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Revitalizing the defense industry a priority for Indonesia

| Mon, 11/09/2009 1:02 PM
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New Defense Minister Purnomo Yusgiantoro started his job by focusing on monitoring the country's border areas. During his visit to the country's northern frontier city, Entikong in West Kalimantan, the minister, who is better known for his proficiency in the energy and economy field than defense and military issues, shared some of his plans for his 100-day program with The Jakarta Post's Hans David Tampubolon. Below are the excerpts of the interviews:

Question: What are the problems that you have seen in border areas so far?

Answer: We came here in the first place as part of our 100-day program, and in that program border issues will be one of our main priorities. To solve those issues, we are going to visit outer regions as often as possible, so that we can grasp the problems.

For regions that do not yet to have official border gates, we are going to negotiate that with neighboring countries. On the other hand, we are going to improve the condition of people in regions that already have border gates, like the one right here in Entikong.

From our visit, we found out the main problems here are related to social and economic conditions. One of the solutions we have discussed with the Defense Ministry is planning to give a special pay raise to military officers deployed in the nation's outer regions and islands.

What is the amount of the special salary raise?

It will be not fair for me to reveal that amount right now because the idea is not confirmed. There is always a possibility the amount could change.

Other than trying to solve welfare issues, do you have any plans to improve the quality of the main weaponry system?

Some 58 percent of our budget is allocated to salaries for our manpower. The rest of the budget is then allocated to the weaponry system and its maintenance. Ideally speaking, the minimum budget for the Indonesian Military (TNI) is at least Rp 125 trillion. However, we all know the budget only increased to Rp 42 trillion from Rp 33 trillion.

So, what can we do with this budget? Well, we will allocate that budget into five main areas. First, we will enhance efforts to guard the nation's integrity in border regions. Secondly, we will improve sea patrol. Third, we will boost efforts to eradicate separatism and terrorism. Fourth, we will improve the TNI's capability to cope with natural disasters, and finally, we will maintain our participation in peacekeeping operations abroad.

How will you revitalize a defense industry that continuously suffers billions of losses each year?

The revitalization is one of the 15 programs personally selected by the President. In the near future, the President will hold a national seminar and will invite all defense industry stakeholders to participate.

During that seminar, the President will give out his suggestions, so let us wait and see.

However, in my opinion, there are three crucial factors that we need to focus on to revitalize the defense industry. First, we will identify the buyers. The buyers do not only include the TNI and the Defense Ministry, but the police as well. Second is the supplier side. Defense industry suppliers are all state-owned companies, therefore, we must be very clear about their status as an industry.

Last night, we had a meeting with the state minister for state-owned enterprises, and we agreed that enhancing the defense industry is a priority. The problem we are facing today is the fact that no one really has a clear idea about the status of the defense industry. For example, to which ministry should PT PAL be placed under?

It's unclear and totally different from the state oil company PT Pertamina, which is firmly placed under the management of the Energy and Mineral Resources Ministry and the state SOE minister.

Finally, we have to take into account the possible implication of the revitalization. For example, buyers could be offered a long-term agreement. From the suppliers side, we have to put more focus on funding. These are issues we will be working on.

How do you plan to resolve the increasing debt from the TNI to Pertamina due to the heavy buying of fuel?

I have received a report saying the debt amounts to between Rp 6 trillion and Rp 7 trillion. The price of oil is highly uncertain. When the price is high, the TNI will buy less oil, causing them to cut their daily operational activities. This is a problem.

The same problem once took place between the state electric company PT PLN and Pertamina. We managed to resolve the issue using a specialized subsidy scheme for PLN. Maybe we can apply the same policy for the TNI, but that would mean changing the system.

For that, it is important that all related ministries in the government share the same view on the matter.

Many observers doubt your capability to be Defense Minister due to your background, your comments?

I say just wait and see the results.

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