Pindad Hopes to Cash In on Rising SE Asia Defense Spending
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Cindy Silviana & Eveline Danubrata on 11:03 am Mar 17, 2015
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south china sea dispute
President Joko Widodo visiting the state arms manufacturer Pindad, in Bandung on Jan. 12, 2015. (Antara Photo/Andika Wahyu)
Jakarta. Indonesian state-owned defense firm Pindad expects sales of its machine guns, armored vehicles and other military hardware to increase by 30 percent annually, due in part to rising tensions in the South China Sea, its chief executive said.
Spurred by tensions with China, Indonesia and other Southeast Asian nations are building up their defense industries, channeling fast-growing military budgets to develop local expertise.
“In Southeast Asia, there is no agreement among countries to safeguard each other’s sovereignty yet,” Pindad CEO Silmy Karim told Reuters at the company’s headquarters, located around 120 kilometers from the capital Jakarta. “We have a gap to chase, so the growth potential for the regional defense industry is quite high.”
Pindad, which partners with companies from Germany, Belgium and Italy to develop its military technology, expects sales of 3 trillion rupiah ($227 million) this year, up from 1.9 trillion in 2013. Last year’s sales have not yet been disclosed.
Pindad plans to start marketing its new amphibious armored and cannon-equipped vehicles next year, targeting Southeast Asian markets, the Middle East and Africa.
The company needs at least 5 trillion rupiah in investment in the next three years to boost production and improve its technology. Pindad hopes most of the investment will come from the government, which recently provided a cash injection of 700 billion rupiah, Karim said.
“If we build our defense strength by producing, then that is real strength. That is part of the government’s concept going forward, that we have to build the independence of our defense industry,” Karim said.
Pindad Hopes to Cash In on Rising SE Asia Defense Spending - The Jakarta Globe
Joint commands to develop gradually: Jokowi
Ina Parlina, The Jakarta Post, Jakarta | National | Wed, March 18 2015, 6:13 AM
National News
The government pressed ahead on Tuesday with its plan to improve the Indonesian Military (TNI) and mulled a plan to form defense groups under joint forces (Kogabwilhan) designed for flexible and rapid troop deployment.
President Joko “Jokowi” Widodo held a limited Cabinet meeting on Tuesday to discuss the modernization of the TNI and the National Police.
The meeting also mulled the idea of bringing back the position of deputy TNI commander, a post which was scrapped by former president Abdurrahman “Gus Dur” Wahid in 2000, as well as the possibility of a defense-budget increase and a plan to improve the welfare of military personnel.
TNI commander Gen. Moeldoko said Jokowi reiterated his support for Kogabwilhan, but said “it should be done gradually”.
Late last year, Jokowi agreed to continue with a TNI plan for the formation of Kogabwilhan, which was actually raised in 2008 under the leadership of Jokowi’s predecessor, Susilo Bambang Yudhoyono, who failed to issue a regulation endorsing the formation of the new structure.
The plan will integrate the regional resources of the Army, the Navy and the Air Force into multi-service groups that will be positioned at certain defense flashpoints integral to preserving the country’s territorial integrity and sovereignty. Each Kogabwilhan group will be equipped with its own fleet of warships, jet fighter squadrons and Army units. Each group’s commander, a three-star general, will be given the authority to respond without having to go through red tape at the TNI headquarters in Jakarta.
“We will probably establish a first Kogabwilhan, [then] later we will continue with building the second and the third,” Moeldoko said, adding that Kogabwilhan would ensure the TNI acted dynamically in responding to any security situations.
Moeldoko also said the idea of bringing back the deputy TNI commander would enable the TNI to act faster in responding to security situations should the TNI commander be absent.
“It [the deputy post] was once implemented. The organization of the TNI is all about how to act. It is expected that the deputy TNI commander can act [on behalf of the TNI commander] should the TNI commander be absent,” he said.
Defense spending — which is currently set at Rp 102 trillion (US$7.7 billion) — will only be increased to around Rp 190 trillion by 2017, if the economy has grown by 7 percent, Moeldoko added.
Coordinating Political, Legal and Security Affairs Minister Tedjo Edhi Purdijatno said the meeting also covered improving weaponry systems and recruitment mechanisms for the TNI and police personnel.
However, Tedjo said such a plan of having a deputy TNI commander needed further study, arguing that “it needs more infrastructure and personnel, among other things”.
Cabinet Secretary Andi Widjajanto said the meeting also discussed a plan to prepare a presidential regulation on such a TNI reorganization.
“In terms of regulations, the presidential regulation on TNI organization will be produced in 2015. But, in terms of the implementation, it will be conducted gradually until 2019,” he added.
Jokowi also recently set a target to improve the capacity of the TNI and defense industry not only to meet the country’s Minimum Essential Force (MEF) targets, but also to transform it into a force to be reckoned with in the region.
In a bid to improve the country’s obsolete weapons system, the government earlier implemented a plan to realize the military’s MEF blueprint for achieving an independent defense industry by 2024.
Jokowi has identified four main priorities for the country’s defense policy, including efforts to develop the military to become a well-respected force, to reach self-sufficiency in defense equipment, to meet the country’s defensive needs and to make defense policy part of a comprehensive approach to security.
During the recent annual meeting of police and military leaders in Jakarta, Jokowi reminded the leaders of the National Police and the TNI about their roles in ensuring national security, a situation that would support the pursuit of the country’s economic development goals.
See more at:
Joint commands to develop gradually: Jokowi | The Jakarta Post
