Jakarta unmoved by storm over jet deal

Government pushes ahead with exports in exchange for Russian fighters but Mega is mired in claims of fast-tracking.

The Indonesian government has declared it will proceed with buying Russian fighter jets despite controversy raging in Parliament about the deal.

Trade and Industry Minister Rini Soewandi, at the centre of a political storm that has incurred the wrath of Indonesian legislators desperate to undermine the Megawati administration, said that Jakarta had already delivered palm oil to Russia as part of the US$192.6-million (S$336.7-million) barter deal.

The minister disclosed that the government would deliver textile products this month and tobacco next month under a scheme that includes some 30 commodities such as coffee, rubber, chocolate and electrical appliances.

Ms Rini said that the counter-trade deal with Russia, which President Megawati Sukarnoputri signed during her May trip to Moscow, was one way to jack up exports amid an economic downturn in developed economies such as the US and Japan.

In return, Indonesia will get four Sukhoi jets – two SU-20 and two SU-27 bombers – and two MI-35 helicopters.

Critics charged that the deal allegedly violated defence and budgetary laws and banking procedures.

Most arms procurement deals in Indonesia must be approved by the Defence Department before submission to the Finance Ministry and Parliament for budgeting. But according to air force generals, the Russian deal was not scrutinised, forcing Parliament to set up a special team to investigate the purchase for ‘irregularities’.

The uproar has little to do with transparency or the high moral ground of fighting corruption. It has everything to do with identifying points of vulnerability to attack Ms Megawati’s image.

While a putsch seems unlikely, her rivals seem to have scored some success in undermining her credibility as the probe commission begins to uncover seemingly damaging information about the deal.

For a start, they accused the President of bypassing the Defence Ministry and assigning Ms Rini and the State Logistics Agency (Bulog) to arrange payment through the barter scheme.

At the same time, there is suspicion those close to her were intricately involved.

Mr Effendy Choirie, head of the inquiry team, said that the President’s son-in-law, Mr Hapy Hapsoro, might have played a role in clinching the controversial deal. Others included prominent businessmen such as Mr Setiawan Djody of the Sedco Group, Mr Manimaren Sinivasan of the Texmaco Group and Mr Anton Sulaiman of the Djarum Group.

Complicating matters for the Indonesian leader was Ms Rini’s disclosure this week that Ms Megawati was the architect of the deal.

There was fresh controversy after Parliament found out that military commander Endriartono Sutarto, who had earlier maintained he did not know anything about this deal, had signed a letter on behalf of the Defence Ministry appointing Bulog to discuss the procurement.

Defence Minister Matori Abdul Jalil was left in the lurch about the project.

Analysts believe that Golkar and the Muslim parties stand to gain the most from this saga, which, together with the loss of Sipadan and Ligitan islands to Malaysia, will give Ms Megawati a rough ride in next year’s elections.

A senior Golkar legislator told The Straits Times: ‘Her image will suffer because of Sukhoigate’ but we have no plans to bring her down.’