SINGAPORE, Sept 12, 2007 (AFP) - Indonesia's billion-dollar arms deal with Russia should not be viewed as negative for regional stability, Malaysian Prime Minister Abdullah Ahmad Badawi said.

Jakarta's plans to buy Russian-made equipment will beef up the country's defence capability and ultimately contribute to Southeast Asia's security, the Malaysian leader said late Tuesday at the Forbes Global CEO conference here.

"I wouldn't see it as something that can bring about negative developments strategy-wise in Southeast Asia," he said in response to a question.

"All the countries in Southeast Asia need to strengthen their defence capability," Abdullah said.

"I think that's very important but we are not involved in any kind of arms race... therefore I do not see that as something that we need to worry about," he said.

Under the agreement, inked last week during a stop by President Vladimir Putin in Jakarta, Russia is providing a billion-dollar line of credit for Jakarta to use to buy its helicopters, tanks and submarines.

Malaysia has initiated a major arms build-up over the past few years, announcing deals for French submarines, British and Russian missile systems and Polish tanks among other equipment.

Australia has also said it does not feel threatened by Indonesia's military deal.