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South Korea has agreed to significantly reduce Indonesia’s financial contribution to the joint development of the KF-21 Boramae fighter jet, in a move aimed at easing tensions between the two countries over funding issues.
Initially, Indonesia had committed $1.2 billion to the $8.1 billion program, but financial difficulties prompted Jakarta to request a reduction. The Defense Acquisition Program Administration (DAPA) confirmed that Indonesia’s share has been cut to $437 million, less than half of the original amount. However, Indonesia has yet to pay $145 million of this revised commitment, raising concerns about its reliability as a financial partner in the project.
The fighter jet, classified as a 4.5-generation aircraft, is designed to replace outdated F-4 and F-5 fighters in the Republic of Korea Air Force. Although the KF-21 boasts advanced avionics and stealth capabilities, it lacks the internal weapons bay characteristic of fifth-generation fighters.
While the financial agreement aims to stabilize the partnership, diplomatic tensions remain. This financial restructuring comes amid broader concerns about the partnership. Two Indonesian engineers working on the project were recently accused of attempting to steal sensitive technology, further complicating the relationship. South Korean authorities, including DAPA and the National Intelligence Service (NIS), are investigating the potential breach. If a significant leak is confirmed, the future of the joint venture could be at risk.
Despite these challenges, South Korea remains committed to completing the KF-21 project by 2026. The fighter jet is expected to play a critical role in South Korea’s defence strategy, with plans to produce 120 units by 2032. The project continues to be a vital test of South Korea’s growing capabilities in advanced defence technology, even as it faces financial and diplomatic headwinds.