KAI chief Kim Hong-kyung told the Defense Ministry on Tuesday that the Indonesian government notified it of the decision and asked to start negotiations for a final contract. The two sides apparently hope to sign a memorandum of understanding in the next nine months.
“A deal with Indonesia would make Korea the world’s sixth exporter of supersonic aircraft after the U.S., Russia, Britain, France and Sweden,” Kim said to the Chosun Ilbo. “It‘s a phenomenal achievement for Korea to win the bid against Italy, Russia and other countries that are more than 90 years ahead of us in terms of aerospace technology.”
Kim added Indonesia has a record of accomplishment of procuring arms from both the former Soviet Union and the West, making it especially remarkable that it has opted for an Asian defense firm.
The decision came after an apparent attempt by South Korea’s intelligence agency to snoop on Indonesian officials earlier this year sent worries through the Seoul defense establishment that Indonesia would walk away from a deal.
South Korean intelligence officials were forced to apologize for an incident in late February in which three intruders were thwarted in an attempt to take a laptop from an aide to Indonesia‘s economic minister, who was visiting Seoul in part because of the defense deal.
The intruders, believed to be part of South Korea’s intelligence service, were not caught and police have said nothing about the case since. Intelligence-agency officials made a public apology over the matter at a parliamentary hearing, though they revealed no details about it.
This deal, according to analysts on NPR, will be a chance for Korea to show the countries in the Pacific, the strength of Korea‘s prowess in the global aerospace industry. If it proves a success, it will help open other markets such as Israel and Poland.
The deal will also catalyze the development of a new growth industry in Korea. The aerospace industry brings together cutting-edge technology in the fields of electronics, electrical engineering and materials and requires 100 times the level of precision that goes into manufacturing cars. Around 200,000 parts go into each trainer jet, and this means new business opportunities for Korea’s parts makers and other related industries.
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