The Ministry of Finance and the President of Indonesia have agreed to increase the budget for the Ministry of Defense in 2024 by IDR 61.58 trillion, which is obtained through foreign borrowing to finance the purchase of the main weaponry system (alusista). The previous budget for the defence sector in 2020-2024 was around US$20.75 billion, but after an increase in the budget to US$25. The budget increase did not come out of the blue, but was the manifestation of a strategic plan in the defence sector (Fitri, 2024). This momentum triggers concerns about politicisation and less than maximum effectiveness of the goods being spent based on the views of the civil society coalition. Whereas the financing of equipment expenditure is the development of military posters, which ideally includes an important agenda in the defence sector. Sustainable budget support is a crucial factor considering that the fulfilment of TNI’s defence equipment includes unfinished homework in supporting the main strength of the main component in national defence. From here, the author is of the view that Indonesia needs to optimise this momentum to build the independence of the national defence industry, not just buying defence equipment from abroad. For this reason, the author will focus on three mutually supporting arguments, namely the urgency of defence industry independence, the potential and capabilities of the national defence industry, and strategies for strengthening the defence industry that can support the modernisation of the defence equipment in Indonesia.
DISCUSSION
Supporting the independence of the defence industry holds great urgency considering that until now Indonesia is still dependent on foreign defence equipment. It is stated that Indonesia’s defence industry is not optimal, which is shown by the fact that a number of types of defence equipment still depend on imported products. On average, Indonesia is ranked 17th as the largest importer of defence equipment at 1.8% of the world total. National defence equipment suppliers mainly come from the United States at 20%, the Netherlands at 18%, followed by South Korea at 16% of the total defence equipment spent through import mechanisms. Some types of strategic defence equipment that rely on imports are destroyers, fighter aircraft, missiles, rockets, as well as Unmanned Combat Aerial Vehicles (UCAV) and radars (DPRRI, 2021).
Indonesia’s dependence on foreign defence equipment has several significant impacts on foreign policy flexibility, namely limited flexibility to make political and diplomatic decisions. When the state has a dependence on foreign defence equipment, it can affect Indonesia’s bargaining position in international negotiations because the relationship with the defence equipment supplier is taken into consideration. On the other hand, dependence on imported defence equipment also puts Indonesia at risk of sanctions or embargoes from importers. In the event of political tensions, the importing country may impose access restrictions or even stop the supply of defence equipment, causing disruption to Indonesia’s defence. Procurement of defence equipment from abroad also requires fantastic costs both from direct purchase and maintenance. Dependence on foreign imports can trigger long-term financial burdens so that Indonesia is required to spend a budget in order to be able to maintain and update defense equipment systems that are foreign production.
Based on statistics on Indonesia’s defence equipment imports in the 2018-2023 period, the highest defence equipment imports occurred in 2020 worth USD 835.18 million amounting to 3.45 thousand tonnes. After 2020, there was a decline in defence equipment imports which only touched USD 311.21 million in 2022. In 2023, until May, defence equipment imports reached USD 128.18 million for the purchase of tanks and war vehicles, bombs and ammunition, and military weapons other than pistols (Ministry of Trade, 2023). This shows that Indonesia’s defence industry is getting stronger in 2023. In 2024, the independence of Indonesia’s defence industry must be further strengthened by reducing dependence on foreign countries in the modernisation of defence equipment in Indonesia. The challenge in the development of the defence industry before is the limitation and lack of budget, but in this momentum the defence industry has great potential to make the most of the large budget. The government can allocate budget funds for defence equipment expenditure to build the independence of the defence industry through efforts to optimise domestic resources.
Strengthening the independence of the national defence industry can be done by optimising the potential and capabilities of the national defence industry. Indonesia has several companies that have the potential to meet the needs of defence equipment such as PT Pindad (Persero) which is focused on land matra production and the provision of ranpur, weapons and ammunition; PT PAL (Persero) focuses on the development of sea matra and MRO, also producing warships; and PT Dirgantara Indonesia focuses on air matra by producing aircraft and helicopters. SOEs in the defence industry have a variety of superior products that are prepared to promote the independence of the Indonesian defence industry, especially in fulfilling Defence and Security Equipment (Alpalhankam) and Main Defence System Equipment. Some superior products such as CN 235-220, KRI Semarang, Maung, Communication Tactical Datalink System, and Bomb P Series (Pal Indonesia, 2023). The ability of domestic companies to create these defence equipment is a potential national defence industry capability to support independence.
Indonesia’s potential to support the independence of the national defence industry is very strong, as evidenced by the technology transfer programme that has been implemented. The existence of a technology transfer programme allows Indonesia to reduce dependence on defence equipment imports by increasing the knowledge and technical skills needed to produce and develop domestic defence systems. Technology transfer is carried out by establishing strategic partnerships with various countries that produce defence equipment with Indonesia being able to gain access to advanced technology and modernise defence equipment independently, which has the potential to support the capabilities of the national defence industry. Indonesia is known to have collaborated with South Korea in 2023 in the development of the KFX/IFX fighter jet with a project worth US$8 billion. In this project, Indonesia obtained a fighter jet technology transfer with the production of 48 fighter jets for Indonesia (KSP, 2023). The transfer programme provides opportunities for domestic companies to be involved in the design, production and maintenance of advanced and modern defence equipment.
Efforts to achieve national defence industry independence by optimising the potential and capability of domestic resources have an impact on the economy. Programmes such as the energy transfer project can support the growth of human resources with skills in defence technology. This effort also opens up new jobs in the national defence industry, creating a more complete industrial ecosystem. Optimising this potential can strengthen Indonesia in building an independent defence industry posture that supports the security and sovereignty of the country.
There are several strategies needed to strengthen the defence industry in Indonesia. These strategies can be realised through planning concrete policy recommendations such as increasing the research anddevelopment(R&D) budget in the defence sector. Greater investment in R&D can support the development of the latest innovations and technologies that are relevant to the strategic needs of the nation. Efforts to support investment in the defence sector can also be made by providing fiscal incentives. The government can implement tax policies or subsidies for companies that are investors in defence technology development projects to attract more investors to invest, thereby stimulating the growth of the national defence industry and minimising dependence on imported defence equipment. The triple helix cooperation between industry, academia and government must also be further strengthened through collaborative programmes to effectively create an innovation ecosystem (Jannah et al., 2021). Such collaborative programmes include research on modern defence equipment technology, development of human resource skills in the defence sector, and other programmes that support the strengthening of the defence industry.
The technology developmentroadmap is a crucial aspect that is considered in the strategy to strengthen the defence industry, so the author argues that there are points that must be emphasized in preparing a technology roadmap . Theroadmap must be prepared by mapping the strategic needs required for Indonesia’s defence. For this reason, it is important to analyse the type of defence equipment to be made and what technology is needed to face future security challenges. The strategic needs that have been analysed can then be identified which ones will be prioritised for development so that technological products that have a competitive advantage can be produced. Theroadmap should also include all planned partnerships with other countries, research institutions, and national industries. Collaboration can support the acceleration of technology transfer and the development of new innovations. It is also important to include clear policy support from the government in the roadmap , including a sufficiently allocated budget to support each stage of technological development in the defence industry.
The transfer of technology requires defence diplomacy as part of the strategy to strengthen the defence industry. Diplomacy is a strategic approach needed to strengthen the independence of the national defence industry. This diplomacy activity is carried out by establishing strategic partnerships with other countries that have this defence technology capacity. Cooperation can be carried out by establishing bilateral and multilateral cooperation to support technology transfer programs and human resource skills development in defence technology. Forms of cooperation that have been carried out such as bilateral cooperation between Indonesia and South Korea which established diplomatic relations for the rapid development of the Korean Fighter X and Indonesian Fighter X (KSP, 2023). In this project, there is diplomacy in political relations between the two countries and the involvement of fighter jet technology transfer that can further strengthen the national defence industry in achieving independence.
CONCLUSIONS
Based on the explanation of the arguments already mentioned, it shows that the urgency of the independence of the defence industry, the potential and capabilities of the national defence industry, and the strategy of strengthening the defence industry can support the modernisation of the defence equipment (alutsista). In the defence industry, it is very important to support independence so that Indonesia is no longer dependent on foreign defence equipment and is able to face increasingly complex geopolitical challenges. Modernisation of the defence equipment with the support of the domestic industry can strengthen the national defence posture so that Indonesia is more resilient and independent to maintain sovereignty. The long-term projection of this effort is able to increase the operational capacity of the armed forces and reduce dependence on other countries. Therefore, it is important for all stakeholders – government, private sector, industry, and academia – to collaborate and work together to create a sustainable defence system. Let us together support the independence of the defence industry by utilising potential resources wisely so that we can develop a defence strategy that supports a safe and prosperous future.
