{"id":2204993,"date":"2024-05-07T08:00:46","date_gmt":"2024-05-06T23:00:46","guid":{"rendered":"https:\/\/koreapro.org\/?p=2204993"},"modified":"2024-05-06T16:25:45","modified_gmt":"2024-05-06T07:25:45","slug":"south-korea-faces-financial-burden-as-indonesia-seeks-to-cut-kf-21-costs","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/05\/south-korea-faces-financial-burden-as-indonesia-seeks-to-cut-kf-21-costs\/","title":{"rendered":"South Korea faces financial burden as Indonesia seeks to cut KF-21 costs"},"content":{"rendered":"
Indonesia has proposed reducing its financial contribution to the joint KF-21 fighter jet development project with South Korea to approximately one-third of the originally agreed amount. South Korean media <\/span>reported<\/span><\/a> on Monday that Indonesia has offered to pay a total of $441.5 million (600 billion won) by 2026, significantly lower than the initially pledged 20% of the $6 billion (8.1 trillion won) project cost.<\/span><\/p>\n The revised proposal comes amid concerns over Indonesia\u2019s <\/span>delayed payments<\/span><\/a> and its request to defer the payment deadline to 2034. South Korea maintains that the full payment should be made by the project\u2019s 2026 development deadline. The South Korean government is reportedly in consultation with Indonesia regarding the proposal and has yet to decide whether to accept Jakarta\u2019s proposal.<\/span><\/p>\n Why It Matters<\/b><\/p>\n Indonesia\u2019s inconsistent payments and President-elect Prabowo Subianto\u2019s <\/span>potential influence<\/span><\/a> on the KF-21 fighter jet project raise concerns about the future of this joint venture. Indonesia <\/span>purchased<\/span><\/a> 42 French Rafale fighter jets in Feb. 2022 despite being in arrears for the KF-21 joint fighter jet project. These developments will likely reduce trust between Seoul and Jakarta. Additionally, South Korea\u2019s willingness to partner with Indonesia on future projects will also likely decrease.<\/span><\/p>\n If South Korea accepts Indonesia\u2019s proposal to reduce its financial contribution, it will reportedly face an additional burden of approximately $735 million (1 trillion won). This could impact South Korea\u2019s defense spending plans, including its goal to <\/span>double its drone fleet<\/span><\/a> by 2026 to counter North Korea\u2019s threats. Moreover, South Korea\u2019s state arms procurement agency has already <\/span>scaled back<\/span><\/a> its KF-21 production plans for this year, signing a contract for only 20 jets instead of the initially planned 40. The jet\u2019s manufacturer, Korea Aerospace Industries, may incur losses if there are further reductions in the fighter jet\u2019s production plans.<\/span><\/p>\n