development.
The government has sent dozens of scientists to South Korea.
TB Hasanuddin of House Commission I on defense and foreign affairs, said that about Rp 1.6 trillion ( $164.8 million ) was already spent on the project.
In spite of the cancellation, the Indonesian defense system will get a boost this year especially with regard to the shipment of weaponry.
Indonesian Army ( TNI ) Chief of Staff Gen. Pramono Edhie Wibowo said 164 used armored vehicles from Germany, including 104 German Leopard 2 main battle tanks ( MTB ), will arrive this year.
Also scheduled for delivery are 50 Marder 1A2 infantry fighting vehicles, 4 Armored Recovery Vehicles, 3 mobile bridge-layers, and 3 armored engineering vehicles.
'We will have all of them already in Indonesia when the TNI celebrates its anniversary on Oct. 5,' Pramono said.
The armored vehicles were bought with a $280 million foreign loan.
Initially, Indonesia's order only covered 44 Leopard MBTs using the same amount of the loan.
'However, after we went to Germany and started negotiations, we got a cheaper price and we could buy 164 units,' Pramono said.
Many see the German-made Leopard tank as unsuitable for Indonesian terrain, which is dominated by thick forests and riverbanks.
The tank is regarded as more suitable for arid battlefields such as those in Iraq or Afghanistan.