Indonesia Still Opts for Silo Procurement over Interoperability
Diverse procurement strategies exacerbates capability gaps within and between Indonesia’s armed forces.
Indonesia proposed raising its defence expenditure to $10.6 billion (IDR165.2 trillion) for FY2025, of which nearly 42 percent will go on procurements. In election campaigning, incoming president Prabowo Subianto promised to elevate defence spending to attain a level of 1.5 percent of GDP by 2029.
Dr. Natalie Sambhi, executive director of Verve Research, told Asian Military Review: “The Indonesian parliament and related committees will continue to allocate large sums of money to the defence budget … Now that Prabowo can select both his defence and finance ministers, it’s critical that Indonesia has robust oversight in order to ensure large- ticket purchases can be afforded in the long run.”
She added, “As part of an overall modernisation process, the Indonesian Armed Forces’ (TNI) priority is to secure leading-edge military hardware from a range of reliable partners, focused on maritime defence. Some challenges related to this goal are budgetary, interoperability across varied platforms, sufficient human resources and skill levels to match the hardware, secure supply chains for sustainment and maintenance, and the needs of a predominantly land- based force.”
As guardian of the world’s largest archipelagic waters, Indonesia’s security needs are daunting. China is testing Jakarta’s resolve in the South China Sea, for example, as it impinges upon Indonesian waters near the Natuna Islands.
Dr. Alban Sciascia, director of PT Semar Sentinel Indonesia, also told AMR, “It’s important to keep in mind that Indonesia’s modernisation plan, the Minimum Essential Force (MEF), has been delayed and hasn’t been fully completed.” Indeed, the MEF introduced in 2010 was scheduled to conclude in 2024, but the air force, army and navy had only met 51 percent, 60 percent and 76 percent of their respective goals by early 2023.
Sciascia continued, “This delay is impacting priorities and is creating new challenges such as increasing capacity gaps and limited fiscal space, while the regional security environment is evolving at a pretty fast pace.”
Indonesian Air Force
The Indonesian Air Force (TNI-AU) maintains a disparate fleet of aircraft, but it is attempting to modernise them. Sciascia said: “Rafale combat aircraft and Scorpene submarines will be really important – if not essential – for the future of Indonesia, and its ability to protect its sovereign interests and deter potential aggressors.” In fact, $8.1 billion has been invested in Rafale fighters, with 42 aircraft being procured in three tranches under a 2022 agreement. The last tranche of 18 contractually entered force in January.
Sambhi shared: “For the air force, maintaining a fleet of fighter jets interoperable between each other and with partner nations will be important.” However, herein lies a serious problem. In recent times, Jakarta has expressed interest in Eurofighters, Boeing F-15s, Sukhoi Su-35s, Korean Aerospace Industries KF-21s, Dassault Rafales and Mirage 2000-5s. In August 2023, for instance, Boeing signed a memorandum of understanding (MoU) regarding a planned sale of 24 F-15EX fighters. Indonesia habitually expresses interest in new equipment, without thinking through the consequences or allocating the requisite funding.
Sciascia thus assessed: “The TNI has been facing existing challenges related to interoperability. It’s no secret that Indonesia has been focusing on procuring different equipment from different countries (as part of its diversification strategy), and that its joint operations concept is limited because of the relative inability to get all this equipment interoperating on the battlefield. This is why key concepts such as interoperability, data links and collaborative combat are getting more attention in the country, and are ranking as priorities in order to improve the TNI’s capabilities.”
Indonesia announced a contract for 12 second-hand Mirage 2000-5s from Qatar in mid-2023, but this was later scuttled. Sciascia identified this willingness to acquire gap-fillers as being problematic. “What’s the point of acquiring 20-year- old equipment when you can refurbish and/or modernise existing equipment for less money? All in all, this lack of grand strategy is also impacting the armed forces’ operational capacities and readiness…”
The country is also supposed to be a serious investor in South Korea’s KF-21 Boramae 4.5-generation fighter project, but Indonesia’s financial contributions have lapsed badly. Sciascia said, “Despite criticism of the project, its impact on the defence industry could be positive,” because of technology transfers.
Transport aircraft are also important, with state-owned PT Dirgantara Indonesia (PTDI) able to build aircraft like the CN235-220. Ongoing orders are expected for this type, plus the TNI- AU received five new Lockheed Martin C-130J-30 Super Hercules transports in 2023-24. The air force is also awaiting two Airbus A400M aircraft in 2025, to be used for troop transport, cargo movement, air-to-air refuelling and humanitarian missions. Jakarta also holds an option for four extra A400Ms.
Major capability gaps exist. New airborne early-warning aircraft were scrubbed last December in order to help pay for naval projects, while Sciascia said, “If the budget is available, increasing air-to-air refuelling capacities through Airbus A330 MRTTs will provide strategic advantage to the Indonesian Air Force in terms of power projection.”
The air force is beefing up unmanned aerial vehicle (UAV) capabilities too. Last year the TNI-AU purchased 12 Ankas from Turkish Aerospace for $300 million. Half will be assembled by PTDI under a technology transfer agreement. Indonesia also committed to buying Bayraktar TB2 UAVs in June.
In mid-2023, Thales and PT Len Industri signed a contract for 13 Thales Ground Master long-range air surveillance radars. The TNI-AU will use these GM403 radars in deployable configuration to safeguard national airspace, as its radar network is riddled with holes. Future deals are likely to replace obsolescent radars too. A month earlier, the two companies signed a joint venture agreement that includes a centre of excellence and cooperation in areas like radars and command-and-control systems.
Indonesian Army
The Indonesian Army (TNI-AD) is the dominant service, accounting for the largest proportion of the TNI’s 404,500 personnel. Sambhi pointed out that the army is responsible for humanitarian assistance and disaster relief (HADR) missions. “While one primary task is internal security, the likelihood and intensity of HADR contingencies means that equipment that best allows army personnel to respond to natural disasters and other emergencies should be prioritised. Second, equipment that better allows the army to respond to internal- security issues such as the conflict in Papua is also important. However, what’s effective in counterinsurgencies isn’t necessarily greater lethality, but also protection for ground forces.”
Indonesia has a vibrant industry producing military vehicles. In February, PT Pindad handed over 10 Harimau medium tanks; three Badak 6×6 fire support vehicles; 10 Pandur II 8×8 infantry fighting vehicles; 12 Anoa 6×6 armoured personnel carriers; and seven Komodo and 10 Maung 4×4 light tactical vehicles. Boasting a John Cockerill CMI- 3105HP turret armed with a 105mm main gun, the Harimau tank was developed in conjunction with FNSS and is now being assembled by PT Pindad. A 2019 contract covered 18 tanks, but more will be required.
PT Pindad delivered more vehicles in October: the remainder of an order for 23 Pandur IIs, the eight final Harimau tanks, nine Anoas, four Komodos and 250 Maung V3s. The TNI requires 5,000 Maungs, with PT Pindad’s production target being 1,500 vehicles annually. As for the Pandur IIs, PT Pindad and Excalibur Group signed a licensing agreement on 12 April 2019, and the 8×8 vehicles being delivered are armed with a Mk44 Bushmaster II 30mm cannon mounted in a UT30MK2 remote weapon station manufactured by Ares in Brazil. The TNI-AD still requires self-propelled air defence systems too.
In August 2023, Indonesia signed a strategic-partnership MoU with Lockheed Martin to buy 24 S-70M Black Hawks. A contract was signed last December, although the quantity may have reduced to 22 aircraft by that time. PTDI has traditionally collaborated with Airbus and Bell, so this agreement allows the aerospace company to now also cooperate with Sikorsky.
Sciascia summed up: “For the Indonesian Army, new helicopters such as S-70 Black Hawks will provide real capabilities, while the future of tanks and armoured personnel carriers can lead local industries to develop solutions to fit the needs of the armed forces. Nevertheless, while all this equipment will definitely boost Indonesian capacity and help Jakarta defend its sovereignty, it’ll be essential for decision-makers to carefully assess what the next steps are and what should be prioritised. Indeed, it’ll be necessary to take into consideration interoperability and collaborative combat concepts to make sure all future, incoming equipment can operate at maximum capacity on the battlefield.”
Indonesian Navy
The Indonesian Navy (TNI-AL) has a tough task of securing national waters, amplified by a disparate naval fleet with little commonality between designs. Sambhi pointed out: “In terms of maritime defence, ensuring the navy has robust submarine and anti-submarine warfare capabilities, particularly for deterrence and intelligence gathering, is paramount.”
Nonetheless, Jakarta’s naval aspirations are ambitious. The TNI-AL’s latest plan delineates future targets for ship categories. In its future strike force, the navy wants 12 submarines (currently it has four; note that subsequent numbers in brackets refer to existing vessel numbers), four (0) destroyers, 36 (9)
frigates, 18 (25) corvettes and 27 (21) fast attack craft. Its patrol force is seeking 42 (2) offshore patrol vessels (OPV) and 50 (47) patrol craft. These numbers clearly indicate where future programmes will focus. Incidentally, destroyers represent a completely new class for the TNI-AL.
As for the projection force, the navy is seeking four (it currently has none) landing helicopter docks, eight (5) landing platform docks and 28 (24) landing ship tanks. Finally, the support force wants six (6) tankers, six (3) hospital ships, six (0) support ships, six (11) mine countermeasures vessels, 12 (6) hydrographic vessels, three (8) training ships and six (2) If plans reach fruition, this would give Indonesia a fleet of 274 vessels, compared to the 173 it currently has.
Already on order are two Scorpene Evolved submarines with lithium-ion batteries from Naval Group. Jakarta ordered these for $2.16 billion on 28 March. To be built locally within eight years, this is a marquee programme for PT PAL. On its pathway towards a dozen submarines, the navy has already lodged a proposal to buy two more submarines from 2025-29. Chief of Naval Staff Admiral Muhammad Ali said in May, “It’s possible that there’ll be additional submarines from other countries outside of this, hopefully, if there’s a budget.” Potential vendors are France, Germany, Italy and Turkey.
However, China is also pushing an S26T originally built for Thailand and, to make the offer more alluring, Beijing is offering a Type 052D destroyer at a bargain price. Sciascia remarked that “such procurements could potentially jeopardise Indonesia’s sovereignty if – or when – a conflict erupts in the region. This lack of grand strategy and long-term assessment is concerning, as it could lead to diversified procurements, but not for what we could dub as good reasons.”
On 28 March, an Indonesian order worth $1.28 billion for two Fincantieri- built PPA OPVs was announced. However, that initial contract did not constitute a final purchase agreement, as noted by the shipbuilder: “The effectiveness of the contract is subject to the necessary authorisations from the competent authorities.” The plan was for Fincantieri to deliver two 4,900-tonne PPAs originally destined for the Italian Navy in October 2024 and April 2025 respectively. Once received, these will likely operate in Indonesia’s western waters, where the workload is high because of Chinese intrusions and innumerable illegal activities in the Malacca Strait area.
As with air force aircraft, the TNI- AL often seems more interested in collecting disparate types of vessels than in promoting commonality. PT PAL is building two Merah Putih-class Red White frigates based on Babcock’s Arrowhead 140 hull design. These 5,996-tonne frigates will be the navy’s most advanced surface combatants. This contract came into force in May 2021, with the first frigate due for completion in August 2026 and the second in 2027.
The TNI-AL has shown interest in local construction of Naval Group’s FDI frigates too. This suggests earlier plans to buy six Fincantieri FREMM frigates and two second-hand Maestrale-class frigates have dissolved.
The navy initially wants a single landing helicopter dock with a displacement of around 22,000-25,000 tonnes in the 2025-29 period. Coastal anti-ship missile systems are also on the wish list, as are new amphibious assault vehicles like the FNSS ZAHA for the marine corps.
The navy chief listed Boeing Insitu ScanEagle, Bayraktar TB2 and Bayraktar Akinci UAVs as being desirable too, as well as something like Boeing P-6 maritime patrol aircraft. The latter, based on a Bombardier Global 6500 business jet, was unveiled last year by Canadian firm PAL Aerospace. The P-6 represents a more affordable solution than the P-8A Poseidon, which Indonesia is known to be interested in.
Local shipyards build numerous vessels such as PC-40M patrol boats, landing craft, 90m OPVs and KCR-60M missile boats, reflecting the government’s desire to build domestically where viable.
Indigenous industry
Indonesia has a thriving domestic industrial base, and Sciascia explained: “There has been real progress in the past few years and an interesting policymaking process. The decision to establish a defence holding under Defend ID is salutary, as it helps to set up clear priorities and leadership over the public sector. It’ll also help in the future to prioritise key programmes and to make sure that offsets and local-content obligations are really beneficial to the whole industrial sector. While there are quite some hopes for the future, it’s also important to note that it’ll be essential for the domestic public defence sector to work fully with the private sector. For years, public companies – especially those that are part of Defend ID – have been the primary recipients of government funding and been involved in priority programmes.” Simultaneously, the private defence sector has historically been restricted to distributing products.
Defend ID comprises five state- owned entities: PT Len Industri, PT PAL, PTDI, PT Pindad and PT Dahana. Last year, Defend ID’s financial performance improved, with contract growth up 29.7 percent compared to 2022. Additionally, revenue rose 27.9 percent to $1.6 billion (IDR25.22 trillion), and net profit was up 56 percent. Defend ID’s President Director Bobby Rasyidin commented midyear, “This shows a very positive performance, where not a single entity in Defend ID had a negative financial or operational performance.” From 2019- 24, Defend ID received more than 160 defence equipment contracts.
Sciascia added: “Nowadays, some companies such as PT Infoglobal Teknologi Semesta or PT Sentra Surya Ekajaya are able to fully produce quality defence equipment and/or components. This extended cooperation between Defend ID and its subsidiaries, and the private sector – mainly composed of SMEs – will be essential to increase and strengthen the defence sector’s industrial maturity to ensure maximum distribution of the benefits from offsets and local content requirements.”
Sambhi highlighted one reason for the nation’s maturing defence industry: “Credit for Indonesia’s progress in developing its indigenous defence industry capacity are the legislative requirements for technology transfer and investment. That has helped normalise a focus on domestic capacities and infrastructure, rather than allowing it to be an ad hoc process.”
Yet Indonesian procurement processes can be haphazard, swayed by competing influences such as defence ministers, advisors, the TNI, MoD and vested defence industry interests. Sambhi explained: “Some procurements have been shaped by military modernisation plans, first articulated by the Minimum Essential Force, but it’s difficult for the public to see how purchases match up with the strategy given the absence of a defence white paper for the past decade.”
