Key Points
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Indonesia is considering withdrawing from the KFX/IFX development programme with South Korea.
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The reasons for the potential withdrawal include financing, technology sharing, and geopolitical factors.
The Indonesian government is contemplating withdrawing from the programme with South Korea to develop the next-generation Korean Fighter Xperiment/Indonesia Fighter Xperiment (KFX/IFX) aircraft, Jane’s has learnt.
Speaking at the Defence Services Asia (DSA) 2018 exhibition in Kuala Lumpur Indonesian officials said that while the country’s involvement is currently continuing, several key issues are causing debate over whether participation should be terminated.
These issues include finances, the degree to which Indonesia is gaining “strategic technical benefits”, and what officials described as 'geopolitical factors'. Officials also indicated that Indonesia’s future participation in the programme is likely to be determined by its senior leadership, including President Joko Widodo.
One Indonesian industry source said, “Actually, money is not the main issue even though there have been some issues with this. The main factors in this decision are the technical advantages that Indonesia can get through the programme and some geopolitical factors that the Indonesian government must consider.”
In reference to these geopolitical factors, the industry source mentioned “Russia, the USA, South Korea”. He did not elaborate but it is understood by Jane’s that Indonesia’s involvement in the project has been a source of concern in the US, a key supplier of KFX/IFX technologies, which is wary about the country’s long-standing military-technical ties with Russia.
In January 2018 Indonesian defence officials stated in comments to local media that there is currently a shortfall of about IDR1.85 trillion (USD140 million) that needs to be paid to South Korea in return for its involvement in the KFX/IFX programme as per finance agreements signed in 2015. Jane’s understands that Indonesia’s repayments on the programme are behind by about 40% of its agreed financial commitment.
