05 July 2012
Revitalizing Indonesia’s Defence Industrial Base: Agenda for Future Action
Abstract
Despite robust official statements and foreseeable opportunities for Indonesia’s defence modernization, the capacity of its defence industrial base capabilities remain low. The Indonesian government still has much to do to resolve a number of hindrances. To develop a viable defence industrial base, this report argues that Indonesia needs a well-defined defence policy and broad industrial development strategy. It should concentrate on developing dual-use technologies, adopt an industrial clusters model, and reinforce defence-related R&D capacity through technological offsets or international arms collaboration. The paper concludes with seven policy recommendations. First, Indonesia’s defence spending must be increased significantly. Second, it must adopt a well-defined and coherent defence policy. Third, Indonesia needs to establish a broad industrial development strategy. Fourth, for a viable defence industrial base, the Indonesian government should consider the adoption of an industrial and technological clusters model. Fifth, Indonesia should work out a flexible rather than a rigid bureaucratic offset policy. Sixth, the Indonesian government must commit adequate resources to reinforce its defence-related R&D capacity. Seventh, Indonesia needs to engage in international arms collaboration.
Abstract
Despite robust official statements and foreseeable opportunities for Indonesia’s defence modernization, the capacity of its defence industrial base capabilities remain low. The Indonesian government still has much to do to resolve a number of hindrances. To develop a viable defence industrial base, this report argues that Indonesia needs a well-defined defence policy and broad industrial development strategy. It should concentrate on developing dual-use technologies, adopt an industrial clusters model, and reinforce defence-related R&D capacity through technological offsets or international arms collaboration. The paper concludes with seven policy recommendations. First, Indonesia’s defence spending must be increased significantly. Second, it must adopt a well-defined and coherent defence policy. Third, Indonesia needs to establish a broad industrial development strategy. Fourth, for a viable defence industrial base, the Indonesian government should consider the adoption of an industrial and technological clusters model. Fifth, Indonesia should work out a flexible rather than a rigid bureaucratic offset policy. Sixth, the Indonesian government must commit adequate resources to reinforce its defence-related R&D capacity. Seventh, Indonesia needs to engage in international arms collaboration.
