'No going back' for S.Korea, Indonesia defence cooperation after jet funding dispute

'No going back' for S.Korea, Indonesia defence cooperation after jet funding dispute
A full-scale mockup of South Korea’s KF-X fighter jet is displayed at the Seoul International Aerospace and Defense Exhibition in Seongnam, South Korea, October 15, 2019. REUTERS/Josh Smith/File Photo

SEOUL, Feb 17 (Reuters) - Defence cooperation between South Korea and Indonesia will expand, diplomats from the two countries said on Friday, after a dispute over funding for a joint fighter jet project was resolved last year.

Indonesia had halted payments for its 20% share of development costs for the KFX jet in 2019, casting a cloud over the 8.1 trillion won ($6.16 billion) project, but it resumed payment late last year.

"The project did have some bumps but I think any project of this scale is bound to have some issues," Eui-hae Cecilia Chung, South Korea's director general for ASEAN and Southeast Asian Affairs, said when asked by Reuters about the project during a briefing at the Indonesian Embassy in Seoul.

"We’re very happy that the financial contribution from the Indonesian side was resumed last year, and we are confident that this will continue," she added.

"I think both sides are committed and there is no going back on this important initiative."

The next-generation aircraft developed by Korea Aerospace Industries (047810.KS) (KAI) is designed to be a cheaper, less stealthy alternative to the U.S.-built F-35, on which South Korea relies. A prototype of the jet successfully conducted its first test flight in July.

"Both sides are already in the same thread to continue this project, so we can also increase our cooperation especially in the defence industry," said Riza Hera Wardhana, counsellor for political affairs at the Indonesian embassy.

Indonesian Ambassador Gandi Sulistiyanto noted that Indonesian pilots were in South Korea to train with the new jet.

"It's showing that the commitment of the two countries is unchanging," he said at the briefing.

The KFX project is a cornerstone of South Korea's expanding defence industry, which signed big deals with Poland, the United Arab Emirates, and other countries last year.

President Yoon Suk-yeol has pledged to step up efforts to boost the export of weapons and secure cutting-edge defence technologies as he aims for South Korea to become the world's fourth-largest arms exporter.

Reporting by Josh Smith; Editing by Robert Birsel

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