Fixing Indonesia’s Defence Investment Climate

On November 2-5, Indonesia will hold the 2022 Indodefence expo, which is said to be one of the largest defence exhibitions in Southeast Asia. The event will not only provide opportunities for Jakarta to explore the most suitable weapons systems for the Indonesian National Armed Forces (TNI), but will also become a challenge for the government in proving its commitment to modernise the TNI and revitalise the defence industry sector. Nonetheless, to meet the Ministry of Defence’s target on the last phase of the strategic plan (Renstra), concerns and questions have been raised regarding the implementation of weapons procurement deals that have been signed.

As a matter of fact, a number of procurement and development agreements are still in limbo, including major weapon systems, such as submarines. Such delays and uncertainties – including budget constraints – might pose risk on the overall defence investment climate in Indonesia, which might discourage foreign suppliers. Given this, how would Jakarta continue its modernisation plan, while also secure its partnership with foreign suppliers amid such concerns?