Indonesian defence: from consumer to producer

The Indonesian defence sector is poised for a period of rapid growth, as the country attempts to become more self-reliant in its manufacturing processes.

Traditionally, Indonesia has been dependent on foreign suppliers providing military equipment. This creates significant risks for national defence when supply contracts or international relations break down.

For example, the Indonesian armed forces became one of the strongest in South East Asia after the Soviet Union provided credits for military procurement during the 1960s.

However, large portions of the Indonesian air and naval fleet became useless when the Soviet Union refused to supply the necessary spare parts to maintain the equipment later that decade. 

A similar situation arose in 1991 when the US placed an embargo on military trade with Indonesia, which eventually resulted in the grounding of some of the Asian country's aircraft.

In an effort to prevent future defence shortcomings, Indonesia has increasingly looked to strengthen its domestic supply of equipment and bolster home-grown manufacturing facilities.

Building a better defence sector

Former president Susilo Bambang Yudhoyono​ set Indonesia's defence ambitions in motion five years ago, with the Minimum Essential Force (MEF) program.

The three-phase scheme aims to modernise the Indonesian military to a point where the country's defence manufacturing industry can sustain the armed forces without external support.

During the first phase, which ran from 2010 to 2014, Indonesia established a regulatory framework and organised the nation's defence industry.

This involved the introduction of the Defence Industry Law and the Defence Industry Policy Committee. The former is a political commitment to strengthening the country's military capabilities, while the latter organises how various government ministries and other agencies work together on defence projects.

Looking ahead

As the new year approaches, Indonesia is gearing up for phase two of the MEF strategy, albeit with a different government in power following the 2014 presidential elections.

The second stage could result in some exciting changes for the country's defence manufacturing industry, as national production levels increase to supplement foreign supplies.

Running from next year until 2019, the phase will be characterised by Indonesia's growing research and development capabilities, highlighted through a number of key projects.

This includes a joint venture between Indonesia and South Korea to produce the KF-X/IF-X multirole fighter aircraft, which will be utilised by both countries' armed forces upon completion.

By 2020, Indonesia will have entered the third and final phase of its MEF program. It is hoped by this time the country will have reached the technological and managerial capabilities required to run its own development programs without foreign guidance.

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