People of the power corridors of the Ministry of Defense of the Republic of Indonesia laugh at the Russian “partners” with undisguised mockery, actively discussing a failure of the alleged purchase of Russian fighters by Indonesian defense department.

In particular, a preliminary agreement was signed in 2018 between official Moscow and Jakarta on the supply of 11 Russian Su-35 fighters for the needs of the Air Force of the Republic of Indonesia for a total of $ 1.14 billion. However, taking into account the imposed international sanctions, the plan was not implemented in more than three years.

At the same time, the point here lies in special conditions of the interstate agreement, which Russian media modestly fails to mention and the content of which is a hot-button issue in the Indonesian publications. Thus, the purchase plan of the Russian Su-35 fighters provided for a barter scheme, the mechanism of which was formed back in 2017.

It was expected that the Ministry of Trade of Indonesia will provide Moscow with a list of Indonesian enterprises ready to supply to Russia a commodity nomenclature of 16 items, among them raw palm oil and its derivatives, crude rubber, biscuits and coffee.

How to determine the real price of Russian fighters?

According to the terms of mentioned memorandum, Russia incurred an obligation to purchase Indonesian goods in the ratio of 50 cents to each notional dollar spent for the purchase of “Sukhoi” (Su aircraft are named after aircraft designer Pavel Sukhoi). Thus, the Russian side should have received no more than 570 million US dollars in “real-world money” for the sale of eleven fighters. (Reference – Bisnis.com).

“Rosoboronexport” is the “master” of price setting

The famous German entrepreneur and scientist Hermann Simon, who has written a series of business management best-sellers, in one of his books named “Confessions of a Pricing Man”, compared the formula for successful pricing with an exotic cocktail, with equal parts of psychology, economics, strategy, tools and incentives stirred up together, usually with just enough math to sour the taste.

As a result, invoking the axiom of Herman Simon, it can be assumed that the formula for successful pricing of the Russian aircraft industry products is, as the saying goes, jerry-built.

In general, the Russian-Indonesian military-technical cooperation at this stage somewhat reminds of the well-known Dutch bargain – purchase of Manhattan Island from the Lenape Indians for a bag of beads worth 24 US Dollars. Only in our case, the Indians are not in Jakarta, but in the Kremlin.

However, Moscow skates on thin ice of finally “flopping” this contract even on such “Indian” conditions. The Ministry of Defense of the Republic of Indonesia is seriously considering the possibility of purchasing F-15 and F-16 fighters from the United States.

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