France to Boost Cooperation With Indonesia on Warplanes & Submarines in Wake of AUKUS Humiliation

Back in February, France's Defense Ministry announced an ambitious deal with Indonesia that would see Jakarta purchase 42 Rafale fighter jets for an estimated $8.1 billion, along with a spate of separate agreements pertaining to submarine development and ammunition.

Indonesia is set to become one of France’s biggest arms clients in the Indo-Pacific region, as French President Emmanuel Macron was reported as touting boosted cooperation with Jakarta on everything from warplanes to submarines on the sidelines of the Asia Pacific Economic Cooperation (APEC) Summit in Bangkok on November 17.

The French president was referring to a series of arms purchase agreements struck between Paris and Jakarta earlier in the year. In February, the two countries agreed a deal worth $8.1 billion for Jakarta to acquire 42 Rafale fighter jets, produced by Dassault Aviation. Indonesia was also to order two Scorpnene-class submarines. The diesel-electric attack vessels are developed jointly by the French Naval Group and the Spanish company Navantia. Other agreements between the countries pertained to satellite procurement and ammunition production.

The issue of submarines is particularly sensitive for France after the humiliating loss of a multi-billion dollar deal for the vessels last year in the wake of the announcement of a trilateral defense partnership called AUKUS in September 2021 by Australia, the US, and the UK. At the time, the first initiative announced under the AUKUS pact was the creation of nuclear-powered submarine technology for the Royal Australian Navy, which prompted the Australian government to scrap a $66 billion agreement with France's Naval Group company for the construction of diesel-electric submarines.

At the time, Paris slammed the move as "backstabbing." Australia eventually agreed on a generous compensation deal worth 555 million euros ($584 million) with French submarine builder Naval Group to end the contract and draw a line under the row.

In February, when asked if the developments surrounding the AUKUS alliance and the failed submarine purchase impacted the deal with Indonesia, a French Defense Ministry spokesperson told media:

"I don't think so, neither in one way nor the other... We have an Indo-Pacific strategy, we have the determination to maintain our defense industry and thus to export."

Indonesian President Joko Widodo hailed the deals with France, saying:

"I hope that defense partnerships aren't just focused on munition purchases, but also keeping in mind the development and joint production, technological transfer, and investment in defense industries."

Also on Thursday, French President Emmanuel Macron was cited as indicating that the ditched submarine-building deal for Australia wasn't about confrontation with China.

Tensions in the South China Sea ratcheted up after the announcement of the new security pact. While not mentioning China by name, the alliance was seen as part of a strategy to offset China's growing influence in the region. Beijing at the time denounced the three-way security pact as "extremely irresponsible." The alliance risked "severely damaging regional peace... and intensifying the arms race," said Chinese Foreign Ministry spokesman Zhao Lijian.

Emmanuel Macron also said that cooperation with Canberra on submarines “remains on the table," after a meeting a day before with Australia’s Prime Minister Anthony Albanese on the sidelines of the G20 summit in Bali, Indonesia. Underscoring that the offer related to conventional vessels, Macron added that it could guarantee Canberra's "freedom and sovereignty," saying:

"There is a fundamental choice, which is to know whether they produce submarines in their own country or rely on another - whether they go for nuclear or not."