Indonesia and Asian Security


Indonesia is a key player in shaping the future of Asian security.  With significant security challenges due to its geography, topography and maritime character, a key element will be shaping capabilities for lift, and maritime patrol capabilities.

An insightful perspective on why and how Indonesia is shaping its capabilities was provided late last year by Ristian Atriandi Supriyanto.

If in the 20th century US warships were the ones mainly transiting these sea lanes, in the 21st there will be Indian and Chinese as well. Incidents in these waters have the potential for adverse global consequences, which would require other stakeholders to intervene. The US Navy has been given de facto consent to patrol the world’s major shipping routes; but China and, to some extent, India have yet to give their fiat. Moreover, the direct presence of US warships could add fuel to regional tensions, including the South China Sea disputes. Hence, the best solution remains to accommodate and increase the participation and capacities of regional navies.

Being the largest Southeast Asian state and a geographically maritime country, Indonesia can spearhead such efforts.

First, regional confidence-building measures (CBMs) must be unswervingly and consistently pursued. Strategic-level CBMs, such as the ASEAN Regional Forum (ARF), ASEAN Maritime Forum, or the Singapore Shangri-La Dialogue, must be complemented with operational-level navy-to-navy talks, such as the Indian Ocean Naval Symposium (IONS) and Western Pacific Naval Symposium (WPNS). Such measures could also include naval exercises involving members of ASEAN and the ARF aimed to promote friendship among navies. Indonesia can actively participate in all these measures.

Second, maritime domain awareness must be enhanced. Maritime surveillance radars, satellites and sonar should come as part and parcel of Indonesia’s naval modernization. Indonesia must also welcome foreign direct assistance in providing maritime surveillance facilities and infrastructure. US assistance of integrated maritime surveillance systems in the Malacca Strait and Sulawesi Sea constitutes such a measure. But, without continuing and complete provisions of maintenance and support, this will just be a drop in the ocean.

Third, the principle of “armed neutrality” must guide Indonesia’s geostrategy. Indonesia must always strive to maintain regional peace and stability, actively promote good order at sea and friendship among nations, but doing so must not be at the cost of national sovereignty and the right to self-defense. The Indonesian Navy (TNI-AL) must be provided with the capabilities for forward presence in the Indian Ocean and western Pacific to notify and escort other warships transiting through Indonesian waters.

Such capabilities lie not in light naval platforms — like fast attack craft — but large and versatile ones, such as corvettes, frigates and destroyers. Therefore, the proposal to build at least 10 light frigates must be viewed as a necessary survival kit for Indonesia to remain afloat in the increasingly crowded waters of Asia.

A400M and C-295 Flying in Formation Credit: Airbus Military

Adding the ubiquitous C-295 to the force is a good idea for the Indonesians and builds on their historic relationship with CASA.  The CN in CASA products meant that the N was there because its stands for Indonesia and the many planes built with CASA in the past.

Now with a new contract launch, Airbus Military the successor of CASA is shaping a new relationship with Indonesia and providing for future capabilities.

According to the Airbus Military press release (February 15, 2012):

Airbus Military has signed today a firm contract with PT Dirgantara Indonesia (PT DI) to supply nine C295 military transport aircraft for delivery to the Indonesian Ministry of Defense. The contract between PT DI and the Ministry of Defense of Indonesia was signed simultaneously, witnessed by Minister of Defense, Prof. Dr. Purnomo Yusgiantoro, and the Chief of Armed Forces, Admiral Agus Suhartono, at a ceremony at the Singapore Airshow. The Indonesian designation of the aircraft will be CN295.


The aircraft will be operated by the Indonesian Air Force throughout the vast territory of Indonesia, which includes around 17.000 islands. The aircraft will perform a variety of roles including military, logistical, humanitarian and medical evacuation missions. The first delivery is foreseen in 2012 and by summer 2014 all aircraft will have been delivered.

Additionally, the industrial plan covers a substantial collaboration between PT DI and Airbus Military for the C295 program, including the manufacturing of the tail empennage, rear fuselage and fuselage panels, as well as work packages for the development of Computer Based Training systems and the creation of a service and delivery centre and a final assembly line (FAL) in Indonesia.

As David Donald has noted:

Airbus Military has embarked on a major program to assist the Indonesian aerospace industry expand its capabilities and to put the plane-maker PT Dirgantara Indonesia (DI – Indonesian Aerospace) back on its feet after suffering heavy losses accumulated after the Asian economic crisis in the late 1990s. In October the two companies signed a teaming agreement defining the initiatives of the initial 18-month phase of the recovery plan, following a strategic collaboration agreement signed last July.

For Airbus Military (Booth G53a) the deal establishes Indonesia as its marketing and production base for expansion in the Asia-Pacific region. That expansion does not just cover the smaller transport aircraft, but could include the A330 MRTT tanker/transport and A400M airlifter as well. For PT DI the agreement allows Airbus Military in to oversee the implementation of more modern processes as the Indonesian company strives to return to profitability.

For our look at how these aircraft fit into a re-crafted Pacific strategy please see

For a report on the Indonesian market space please look at the ICD report available for sale here

The Indonesian defense market, estimated to value US$3.7 billion in 2009, is expected to grow at a CAGR of 12.85% to reach US$7.6 billion by 2015. The primary stimulator of defense expenditure is the government military modernization program, undertaken in order to compensate for the severe military underfunding over the last five years. It is currently estimated that the defense budget is capable of satisfying only 52% of required military defense expenditure. Indonesia is frequently affected by natural disasters for the majority of which the army is deployed on search and rescue operations. In preparation for future natural disasters, government expenditure is expected to increase in defense sectors during the forecast period.


Indonesia’s geographical make-up comprises of over 17,000 islands, and the existence of a border dispute with Malaysia is another factor fueling defense investment. In addition, there has been an increase in criminal activity such as illegal fishing, illegal logging, human trafficking, pirate attacks, and arms smuggling along the Indonesian coast.


Over the review period, the country’s defense expenditure was 0.8% of GDP (gross domestic product), a trend which is expected to continue until 2015. During the forecast period, GDP is expected to grow at an average of 9%, and defense expenditure increase accordingly. Capital and revenue expenditure followed a 35% and 65% allocation respectively of the overall defense budget. However, as a result of government plans to modernize the military through the acquisition of the latest weaponry, capital expenditure is expected to be an average of 38% of the total defense budget, with the remainder allocated for revenue expenditure.


Defense sectors such as patrol vehicles, submarines, military transport aircrafts, trainer and fighter aircrafts, unmanned aerial vehicles, radar systems, and warships are expected to present key market opportunities.