Future of the defense industry under a new leader

<div align="center"> <table border="0" cellpadding="0" class="MsoNormalTable" style="mso-cellspacing: 1.5pt; mso-yfti-tbllook: 1184; width: 636px;"> <tbody><tr style="height: 38.25pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0; mso-yfti-lastrow: yes;"> <td style="height: 38.25pt; padding: .75pt .75pt .75pt .75pt; width: 474.15pt;" valign="top" width="632"> <h1 style="margin-top: 0cm; tab-stops: center 236.3pt left 379.35pt;"><span style="color: windowtext; font-family: "Times New Roman","serif"; font-size: 13.0pt;">      </span><span style="color: windowtext; font-family: "Times New Roman","serif"; font-size: 20.0pt;">Future of the defense industry under a new leader<o:p></o:p></span></h1><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin: 0cm; text-align: center;"><span style="font-family: "FranklinGothic-ExtraCond","sans-serif"; font-size: 14.0pt; mso-bidi-font-family: FranklinGothic-ExtraCond;">Muhamad Haripin  ;</span>  <span style="font-size: 12.0pt;"> </span><i><span style="background: white; font-family: 'Times New Roman', serif; font-size: 13pt;">A researcher at the Centre for Political Studies, Indonesian Institute of Sciences (LIPI), Jakarta;  Author of Reformasi Sektor Keamanan Pasca Orde Baru (Post-New Order security sector reform), 2013 </span></i><i><span style="font-family: 'Times New Roman', serif; font-size: 13pt;"><o:p></o:p></span></i></div></td> </tr></tbody></table></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin: 0cm; text-align: center;"><b><i><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt;">JAKARTA POST,  17 Juli 2014<o:p></o:p></span></i></b></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin: 0cm; text-align: center;"><b><i><span style="color: #c00000; font-family: "Times New Roman","serif"; font-size: 12.0pt;"> </span></i></b><b><i><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt;">                                               </span></i></b></div><div align="center" class="MsoNormal" style="margin-bottom: .0001pt; margin: 0cm; text-align: center;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin: 0cm;"><br /></div><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 0cm 0cm 0cm; mso-yfti-tbllook: 1184;"> <tbody><tr> <td style="padding: 0cm 2.8pt 0cm 0cm; width: 466.75pt;" valign="top" width="622"> <div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">While waiting for the result of the presidential election, it is time to consider exactly how the sweet promises made throughout the campaign period can be realized. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Since both presidential candidates brought up the national defense industry during the debate on security and foreign policy, the question is: How exactly will the new government reinvigorate the industry? <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Surely, Prabowo Subianto and Joko “Jokowi” Widodo have some sort of idea on how they would achieve their goals. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">However, here are several points they can consider once one of them finally takes office. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Outgoing President Susilo Bambang Yudhoyono and his Cabinet more or less have set up the grand strategy for defense industry development. It was during Yudhoyono’s tenure that Indonesia finally created a new regulation on the defense industry (Law No. 16/2012) and special committee to deal with the issue.<o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">The new president could continue, revise or even accelerate the effort. Within that context, the period of 2015-2019 signifies a new dawn for the Indonesian defense industry in the post-New Order era. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">According to a strategic plan developed by the Defense Industry Policy Committee (KKIP), which is headed by the President, the period of 2015-2019 is the second phase and has three objectives. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">First, national defense industries have the capability of supporting the fulfillment of minimum essential force, enhancing joint-production with foreign suppliers and developing new weaponry. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">In essence, in the second phase, Indonesia aims to control the production of defense-related instruments. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Therefore, in the future, the proportion of national production in national force could exceed foreign suppliers or arms imports. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Previously, in the first phase (2010-2014), the objectives were to revitalize national defense industries, arrange a long-term program and prepare national regulation. The focus of the first phase was to obtain the knowledge, skill and infrastructure of design control.<o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Looking at the KKIP plan, we can see how grandeur the project is. Carrying out the plan will not be easy, but not impossible. Indonesia needs to think outside the box and dare to take risks. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">First, the new president should increase the national Research and Development budget. The current budget, which is still below 1 percent of the GDP, is barely enough to fulfill and sustain Indonesia’s needs. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">An increase of the R&D budget must be followed by the implementation of systematic policy to foster an innovative and efficient culture in the defense and commercial sector, as well as in research conducted by universities and research institutes such as the Indonesian Institute of Sciences (LIPI). <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Innovation and efficiency are valuable currencies in the world nowadays. Whichever power produces the most innovative and efficient products or service will control and even dominate the market. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Second, to be relevant domestically and competitive internationally, Indonesian defense industries should be arranged into clusters classified based on core competencies. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">The KKIP must coordinate and lead the course of development and ensure that no resources are being wasted because of inefficiency, corruption or miscalculation. Defense industries must be professionally managed.<o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Innovation, efficiency and industrial clusters have a multiplier effect on the whole defense system. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">In effect, it would bolster not only the productivity of industries but moreover the capability of the defense system to protect national integrity. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Within the defense industry, the government basically plays the roles of customer, sponsor as well as regulator (Heidenkamp, Louth, Taylor, 2013) — roles that present both opportunities and challenges. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Defense companies provide the needs of national armed forces and government pays for its products or services. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">To meet specific requirements, it is not unusual for companies to customize the line production and investing for more sophisticated means of production. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Meanwhile, government also holds prominent roles in this relation. One of them is maintaining the productivity of the national industries through export promotion abroad. Moreover, the government’s support for defense industries is also reflected in R&D financing. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">However, as regulator, government must make sure that the defense industry, be it the state-owned enterprise or private entity, complies with national law and international norms, such as the Corruption Law. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Corruption remains a major problem in Indonesia. In a matter of national importance, the government should think beyond 10 or 20 years of planning. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">What the policymakers should bear in mind is that Indonesia should emerge as a prominent player in the region. It would not only bring stability and prosperity in the domestic sphere but also benefits in the context of regional and international order. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">In 2020-2024, Indonesia will enter the third phase. More ambitious than previous phases, the goal is to obtain the technological and managerial capabilities for new development. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">In that future phase, Indonesia shall have already established its position within the first tier of global hierarchical defense producers. PT DI, PT Pindad and PT PAL, for example, offer innovative products with cutting-edge technologies for world consumption.<o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">National defense industries support the Indonesian armed forces and Indonesia is involved in much international cooperation.<o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Having said all the above, the development of national defense industries needs strong political will from the government, and continued public participation and approval, as others states have shown so far. <o:p></o:p></span></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><br /></div><div style="background: white; line-height: 150%; margin-bottom: .0001pt; margin: 0cm;"><span style="font-family: "Arial","sans-serif"; font-size: 13.0pt; line-height: 150%;">Therefore, it is imperative that within the first few days of taking office, the new president should set the stage for the reinforcement and improvement of the defense industry plan in a professional and democratic way. ●</span></div></td></tr></tbody></table>

      Future of the defense industry under a new leader Muhamad Haripin  ;     A researcher at the Centre for Political Studies, ...

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