Indonesia, Russia seal defence deal on Putin visit

By Ahmad Pathoni

JAKARTA (Reuters) - Indonesia sealed on Thursday a $1 billion deal to purchase Russian tanks, helicopters and submarines during a visit by President Vladimir Putin, marking a further sign of Moscow's growing re-engagement in the region.

The visit by Putin, the first to Indonesia by a Russian or Soviet leader in around five decades, is also due to see the signing of billions of dollars in mining and energy deals.

Russia, one of the world's leading arms traders with annual sales topping $5 billion in bumper years, wants to break into new markets and to rebuild its influence in Asia where Washington, and now increasingly China, have held sway in recent years.

"We have agreed to expand cooperation in areas we consider most important such as energy and mining, aviation, communications and others," Putin said after the talks with President Susilo Bambang Yudhoyono at the presidential palace.

"There's a good perspective to work together in the military and technical fields," he added.

Indonesia plans to purchase 10 transport helicopters, five assault helicopters, 20 amphibious tanks and two submarines from Russia, which will provide state credit facilities, Defence Ministry spokesman Edy Butar Butar told Reuters on Tuesday.

Indonesia agreed last week to buy six Russian combat aircraft from plane manufacturer Sukhoi in a deal worth $335 million, but so far no banks had agreed to finance the deal, Butar Butar said.

Weapons for the Sukhoi fighter jets were part of the $1 billion deal, Butar Butar said.