[Asia Economy Yang Nak-gyu, Military Specialist Reporter] It has been confirmed that Indonesia has requested support for its own 'food base project.' However, the Defense Acquisition Program Administration (DAPA) stated that this is separate from the Korean fighter jet KF-21 (Boramae) project.
A DAPA official said to reporters on the 15th, "Minister Prabowo concurrently serves as a special minister in charge of the food base project in addition to being the Minister of Defense, and he requested President Moon for cooperation on Indonesia's food base project under his responsibility," adding, "This is not being carried out in connection with the KF-21."
Regarding claims that Indonesia requested a $5 billion loan to Korea linked to the KF-21 project, the official drew a clear line, saying, "There was no explicit mention of the amount, and cooperation on the food base project should be discussed in the economic sector."
Indonesian President Joko Widodo appointed Prabowo Subianto, Minister of Defense, rather than the Minister of Agriculture and Forestry, as the special minister for food development. Due to heavy rains, Indonesia's grain production declined, causing grain prices to reach their highest level in 8 years and 6 months.
Accordingly, Indonesia assigned Minister Prabowo the task of food development and agricultural land development in Central Kalimantan on the island of Borneo. Indonesia, with a population of 270 million, decided to develop 165,000 hectares of farmland in Pulang Pisau, Central Kalimantan, which is 2.7 times the size of Seoul (60,000 hectares). Furthermore, in September last year, Indonesia officially launched a farmland development project ten times the size of Singapore to ensure 'food security.'
At that time, President Joko Widodo ordered the large-scale farmland development project as the possibility of a global food crisis emerged due to the COVID-19 pandemic.
DAPA recently hinted that negotiations on cost-sharing would soon resume following a rapid turnaround in atmosphere triggered by the visit of Indonesian Minister of Defense Prabowo Subianto to Korea.
A DAPA official said, "During Minister Prabowo's visit (from the 7th to the 9th), working-level officials agreed to proceed with negotiations quickly," adding, "We plan to send letters soon to resume negotiations promptly."
The two countries agreed that Indonesia would invest 20% of the total KF-21 project cost (8.8 trillion won), amounting to 1.7 trillion won, receive one prototype and technical data, and then produce 48 units locally. To this end, Indonesia agreed to share the project costs by development phase, but as of February, it has only paid 227.2 billion won out of the 831.6 billion won due, currently delaying about 600 billion won. Including the contributions due this year, the total amount reaches 800 billion won.
When negotiations resume, discussions will likely begin with the timing and method of payment for the overdue contributions. Since Indonesia has delayed payments citing economic difficulties, a 'installment payment' method is expected to be the most likely option.
There is also interest in whether discussions will be held regarding adjusting the agreed 20% cost-sharing ratio. The official explained, "Regarding various options such as cost reduction or deferment, when President Joko Widodo requested adjustments in 2018 due to economic conditions, many options were included in that request," adding, "Adjustments and deferments have been matters under discussion since then."
Going forward, resolving the overdue contributions and the establishment of local fighter production facilities will be another measure to gauge the Indonesian government's willingness for the joint development project. On this, a DAPA official emphasized, "Indonesia acts according to the decision of the decision-maker (President Joko Widodo). Previously, the decision-maker had halted the project, but this time he said he would proceed, so we believe preparations will begin now."
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