Driven by ongoing defence modernisation initiatives, GlobalData forecasts Indonesia’s defence expenditure to grow from $8.8bn this year to $9.7bn by 2028.

Indonesia, a trillion-dollar economy that has grown at an average gross domestic product of about 2.9% annually between 2019 and 2023, is one of the emerging defence spenders in South Asia.

GlobalData intelligence indicates that the nation’s military fixed-wing aircraft is the largest sector accumulating the most funding – worth $22.7bn through the period 2023–28.

Abhijit Apsingikar, Aerospace and Defence Analyst at GlobalData, comments: “Indonesia’s defence budget is majorly driven by the need to mitigate natural disasters and undertake military modernisation initiatives.”

Indonesia plans to modernise its armed forces and aims to establish “Minimum Essential Forces”, a strategy for establishing a force structure consisting of key military capabilities to maintain adequate levels of operational readiness to rapidly deploy forces in case of national contingencies.

“Furthermore, increasing fundamentalism has aggravated the threat of terrorism, which coupled with online radicalism, has compelled Indonesia to heavily invest in cybersecurity and counter-terrorism apparatus.”

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Indonesia’s Air Force will stand to benefit the most

Over the period 2018-23, Indonesia sanctioned several defence deals to modernise its air force fleet, including the acquisition of 42 Dassault Rafale as well as 24 F-15ID multirole strike fighters.

The country also invested in modernising its airlift capability and signed a contract to acquire two units of the A-400M Atlas transport aircraft – joining the likes of France, Germany, Spain, Turkey and the UK among others.

Apsingikar continues: “Although the focus on expanding the domestic defense industry slightly curtails market opportunities for international manufacturers and exporting countries, Indonesia’s burgeoning economy, coupled with its expanding defense modernization needs, offers several opportunities for mutual cooperation.”

Moreover, Indonesia’s current co-operation with South Korea over the KF-21 Boramae project offers a template for future engagement with the country.

Meanwhile, the nation has also dipped its toe into the American defence market considering the government’s deal to acquire 24 units of Sikorsky S-70M Black Hawk helicopters over next few years.

With infantry 40 Stormer 30 infantry fighting vehicles procured in the 1990s; 57 self-propelled artilleries from as far back as 1975; as well as 275 AMX-13 main battle tanks acquired since 1961, the country must also begin to look to its land platforms.

Despite the development of its air force, Indonesia’s land vehicles are far more outdated than most of its aircraft, which were mostly procured in the last ten to 15 years.