Indonesia seeks to strengthen enforcement of offsets

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through Jon Grevatt

Indonesia has pledged to strengthen enforcement of defense-industry cooperation guidelines, with the aim of strengthening local manufacturing and boosting the country’s economic response to the Covid-19 pandemic.

The Ministry of Defense (MoD) in Jakarta said this requirement was also aligned with President Joko Widodo’s stated intention to ensure that “the country’s defense budget supports investment” in Indonesia.

Indonesia has previously supported the purchase of defense equipment, including Sukhoi Su-27 fighter jets from Russia, through offsetting trade in local products. (Royal Australian Air Force)

Indonesian Defense Minister Prabowo Subianto told a meeting of the Defense Ministry’s Defense Industry Policy Committee (KKIP) on May 21 that the Defense Ministry had committed to ensure that the country’s defense budget “is properly managed in order to help improve the national economy”. This goal, he said, is aligned with Widodo’s “investment” requirement.

Subianto also said that the management of the defense budget also includes the management and enforcement of industrial cooperation that supports defense procurement from foreign suppliers.

“We have to figure out how to implement countertrade, local content, offsets, technology transfers and defense investments into every defense and security equipment purchase overseas,” Subianto said in comments. comments published by the public relations office of the Ministry of Defense.

According to the Defense Ministry, Subianto stressed to KKIP the requirement for defense-industry cooperation “recommendations and assessments in all defense equipment purchases”. This, he said, is aimed at “ensuring that Indonesia benefits from all aspects of every foreign defense equipment purchase.”

In addition, the Defense Ministry said it hoped to support the development of the national defense industry through the implementation of a new “long-term strategic plan”. This plan, the defense ministry said, would be closely linked to the requirements of supporting defense-industry cooperation in all foreign defense equipment purchases.

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Indonesia is committed to strengthening the application of the defense-industry cooperation guidelines, with …

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