Did Indonesia Bring the 'KF-X Contribution Solution Package'?

[Asia Economy Yang Nak-gyu, Military Specialist Reporter]With Prabowo Subianto, Indonesia's Minister of Defense, visiting Korea, attention is focused on the cost-sharing issue of the Korean Fighter eXperimental (KF-X) project.

Minister Prabowo arrived in Korea the day before on a dedicated plane and began his official schedule on the 8th. He is also expected to attend the KF-X prototype delivery ceremony.

His visit, the first since his appointment as minister in 2019, is drawing attention because of the KF-X project. Indonesia, a joint development partner, has consistently shown a passive attitude, including failing to pay its share of the KF-X costs.

The total project cost reaches 8.8 trillion won, making KF-X the largest defense enhancement project since the founding of Korea. A certain quantity of the aircraft will be produced locally in Indonesia. The Korean government has ambitious plans to use Indonesia as a foothold to export the KF-X, a 4.5-generation fighter superior to the F-16, to developing countries. If Indonesia, which is currently delinquent on its payments, withdraws from the joint development, it is expected to cause setbacks to the government's export strategy.

Korea and Indonesia have been promoting a plan to jointly bear the total project cost and develop and mass-produce the KF-X by 2026. Accordingly, Indonesia agreed to invest 1.7338 trillion won, which is 20% of the total project cost, receive one prototype and technical data, and produce 48 next-generation fighters locally.

Indonesia agreed to share the 1.7338 trillion won in installments according to development phases, but as of February, it had only paid 227.2 billion won out of the 831.6 billion won due, leaving about 600 billion won overdue. The government plans to focus on resolving the payment issue during Minister Prabowo's visit. Depending on Indonesia's stance on the overdue payments, it will be possible to gauge their willingness to continue joint development.

Minister Prabowo is also expected to explain Indonesia's position through meetings with senior Korean government officials during his visit. However, based on statements from Korean officials, an immediate resolution of the payment issue seems uncertain.

A government official said, "Indonesia has responded that the upper limit of its mid- to long-term defense enhancement projects has already been exceeded," adding, "They are prioritizing defense projects under the mid-term defense plan, and long-term projects like KF-X seem to have been pushed to the back burner."

Indonesia is reportedly prioritizing the purchase of the French Dassault Rafale fighter jets according to its mid-term defense plan.

Air Chief Marshal Fajar Prasetio of the Indonesian Air Force stated in February that from this year through 2024, they plan to acquire various modern defense equipment, including the F-15EX and Rafale fighters. A Korean government official said Indonesia prefers the Rafale, which India recently contracted to purchase 36 units, over the F-15EX, the most advanced version of Boeing's F-15 series.

Another government official predicted, "Minister Prabowo will likely finalize Indonesia's position on the KF-X around the end of this year or early next year after explaining his country's stance and hearing Korea's opinions during this visit."

Moreover, Indonesia is reported to have requested a loan of as much as 5 billion dollars (approximately 5.6 trillion won) from Korea. Korea's response to this request is also expected to influence Indonesia's decision on continuing joint development of the KF-X. There are also reports that Indonesia has asked to reduce its KF-X cost-sharing ratio from 20% to 10%, delay payment from 2028 to 2031, and requested construction of production facilities locally, but the Defense Acquisition Program Administration (DAPA) has denied these claims.

This content was produced with the assistance of AI translation services.