DPR Assesses Challenges in Defense Industry on Policy Consistency and Financing

Strengthening Indonesia’s national defense industry is not only dependent on budget size but primarily on consistent long-term policies and sustainable financing. This was stated by DPR RI Commission I member Amelia Anggraini. The government acts as a crucial regulator, buyer, and facilitator, supporting domestic production. The modernization program of the armed forces, transitioning from ‘Minimum Essential Forces’ to ‘Optimum Essential Forces’, should serve as a strategic tool to ensure the sustainability of the defense industry. However, the sector faces financial challenges as investment is seen as high-risk due to its capital-intensive nature and long production cycles. Although banking sector support has begun, its scale is still insufficient. The Defense Industry Law establishes a robust foundation, prioritizing the use of local products and technology transfer. Further integration with the private sector is also gaining momentum, with companies like PT Nanggala Kencana Rekatama Indonesia implementing precise manufacturing processes and reducing dependence on imports.