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Russia signs deal on $1 bln loan to Indonesia for arms purchases

RIA Novosti

06/09/2007 15:09

JAKARTA, September 6 (RIA Novosti) - Russia has signed an agreement with Indonesia to provide a $1 billion credit line to the southeast Asian country for Russian weapons purchases.

The agreement was signed by Russian Deputy Finance Minister Sergei Storchak and his Indonesian counterpart after talks between presidents Vladimir Putin and Susilo Bambang Yudhoyono in Jakarta.

Indonesian Defense Minister Juwono Sudarsono said his country plans to buy Russian fighter planes, submarines, and helicopters with the funds.

In late August Russian aircraft manufacturer Sukhoi signed a contract with Indonesia to deliver six multi-role Su-27s and Su-30s fighters worth $350 million at the MAKS-2007 air show near Moscow.

Jakarta became a major arms customer of Russia eight years ago when the United States slapped an embargo on arms sales to the country over alleged human rights violations. Washington has since lifted the ban, but Indonesia, the world's most populous Muslim country, continues to turn to Russia for its military hardware imports.

The countries also signed a number of documents and agreements Thursday, including a memorandum on mutual understanding between their governments on cooperation in the fight against terrorism.

President Putin told a news conference after the meeting with his Indonesian counterpart that Russia and Indonesia have a shared view on the importance of strengthening the role of the United Nations in countering terrorism.

The Russian leader also said the sides hoped that the current annual trade level of $500 between the countries would reach $1 billion in the near future.

He said bilateral economic cooperation agreements had also been signed in Jakarta, in particular between Russian independent oil giant LUKoil and Indonesia's state-owned Pertamina on cooperation in oil and gas prospecting.

President Yudhoyono told the news conference he expected his country and Russia to sign several investment agreements in the future, worth over $4 billion.

"The volume of Russian investments in Indonesian economy has been very low, but we now plan to sign bilateral agreements worth over $4 billion," the Indonesian leader said.

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