Korea, Indonesia Settle Fighter Jet Dispute

      November 12, 2021 13:54

      Korea and Indonesia have settled a dispute over an W8.8 trillion joint fighter-jet project after the Southeast Asian country missed payments of W800 billion over the last four years (US$1=W1,183).

      The Defense Acquisition Program Administration in a statement Thursday said Indonesia agreed to honor the original contract and pay around 30 percent of its shares in kind.

      It took six rounds of talks to reach the agreement.

      Under the contract signed in 2016, Indonesia is to pay W1.7 trillion or 20 percent of the total development cost in installments until 2026.

      But W510 billion will now be paid in kind. The two sides agreed to keep talking about the exact timing and nature of the payment, but it will probably be some kind of natural resource.

      Officials from Korea and Indonesia including Defense Acquisition Program Administration chief Kang Eun-ho (4th from left) pose after signing an agreement about cost sharing for their joint fighter jet project in Jakarta on Thursday. /Courtesy of DAPA

      Korea and Indonesia agreed to develop the 4.5-generation fighter jet from 2015 to 2028. Instead of shouldering only a portion of the development cost, Indonesia was to receive one prototype fighter jet and related technology to manufacture 48 aircraft by itself. But it stopped making the payments in 2017 citing economic difficulties.

      Indonesian President Joko Widodo visited Korea in 2018 and asked President Moon Jae-in to renegotiate Jakarta's cost burden, and working-level talks started in early 2019.

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