UK Politics

David Cameron announces £326m Airbus deal in Indonesia

David Cameron has announced a £326m deal to sell 11 Airbus A330 aircraft to airline Garuda Indonesia.

Arriving in Indonesia on his trade tour of East and South East Asia, the prime minister said the deal was "good news for the UK aerospace industry".

It would safeguard UK jobs and was "a vote of confidence in Britain's manufacturing base", Mr Cameron said.

Indonesia's trade with the UK accounts for just 0.07% of its imports. It is the world's largest Muslim democracy.

In an interview with Kompas newspaper, Mr Cameron praised Indonesia as an "inspiring democracy" and said he wanted to double trade by 2015.

"In its successful transition to democracy, Indonesia represents a powerful example for the world of how political progress can fuel economic success," he told the paper.

Mr Cameron pledged UK help if required after an earthquake struck off the coast shortly before a press conference with President Susilo Bambang Yudhoyono.

He also announced that he had invited Mr Yudhoyono - who said there appeared to be no threat of a tsunami after the earthquake - to make a state visit to the UK later this year

Earlier Mr Cameron said the Garuda deal was "testament to the expertise of Airbus's British workforce" and would protect jobs in Bristol and Broughton.

"I hope it will offer other British companies involved in the £1.5bn supply chain the opportunity to secure more contracts," he said. The UK has some 10,000 jobs linked to Airbus.

Defence equipment

Speaking after the announcement on the tarmac at Halim Perdanakusuma Airport Mr Cameron said: "I said I wanted to link Britain up to the fastest growing parts of the world, because we need to trade and export our way out of our economic difficulties.

"Well, Indonesia is one of those countries. One of the most populated countries in the world, one of the fastest growing countries in the world. It will be a top 10 economy and these are huge opportunities for British business and British investment, both in Indonesia and Indonesian investment back into Britain.

"I think we need to recognise that so much of the power in the world is going to be to the South and to the East and we need to rebuild those relationships. We've got a good standing here because we're one of the largest investors into Indonesia, but we could be doing far better in terms of our exports and our sales.

"That's why I've packed a plane full of business people to come here to make those links to create those jobs and investment back at home."

Among those businesses are representatives from defence firms - with Mr Cameron defending their presence, saying it was right that British defence equipment was available to Indonesia.

The BBC's Indonesia correspondent Karishma Vaswani said that the UK imposed a ban on defence exports to the country more than a decade ago, following allegations British made equipment was being used against rebels.

But, our correspondent says, Mr Cameron stressed that Indonesia had transformed itself in the last decade to become one of the world's most important democracies, although human rights groups say Indonesia's military and police are still guilty of violations that often go unpunished

Mr Cameron was holding talks and delivering a speech in Indonesia before travelling to Malaysia and Singapore.

He is also expected to visit Burma, where he would become the first Western leader to hold talks with Nobel laureate Aung San Suu Kyi since her election to parliament there.

The prime minister began his trade tour in Japan, where he met Prime Minister Yoshihiko Noda and lobbied for UK companies to be given access to the country's defence market.

During his visit, it was announced that Japanese carmaker Nissan would build a new model at its plant in Sunderland.

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