Indonesia Building Competitive Defense Industry

The Jakarta Post02.01.2020 North America
Indonesia Building Competitive Defense Industry

Indonesia Building Competitive Defense Industry

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While modernizing its weaponry system, Indonesia’s defense industry has become a competitive producer of weapons and military vehicles, as seen in the surge of exports, the Jakarta Post reported.   

Statistics Indonesia (BPS) recorded growth in defense equipment exports in January-September, an increase of 500% to US$ 479,500 from the same period in 2018. The main export destinations for weapons and ammunition were South Africa, Belgium and Japan.

The country also exports combat vehicles to various countries, recording an increase of 38% to US$ 1.07 billion during the first nine months of the year. The main destinations for the combat vehicles were the Philippines, Vietnam and Thailand.

In his first two months serving as Defense Minister, Prabowo Subianto has toured countries and received visits from his counterparts, during which he has actively marketed Indonesian defense equipment.

The Minister’s spokesperson, Dahnil Anzar Simanjuntak, said the Ministry had secured new purchase deals for state-owned weapons manufacturer PT Pindad from several countries following Prabowo’s round of meetings.

“Laos, Ghana and the United Arab Emirates are thinking about purchasing more defense equipment from Pindad,” he told The Jakarta Post.

Pindad corporate secretary Tuning Rudyati confirmed the aforementioned countries had expressed interest in purchasing defense equipment from Indonesia. “They are mostly interested in buying SS2 [long-barreled weapons] and vehicles, both panzers [big tanks] and medium tanks,” Tuning told the Post.

With the UAE, according to Dahnil, the government has agreed to jointly produce weapons and tank boats. Pindad will partner with Caracal International, the country’s leading arms producer. The company has a portfolio that includes the technologically advanced 9mm striker-fired combat pistol, and three modular sniper rifles.

Pindad will also work together with Abu Dhabi’s Al Seer Marine Technologies to produce tank boats. The company specializes in developing tailored unmanned surface vessels.

Indonesia has prioritized defense in the past decade. The Stockholm International Peace Research Institute (SIPRI) recorded that Indonesia was the country with the second-largest military expenditure in Southeast Asia in 2018, spending $ 7.44 billion, 0.7% of its GDP. It only came second to Singapore, which had spent $ 10.84 billion, 4.9% of its GDP.

Worldwide, Indonesia ranks at 26th, with the United States topping the chart with $ 649 billion, 3.2% of its GDP.

In President Joko “Jokowi” Widodo’s first term, however, the government missed the target of its weaponry modernization program, the Minimum Essential Force, in which it reached 62.8 percent of implementation, far behind the targeted 72%.

Aside from the setbacks, the government has improved the defense industry through several bilateral agreements to produce weaponry. Among the strategic partnerships is with South Korea to develop the KF-X jet fighter, which is designed to be a cheaper alternative to the American-made F-35.

International relations experts have praised Prabowo’s move, saying that it is a great way to start defense diplomacy for Jokowi’s second term.

Prabowo visited Malaysia, Thailand, Turkey, China and Japan during his first round of trips as defense minister. He met with President Recep Tayyip Erdogan in Turkey and discussed potential cooperation, including in enhancing the capabilities of defense equipment, as well as the education and training of military personnel. The two countries have agreed to produce medium-sized tanks together. The tanks are expected to enter production in 2020.

In China, Prabowo discussed the development of defense technology with the Deputy Director General of the National Institute for Science, Technology and National Defense Industry, Xu Zhanbin, and a number of strategic state-owned enterprises in China's strategic industries, including China Precision Machinery Import-Export Corporation, Norinco and China Electronics Technology Group Corp. 


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