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New Market Research Report: Indonesia Defence & Security Report Q3 2013

New Defense research report from Business Monitor International is now available from Fast Market Research


Boston, MA -- (SBWIRE) -- 07/29/2013 -- Indonesia is emerging as an important player in the Asia-Pacific region, in keeping with its status as a G20 member and as South East Asia's most populous nation. Strategically, Jakarta is also growing in stature as the driving force of the Association of Southeast Asian Nations (ASEAN) group, and as South East Asia assumes greater geopolitical importance in general. As the country's system of democracy becomes increasingly entrenched, relations between Indonesia and its neighbours - especially Australia, Malaysia and Singapore - are better than ever. Jakarta is also on friendly terms with both China and the US, unlike some other countries in the region. The outlook for domestic stability is also improving, although the threat of social strife - and of Papuan separatism - mean there are still pitfalls on Indonesia's path of reform.

After years of underinvestment and foreign vilification over its activities in East Timor, Indonesia is now starting to reap the rewards of an increasing defence budget and also of the country's improving international reputation.

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First, this means that the Indonesian armed forces are beginning to procure advanced new equipment to replace an inventory that is generally nearing obsolescence. New materiel on order includes: Boeing AH- 64D Apache Longbow attack helicopters from the United States; Sukhoi fighters from Russia; light combat aircraft from Brazilian firm Embraer; tactical transport planes which Airbus Military builds jointly with local aerospace company PT Dirgantara; a frigate from the Netherlands' Damen Schelde Naval Shipbuilding; and advanced trainer aircraft and diesel-electric submarines built by South Korean companies KAI and DSME respectively. A fast-growing defence budget has of course enabled these acquisitions, although spending has not increased at the rate that President Yudhoyono previously pledged. Yudhoyono said that spending would rise to 1.5% of GDP by the time he left office in 2014, but the budget remains stuck at the 1% of GDP mark.

Secondly, thanks to its much-improved international reputation, Jakarta is now in a position to obtain used military equipment on relatively favourable terms. Among the second-hand items that Indonesia has acquired relatively cheaply are armoured vehicles, including main battle tanks from Germany, F-16C/D fighters from the US, and C-130 Hercules transport aircraft from Australia.

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