Barter trade still works. Fighter jets for tea, coffee, palm oil and some cash, of course.

This is the review for an amazing jet fighter called Su-35 from Russia. “Why Russia’s Enemies Should Fear the Su-35 Fighter” It is one of the most advanced jet fighters of today with a maneuverability said to be second to none. Not even those from the nation with the biggest economy in the world. Just google for more information if needed yeah. Indonesia will get 11 of them by BARTER TRADE. 🙂 They (Indonesia) offers tea, coffee, palm oil and of course some cash. These 11 fighter jets are worth US$1.14billion (RM4.86 billion). Commodities worth US$570 million would be shipped to Russia and the delivery is expected to start in two years. Full article in TheStar here.  One major reason for the barter-trade is also because the U.S. is imposing trade sanctions against Russia. (Please do not ask me who’s wrong or who’s right. Do google to understand the rationale and arguments from both sides)
Between the two nations, Indonesia has a trade surplus of US$411 million with Russia. It means Indonesia is exporting more to Russia than it is importing. The deal will be finalised soon. The article said that Indonesia is trying to modernise its ageing air force after a string of military aviation accidents. Of course, Indonesian airforce do have at least 97 fighter jets. (Those that does not have a propeller in front of the aircraft.) Read here. Indonesia is the largest palm-oil producing nation in the world but is currently facing consumption cuts by the European Union countries. In terms of actual type and volume of the commodities to be used for this deal, it is still being negotiated. As at end 2016, Russia is the 6th largest economy in the world. Indonesia is 8th. By 2050 however, is PWC’s predictions come true, the Russia would still be the 6th largest economy in the world while Indonesia would leap to 4th. (Great prediction and good for ASEAN, as long as SMALLER countries take advantage and be friends with Indonesia)
I know, some may want to ask, since Russia could accept commodities, why not the whole deal is conducted in commodities then? Well, Russia would still need international currencies for their trading with other nations. Secondly, it will be an administrative hassle if Russia were to take those commodities and try to sell by themselves for cash instead. I guess more importantly, the cash they receive could be used to import goods for the production of these SU-35s. Seriously, it is not going to be ‘pick 11 of their current fighter jets which are in use, change the labels and then send to Indonesia.’ Perhaps Malaysia should follow what Indonesia has done. We can offer our palm oil too as the second largest palm oil producing nation in the world. Since some European nations have modern fighter jets but ‘dislikes’ palm oil, how about offering them palm oil as part of the payment? Maybe after trying, they may like our palm oil? Haha. Happy following.
written on 27 Aug 2017
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