Podcasts

Consideration needs to be given to CTLCO (Countertrade, Local Components, and Offsets) programmes within defence spending which can benefit all parties, including local actors. In this sense, the government has a significant opportunity to evaluate the potential economic value that can be obtained from defence spending, which can also support the development of industrial sectors in the area and embrace local communities amid the current economic difficulties.

In our webinar titled “Defence Industry Impact on Local Government and Communities”, Wildan Arief, highlighted that PT Dirgantara Indonesia strives to contribute strongly from the knowledge side, where the high-tech industry serves as a learning centre for students and the surrounding community. Furthermore, PT Dirgantara Indonesia can participate in improving the regional economy in three ways, including by creating jobs, expanding new business opportunities for local residents, and increasing the growth index in the industrial area.

In our webinar titled “Defence Industry Impact on Local Government and Communities”, Maj. Gen. (Ret.) Jan Pieter Ate, argued that the contribution of the defence industry towards regional governments could be in the form of security and stability for the local administration and communities. Furthermore, the central government could communicate with the regional authorities, in terms of domestic defence industry capability, so that the local authorities can have a role in the development of the defence industry.

In our webinar titled “Defence Industry Impact on Local Government and Communities”, Kukuh Tri Sandi, argued that the East Java Regional Development Planning Agency (Bappeda) supports the development and modernisation of the defence industry through human resource capacity building. A number of ways to do this is by increasing the competitiveness in vocational schools and training centres.

In our webinar titled “Defence Industry Impact on Local Government and Communities”, Andreas Wangsanegara as the Director of PT Pudak Scientific, highlighted that the company’s contributions to the local economy are by creating and using skilled labour, providing job opportunities, internships, as well as conducting joint research with educational institutions, thus producing high-value added output.

In our webinar titled “Defence Industry Impact on Local Government and Communities”, Alman Helvas Ali, stated that Indonesian defence industry has a lot of potential to increase its contribution to the national economy, including high-tech mastery, a small number of defence or non-defense industries that are part of global supply chains, and how to create a domestic supply chains.

Jakarta’s concerns regarding the proliferation of nuclear-powered submarines, might be directed to the establishment of the AUKUS (Australia, United Kingdom, United States) alliance and Canberra’s plan to acquire nuclear-powered submarines. However, it is also important to take into consideration the evolution of the security environment, especially in the Indo-Pacific region, where tensions in the region have continued to rise in recent weeks. At the same time, Indonesia also needs to operate major weapons systems that have a deterrent effect, in order to protect its sovereignty and national interests.

In our latest webinar, Ristian Atriandi Supriyanto, stated that Indonesia’s strategic environment has become increasingly complex with the emergence of AUKUS (Australia, United Kingdom, United States) and QUAD (Quadrilateral Security Dialogue) alliances, as well as competitive interactions between superpowers in the Indo-Pacific region. M. Supriyanto argued that the most obvious impact is the increasing density of foreign military traffic passing through Indonesian territory, including nuclear-powered submarines.

In our latest webinar, Col. Agung Karyanto, highlighted that Indonesia would continue upholding its commitment of zero-nuclear policy, including to not develop nuclear energy for military purposes, when dealing with the evolution of security context in the Indo-Pacific region. In terms of nuclear-powered submarine proliferation, M. Karyanto argued that Jakarta would need to address the issue through ‘special’ policy.

In our latest webinar, Alman Helvas Ali, stated that diesel-electric submarines have limitations in terms of endurance compared to nuclear-powered submarines. However, the former still have advantages over nuclear-powered submarines, especially in terms of noise from machinery vibrations. Such cases can be seen from the naval fleets of developed countries such as the United States, where they are not only relying on passive sonar to detect diesel-electric submarines, but they are also using low frequency sonar arrays.

In our latest webinar, VADM Muhammad Ali, highlighted that the Indonesian government should choose and implement the right strategy in dealing with threats or possible intrusions – including other country’s submarines – especially noting its geographical conditions. Furthermore, with the escalation of tension in the South China Sea, nuclear-powered submarines passing through the area become one of Indonesia’s main concerns.

Curie Maharani Savitri explained that the reasons preventing Indonesia from embracing an A2/AD posture are not only due to the failure of obtaining the necessary technology, but also politically based. The posture to be adopted in the coming months will also depend on how the government will ponder over the AUKUS alliance.

Novan Iman Santosa argued that even though Indonesia has no intention of surveying the South China Sea, long-range capabilities are a necessity to conduct continuous and efficient patrols across the country.

Alman Helvas Ali reasoned that whether threats originate from AUKUS and/or China, Indonesia ought to modernise its forces, and particularly the navy by obtaining adequate submarines and major surface combatants.

In our latest webinar, Dr. Ir. Jupriyanto stated that a country must be careful when building its domestic defence industry as it will have a significant impact on the nation’s geostrategic position. In the case of Indonesia, M. Jupriyanto added that Jakarta needs a strong military power with sophisticated defence technologies to support its geostrategic position. To obtain these technologies, M. Jupriyanto argued that the government must also develop other sectors, including component manufacturers, which would eventually support the whole defence industry ecosystem.

In our latest webinar, Rangga Jantan Wargadalam of the Ministry of National Development and Planning revealed that the function of the defence industry is not only to build defence capabilities but also to contribute to the country’s economic growth through job creation and investment in national industries. Countries with higher defence spending, especially the developed ones, focus on developing the quality of their human capital, technology, and infrastructures, which eventually create a ‘safe’ and ‘encouraging’ environment for investment.

In our latest webinar, Maj. Gen. (Ret.) Jan Pieter Ate argued that Indonesia, as one of the largest militaries in Asia and even in Southeast Asia, is in dire need of Foreign Direct Investment (FDI) to fulfill its equipment and weapons requirements, especially since many are old and obsolete. By attracting FDI, M. Ate stated that Indonesia could create more value for its defence industry, such as by being a regional production hub and part of a global supply chain.

In our latest webinar, Alman Helvas Ali emphasised that Indonesia’s defence industry sector is open to foreign direct investment (FDI) with some restrictions on capital ownership. Nonetheless, based on the experience of other countries, such as India, Australia, the Philippines, as well as Thailand, ownership restrictions are not a factor that determines the success or failure of FDI in the defence industry. M. Ali further argued that in order to attract FDI, Indonesia must be able to overcome the challenges that the country often faces such as export licence and budget constraints.

The progress of the Minimum Essential Forces (MEF) has reached 62% until 2021, but is predicted that it will not be able to meet the target of 100% by the end of 2024. In fact, the Commander of the Indonesian National Armed Forces (TNI), Gen. Andika Perkasa, also stated that the modernisation progress will only reach 70% by 2024, due to various factors which eventually hinder the MEF plan.

In our latest webinar, Alman Helvas Ali reminded that the Indonesian government should have backup plans for its National Armed Forces (TNI) modernisation. M. Ali also highlighted the importance of focusing on the right priorities due to budget constraints, which could hinder procurement programmes.

In our latest webinar, Brig. Gen. Oktaheroe Ramsi stated that Indonesia’s defence posture and modernisation plan is focused on developing the Indonesian National Armed Forces (TNI) strength. However, the modernisation of the armed forces, especially long-term planning, cannot be implemented quickly due to numerous considerations involving all levels of government.

In our latest webinar, Curie Maharani Savitri argued that amidst limited fiscal capacity, Indonesia’s national armed forces modernisation plan should be based on cost-effective solutions. For example, the French (Defence) Research and Development Agency, operates a dedicated division that monitors technological advancement in the commercial sector. Once there is a technology that has the potential to be developed into defence technology, they will try to develop and support it even if it is not 100% mature.

Despite showing progress in domestic economic recovery, Indonesia is still facing turbulences such as the war in Ukraine, which is affecting the global commodity prices. Through the National Armed Forces (TNI) modernisation program, the domestic defence industry is expected to contribute to the post-pandemic economic recovery thanks to defence equipment procurement programmes.

In our latest webinar, Alman Helvas Ali argued that political aspects are essential in weapons procurement deals and decision-making process. M. Ali also stated that Indonesia should procure defence equipment in large quantities in order to maximise the technological and economic benefits of the acquisition program.

In our latest webinar, Maj. Gen. (Ret.) Jan Pieter Ate argued that without sufficient budget allocated for the National Armed Forces (TNI) modernisation program, Indonesia might not be able to achieve its objective of a self-reliant defence industry. In addition, Indonesia should reduce the acquisition of foreign-made equipment to support the development of the Indonesian defence industry.

Novan Iman Santosa, an editor for The Jakarta Post, stated in our latest webinar that it should be mandatory for public institutions requiring land or air assets to carry out their duties to prioritise domestic-made equipment. M. Santosa also argued that Indonesia should be able to balance production for commercial and strategic use should the country wish for defence autonomy.

For Indonesia, the concept of strategic autonomy is not unknown due to the country’s free and active international relations policy, which allows it to procure arms from diverse trading partners. Moreover, Indonesia’s armed forces modernisation plan through offset and Transfer of Technology programs could accelerate the country’s ambition for strategic autonomy. Nevertheless, Indonesia must stay vigilant in choosing the ‘right’ trading partners, especially during times of crisis, to avoid foreign policies inconsistencies from its partners.

In our last webinar, Maj. Gen. (Ret.) Jan Pieter Ate argued that to achieve strategic autonomy, Indonesia should procure more local arms compared to imported ones, especially with the ratio of imports and local supply being 83% and 17% respectively, during the COVID-19 pandemic. M. Ate also noted that the key to Indonesia’s independence in arms procurement is to empower the local defence industry.

The Founder and Executive Director of Verve Research, Natalie Sambhi, stated in our latest webinar that Indonesia’s strategic non-alignment creates several strategic opportunities for the country in the Indo-Pacific region, notably to show leadership and build security consensus in the region.

In our latest webinar, Alman Helvas Ali explained that Indonesia is currently seeking cooperation with Turkey and France to improve its defence capability. However, France is a more favourable option as its arms procurement offers more benefits in terms of technology and financial profit.