RIA Novosti said the deal would be worth $300 million and that it would be for three Su-27 SKM and three Su-30MK2 to be operated by the Indonesian air force. Buying only six planes for $300 million is peanuts in the international arms trade.

The deal didn't even have the novel impact or shock of a first-time breakthrough for Sukhoi into the Indonesian market. The RIA Novosti report noted that the Indonesian air force already operates two Su-27SK single-seat and two Su-30MKK twin-seat fighters that it bought in a 2003 contract worth $192 million. No wonder only the specialist press reported the deal.

Sukhoi announced the new sales at the MAKS-2007, Russia's premier international air show that is held every two years in the town of Zhukovsky outside Moscow. RIA Novosti noted that this year's highly successful show enjoyed the participation of more than 540 Russian companies and at least 240 foreign aviation-related companies from more than 100 other countries.

More sales to Indonesia may be coming. RIA Novosti quoted Indonesian Armed Forces Commander Air Marshal Djoko Suyanto as saying Jakarta wanted to buy at least one full squadron of 16 Sukhoi fighters to succeed its aging old force of U.S. F-16 fighters.

This is the way long-term international arms relationships can develop. A small sale, like the 2003 order for four Sukhois, can lead to a slightly bigger order for six more planes now. Then a full squadron of aircraft will be sold, and the next sale may make Sukhoi fighters the prime interceptor of Indonesia, displacing the U.S. defense contractors who have dominated that market for 40 years.

The Russian government of President Vladimir Putin and the United Aircraft Building Corp., which was created last year to rationalize the Russian aircraft industry, and which includes Sukhoi, are clearly already working hard to make that happen. Selling a top-line interceptor like a Sukhoi for only $50 million apiece, as the new order does, is a steal -- it is giving them away at bargain prices.

And the Russian government has already made clear it is ready to do far more. RIA Novosti also reported that Indonesia might try to negotiate a $1 billion loan from Russia "to pay for the fighters and finance the possible acquisition of a Russian-made Project 636 Kilo-class diesel submarine."

Subsidizing other countries to buy one's own arms is a widely accepted, long-established practice. The United States has been doing it for years to key allies such as Israel.

The practice cements the client nation far more firmly in the major power's camp, and it also acts as an indirect subsidy to the national defense contractors involved, keeping open production lines and lowering the unit costs of the aircraft or other weapons in question that are also being produced for the major nation's own armed forces. With its treasury bursting with the windfall profits from oil and gas exports when global energy prices remain sky high, the Kremlin can easily afford the sums involved.

Sukhoi strengths and weaknesses
Sukhoi's announcement of sales of six new fighter planes to Indonesia last week for $300 million marks a small significant Russian advance in what has been for nearly 40 years a market totally dominated by major U.S. defense contractors.

It is particularly striking that the Indonesian government that approved the memorandum of understanding announced at the MAKS-2007 air show at Zhukovsky outside Moscow last week is led by strongly pro-American President Susilo Bambang Yudhoyono.

The earlier, smaller sale of four Sukhoi jets worth $192 million to Indonesia in 2003 was approved during the government of President Megawati Sukarnoputri, under whom relations with the United States were generally strained. Although Megawati herself was a strong secular democrat and political centrist, Bush administration policymakers found her initially naive or complacent in taking the Islamist terror threat in Indonesia seriously. They believed she failed to prod her security services to act aggressively enough on intelligence that Washington provided that might have prevented the 2002 terror bombings on the resort island of Bali that killed 200 people.

By contrast, Yudhoyono has won high marks from Washington for the cool, efficient rapid-response way he has successfully cracked down on Islamist terror cells, and the quality of U.S.-Indonesian security cooperation has vastly improved on his watch.

This makes the nature of the Sukhoi fighter aircraft sale all the more interesting. It does not reflect Indonesia's current geopolitical orientation. It is certainly a tribute to the attractiveness of the Sukhoi aircraft and the skill of the parent United Aircraft Building Corp. and of the Russian government in negotiating the sale.

This is not to say that Russian arms salesmen and Sukhoi executives relied only on the efficiencies of their company within the free market to win the deal. As we have previously noted, selling three new Su-27 SKM and three Su-30MK2s for only $300 million is a steal.

And there have already been reports suggesting that Russia may negotiate a $1 billion loan to Indonesia to help it pay for the fighters and even buy a project 636 Kilo class diesel submarine as well.

Significantly, Indonesia cannot buy diesel submarines from the United States because no U.S. shipyard builds them anymore or has for years. The U.S. Navy was insistent on moving to a nuclear sub-only undersea fleet. The Kilo deal therefore could offer Moscow the opportunity of making a much larger long-term niche for itself in selling more submarines to Indonesia. And where undersea boats go first, sales of surface warships could very easily follow.

Russian President Vladimir Putin has put a strong emphasis on boosting Russia's trade and diplomatic ties with the 10 countries in the Association of Southeast Asian Nations. With a total population of 500 million, they are estimated to account for 40 percent of global gross domestic product by 2040. Putin attended and addressed the first Russia-ASEAN summit in Kuala Lumpur, Malaysia, last December.

As political commentator Dimitri Kosyrev wrote at the time for RIA Novosti, Putin told the ASEAN representatives that "as the only nation with huge and so far untapped hydrocarbon resources in Asia, Russia could guarantee power supplies to Asia and the Pacific."

Russia's growing diplomatic and military sales clout in ASEAN has a powerful ally in former Malaysian Prime Minister Mahathir Mohamed, a longtime critic of the West who masterminded his nation's rise to advanced industrial free-market prosperity and sophistication. Another ASEAN member state, Vietnam, has always been a strong ally of Russia and the Soviet Union before it. "Russia fits in well here, as is seen from its growing mutual understanding and cooperation with India, China and ASEAN," Kosyrev wrote in his December 2005 analysis.

The latest Sukhoi fighter sale to Indonesia, and the easy financial terms Moscow offered to ensure it, should therefore be seen as part of a far larger regional grand strategy slowly but steadily pursued by the Russian government.

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