Indonesia’s Defence Procurement Strategy: Diversification but at What Cost?

Despite the pandemic, Prabowo Subianto, Indonesia’s defence minister, has been racking up the frequent flyer miles.

In the past 12 months, he has visited Russia, America, France, Austria, Turkey and South Korea.

The controversial ex-general, and twice unsuccessful presidential contender, is clearly a man on a mission: to modernise Indonesia’s armed forces (TNI) post-haste.

Recent developments have underscored the urgency of his mission. 

China’s huge fishing fleets－escorted by Chinese coast guard vessels－ have been steadily encroaching into Indonesia’s resource-rich waters, especially around the Natuna Islands. 

Although Indonesia has beefed up its military presence in the area, China remains undeterred.

In April 2021, the need to modernise the navy was tragically highlighted when its antiquated submarine Nanggala II sank off Bali with the loss of all 53 crew members.

Prabowo has focused his energies on upgrading the air force’s inventory which currently consists of fast jets manufactured in the US (33 F-16s) and Russia (16 SU-27s/SU-30s), as well as light attack aircraft from Britain, South Korea and Brazil. 

In 2018, Jakarta signed a contract with Moscow to buy 11 SU-35 fighters. Due to the threat of US sanctions on countries that buy Russian arms, that deal appears to have fallen through. 

In October 2020, Prabowo embarked on a global shopping expedition for alternative fighter aircraft. 

In the United States, he asked to buy the fifth-generation F-35 Joint Strike Fighter but was advised by the Americans that the waiting list was too long and he should instead order the fourth-generation F-16 Vipers or F-18 Super Hornets. 

In France, Prabowo kicked the tyres on Dassault’s Rafale fighters, examined some secondhand Typhoon Eurofighters in Austria and in Turkey explored the possibility of buying a multirole fighter still at the design stage.

Last month, Prabowo was in South Korea to attend the unveiling of the prototype KAI KF-21 Boramae, an indigenously built fifth-generation fighter. In 2010, Indonesia agreed to contribute funds to the development of the aircraft with a view to purchasing 50. 

Because Jakarta fell behind on its payment instalments, its role in the programme was thrown into doubt. But it appears Indonesia will remain a partner while the two sides negotiate development costs and technology transfers. 

In February, the air force announced its wish list: 35 Rafales and 36 US-built F-15 Advanced Eagle combat jets, as well as some transport aircraft.

As for the navy, in June, the defence ministry said it intended to buy six new Bergamini-class frigates and two secondhand Maestrale-class frigates from Italy.

It is also looking at purchasing additional Martadinata-class frigates from the Netherlands (the navy already has two), Mogami-class frigates from Japan, and Type-31e general-purpose frigates from the UK and two Iver Huitfeldt-class frigates from Denmark. France’s Gowind-class corvettes are also being evaluated.

Prabowo would also like to triple the number of submarines from four to 12. In March 2021, the navy took delivery of its third South Korean-designed Nagapasa-class submarine. It has an option to buy three more and is also looking at additional vessels from France or Russia. 

To pay for all this new kit, Prabowo has unveiled a staggering US$125 billion defence modernisation plan. While it’s unlikely to be fully funded, the finance ministry may approve US$40-50bn.

Indonesia’s procurement strategy of shopping around has its merits. 

It prevents over-dependence on one country. Indonesia learned this the hard way in the early 1990s after Washington imposed an arms embargo over human rights abuses in East Timor and the TNI struggled to keep its American-built aircraft in the air.

Indonesia also tries to play countries off each other to obtain the best bargain. That not only includes attractive pricing, but also part payment in commodities as well as a commitment from the seller to undertake some of the manufacturing in Indonesia to boost the country’s embryonic defence industry. 

But there are also drawbacks to Indonesia’s strategy.

Networking －getting the ships and aircraft to ‘talk to each other’ and with those on the ground－will require layers of expensive solutions such as networked datalinks and common software.

Few defence companies are willing to engage in barter trade (Russian ones will, American and European ones won’t).

Attempts to develop Indonesia’s defence industry through foreign technology transfers have been slow. So far, only a few foreign-designed warships have been built in Surabaya. 

Getting America, Russia, France and Japan to assemble military equipment in Indonesia that involves the transfer of sensitive technology will be next to impossible. 

But the biggest drawback of the strategy is that the acquisition of different platforms from multiple countries creates a systems integration nightmare for the TNI. 

Networking －getting the ships and aircraft to ‘talk to each other’ and with those on the ground－will require layers of expensive solutions such as networked datalinks and common software. Operating equipment from different countries will also require separate and costly training programmes, maintenance and upgrade schedules, and supply chains for spare parts and munitions. 

If Prabowo gets his way a decade from now, the TNI will look much stronger on paper. But its operational capabilities could be constrained as the air force and navy deal with the logistical and financial challenges of trying to operate and maintain such a diverse range of equipment. 

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