Indonesia Defence and Security Report Q1 2012
Business Monitor International, January 2012, Pages: 114
Indonesia Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Indonesia's defence and security industry.
Indonesia found itself at the heart of Asian – if not world – diplomacy in November 2011, as Bali played host to back-to-back gatherings of world leaders: the Association of South East Asian Nations (ASEAN) Summit and the East Asia Summit (EAS). The two events assumed particular importance in 2011, with China’s relations with its neighbours and the United States’ re-engagement with the Asia-Pacific dominating the agenda. For Indonesia the summits were therefore a significant opportunity to assert its status as a key player in South East Asian diplomacy and stability.
Indeed, Indonesia successfully took this opportunity on several different fronts. On the key issue for ASEAN of whether to allow Myanmar to hold the group’s rotating chair in 2014, Indonesia’s role was decisive. Indonesian Foreign Minister Marty Natalegawa visited Myanmar ahead of the ASEAN Summit to assess the country’s ongoing reform process, and his report – which stated that in his view real progress was being made – was central to ASEAN’s decision to hand Myanmar its turn as chair. Indonesian support for Myanmar – with Jakarta now regarded as a pillar of democracy in South East Asia having made the kind of transition from authoritarianism that Myanmar is now embarking upon – will be crucial in lending international credibility to the country’s reforms.
Indonesia’s measured reaction to one of the major talking points of the EAS – the US agreement with Australia to begin basing Marines, aircraft and naval vessels in Darwin – was also diplomatically important. With China expressing concern over the move, Indonesian officials were more equivocal, pointing out that while they too were concerned about the new base’s impact on regional stability but also that the presence of the US Marines could lead to multilateral training opportunities that could boost ties between regional militaries. Jakarta is also understood to regard the US as a stabilising force in the region. Perhaps in order to reassure Indonesia of their friendly intentions, both Australia and the US offered assistance in Jakarta’s efforts to modernise its outdated military. In November, Canberra announced that it was donating four C-130 Hercules transport aircraft – a capability that Indonesia desperately needs – worth US$30mn to the Indonesia armed forces. And in October, the Indonesian House of Representatives agreed to a request from the military to accept a US offer of 24 second-hand F-16 fighter aircraft. Party politics had briefly held up the deal, with the some lawmakers opposing the deal on the grounds that it would increase Indonesia’s military dependence on the US. However, this obstacle was soon overcome as the House recognised that offers of this sort could not be turned down given the daunting challenge of replacing the military’s inventory of largely defunct equipment. Under the terms of the agreement, Jakarta will pay US$750mn to have the F-16s upgraded in the US ahead of delivery.
However, Indonesia’s most pressing internal security problem, the status of Papua and the islanders’ calls for independence, did not near any resolution in the latter part of 2011. A clash between police and armed men thought to have been associated with the Free Papua Movement resulted in eight deaths in November; in October, security forces killed six people taking part in a pro-independence meeting.
Though the country’s Commission for Human Rights responded to the deaths by calling for the government to withdraw troops from Papua as a goodwill gesture that would help to initiate peace talks, and despite expressions of concern from the US and Australia, Jakarta has shown no indication that it plans to drop its military-led strategy. Amid a heightened state of security in Papua, there was some hope in the appointment by the president of a new special envoy to begin a dialogue with the Free Papua Movement and other stakeholders. However, the larger peace initiative that President Yudhoyono has promised throughout his time in office, and the curbing of the military’s excesses in Papua, have yet to be set in train.
Instability in Papua currently poses the greatest threat to Indonesia’s security, with the province experiencing widespread violence, as well as peaceful independence protests, during August. President Yudhoyono’s offer of dialogue with Papuan leaders needs to be followed up with urgent action, as the extra-constitutional activities of the Indonesian armed forces in the province continue to provoke its inhabitants and also stoke the long-running insurgency waged by the Free Papua Movement.
In light of events in Papua, where the TNI has been accused of conducting illegal surveillance operations, the introduction of a new intelligence bill to the Indonesian parliament in June raised hopes that the Yudhoyono administration would finally advance the country’s stalled security sector reforms. Though the proposals have met with opposition, the country’s military intelligence services could come under tighter civilian control as a result of the changes.
The imprisonment of Jemaah Islamiyah’s (JI’s) spiritual leader Abu Bakar Bashir in June was arguably the high watermark of Indonesia’s campaign against Islamist terror networks in the South East Asian region. However, while the threat from JI appears greatly diminished in its traditional form, the government is concerned about growing numbers of young men who risk being radicalised at Islamic boarding schools or over the internet.
However, the government’s failure to clamp down on growing religious intolerance in Indonesia appears to run counter to its hopes to curbing Islamism. In particular, harsh sentences handed down to members of the Ahmadiyah religious sect for actions portrayed in most reports as self-defence in the face of attacks by Muslim groups led to widespread allegations that the country was at risk of betraying its founding principle of religious equality.
Executive Summary
SWOT Analysis
Indonesia Security SWOT
Indonesia Defence Industry SWOT
Indonesia Political SWOT
Indonesia Economic SWOT
Indonesia Business Environment SWOT
Global Political Outlook
Global Hotspots: Eurozone, MENA, Afghanistan And Korea
Table: Election Timetable, 2012
United States
Latin America
Western Europe
Central, Eastern And South-Eastern Europe
Russia And The Former Soviet Union
Middle East And North Africa
Sub-Saharan Africa
Asia
Wild Cards To Watch
South East Asia Security Overview
South East Asia In A Global Context
Challenges And Threats To Stability And Security
Sino-US Rivalry In South East Asia
The Outlook For South East Asia
Political Risk Analysis – Sino-US Power Struggle
Chinese Influence In Asia: A SWOT Analysis
US Influence In Asia: A SWOT Analysis
Table: Asian States And Their Relationships With China
Emerging Geopolitical Patterns
Security Risk Ratings
BMI’s Security Ratings
Table: Asia Pacific Regional Security Ratings
Table: Asia Pacific State Vulnerability To Terrorism Index
Indonesia’s Security Risks
City Terrorism Rating
Table: BMI’s Asia City Terrorism Index
Political Overview
Domestic Politics
Long-Term Political Outlook
Security Overview
Internal Security Situation
Table: Indonesia’s Insurgent Groups
External Security Situation
Armed Forces And Government Spending
Defence Budget
Army
Navy
Air Force
International Deployments
Weapons Of Mass Destruction
Market Overview
Industry Trends And Developments
Competitive Landscape
Table: Key Players In Indonesia’s Defence Sector
Arms Trade Overview
Procurement Trends And Developments
Industry Forecast Scenario
Armed Forces
Table: Indonesia’s Manpower Available For Military Services, 2009-2016 (aged 16-49)
Defence Expenditure
Table: Government Defence Expenditure, 2010-2016
Table: Defence Expenditure Scenario – Changing % Of GDP, 2011-2016 (US$mn)
Defence Trade
Table: Indonesia’s Defence Exports, 2009-2016 (US$mn)
Table: Indonesia’s Defence Imports, 2009-2016 (US$mn)
Table: Indonesia’s Defence Trade Balance, 2009-2016 (US$mn)
Key Risks To BMI’s Forecast Scenario
Macroeconomic Forecast
Table: Indonesia – Economic Activity, 2011-2016
Company Profiles
PT Dirgantara Indonesia (IAe)
PT Pindad
PT Penataran Angkatan Laut (PAL)
Country Snapshot: Indonesia Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2000-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2010 (US$)
Table: Average Annual Manufacturing Wages, 2000-2012 (IDR)
BMI Methodology
How We Generate Our Industry Forecasts
Defence Industry
City Terrorism Rating
Table: Methodology
Sources
- PT Dirgantara Indonesia (IAe)
- PT Pindad
- PT Penataran Angkatan Laut (PAL)
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