Malaysia and Russia seal RM3.42bil business deal

By MERGAWATI ZULFAKAR and PAUL GABRIEL

PUTRAJAYA: Malaysia sealed a deal yesterday to buy fighter jets from Russia, which in return, will purchase Malaysia's palm oil, provide transfer of space technology and train a Malaysian astronaut. 

Malaysia will pay US$900mil (RM3.42bil) in cash for the 18 Sukhoi SU-30 MKM jets, which will be delivered in stages between June 2006 and end of 2007.  

Payment will be made until 2009. 

Prime Minister Datuk Seri Dr Mahathir Mohamad and Russian President Vladimir Putin witnessed the signing of the agreement after their bilateral talks. 

Defence Minister Datuk Seri Najib Tun Razak told reporters that to offset the jet purchase, Russia agreed to provide transfer of technology worth US$270mil (RM1.03bil). 

The deal also included a joint-venture service centre for Sukhoi in Malaysia and supply of components. 

Najib said the astronaut programme would start in 2005. 

Regarding the palm oil deal, he said Russia would acquire RM1.06bil worth of the commodity.  

Also signed were two agreements on co-operation in science and technology and information technology.  

Foreign Minister Datuk Seri Syed Hamid Albar said Moscow asked Malaysia to make recognition of Russian degrees easier.  

“They also want us to explore other fields for Malaysian students and not just medicine,” he said. 

He said Dr Mahathir and Putin also touched on international issues, including on Iraq.  

They agreed no weapons of mass destruction had been found and the pre-emptive invasion by the coalition forces might not have been the most appropriate action. 

They also agreed that the post-war scenario in Iraq was very unsatisfactory and a UN force should be sent to replace the coalition forces. 

Earlier, speaking at a question-and-answer session during the Malaysia–Russia Business Forum in Kuala Lumpur, Dr Mahathir urged Russia to buy more from Malaysia, adding that trade should be fair and balanced. 

The forum was organised by the Asian Strategy and Leadership Institute, the Russia-Asean Co-operation Fund and the Russian embassy. 

“We buy steel products, aircraft and other related products from Russia and Malaysia has a wide range of products that we sell to the world. 

“But very few of these are exported to Russia,” he said.  

Dr Mahathir also said Malaysia had hoped to export cars to Russia but its government had terminated the contract. 

He suggested that joint ventures in the automobile industry be set up involving Malaysian and Russian businessmen. 

“Malaysia is also very keen to become the gateway for Russian products in the region,” he added.  

Putin said Russia would make it easier for Malaysian businessmen to obtain visas. 

Speaking on the need to facilitate people-to-people relations, he said: 

“I have spoken to Dr Mahathir to have more Malaysian students sent to Russia. We also want more of our politicians and businessmen to visit each other’s country.” 

According to Russian statistics, bilateral trade stood at US$574mil (RM2.18bil) last year, with Russian exports totalling US$346mil (RM1.31bil). 

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