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ndonesia may face hurdles in its efforts to set up an independent defense industry by 2024 as the government is experiencing obstacles with the transfer of technology required in weapon purchases, says an official.

In a bid to improve the country’s obsolete primary weaponry system (Alutsista), the government passed a law in 2012 on the defense industry, stipulating that Indonesia must obtain weapons technology every time it purchases a new weapon from abroad.

Despite the law, however, Indonesia not being involved in international defense or military alliances, such as the Five Power Defense Arrangement (FPDA) or the North Atlantic Treaty Organization (NATO), has hindered the country’s efforts to obtain technology knowledge.

During Susilo Bambang Yudhoyono’s presidency, the Defense Industry Policy Committee (KKIP) developed a strategic plan to propel the national defense industry.

The focus during the first phase of the plan, from 2010 to 2014, was on obtaining knowledge and skills for design control.

In the second phase, 2015 to 2019, the focus has shifted to technology control, which aims to enhance joint production with foreign suppliers to develop new weaponry. This concentrates on lessening the dependence on foreign suppliers.

The Committee previously decided that Indonesia should implement technology transfer mechanisms in procurements of seven prioritized weapon systems, namely warships, submarines, tanks, jet fighters, missiles, radars and propellants.

Indonesian state-owned explosive manufacturer PT Dahana has formed a joint venture with Anglo-French propulsion-systems company Roxel Group and French chemical firm Eurenco to develop propellants. The factory is in Subang, West Java, operating since 2014.

Recently, Indonesia has ordered three submarines from a Korean defense company as part of efforts to fulfill Indonesia’s minimum essential force (MEF) program. The government said it would ensure knowledge transfers if the partnership was made a priority.

“The first and second submarines were developed in South Korea. For the first submarine, we sent Indonesians to South Korea for training whereas for the second submarine, our engineers were already involved in the construction. The third submarine will be developed by [state-owned shipbuilder] PT PAL,” KKIP executive team deputy chairman Eris Heriyanto said, explaining the technology transfer process.

Some foreign companies, including Swedish defense company Saab, Lockheed Martin (US) as well as Leonardo-Finmeccanica (Italy), have expressed their readiness to transfer knowledge and technology if Indonesia decides to cooperate.

However, KKIP head of technology transfer and offset division Rachmad Lubis said the country’s limited defense budget has prevented Indonesia from acquiring transfers of knowledge and technology.

He cited an example of China promising Indonesia technology and to transfer knowledge, if the latter purchased at least 150 missiles. Otherwise, Jakarta would pay US$250 million to Beijing to purchase technology only. However, with the available budget Indonesia could only afford five missiles, Rachmad said.

“Imagine, the price offered for the missiles from China was 60 percent cheaper than the price of European-made missiles with relatively similar capability, but we were hampered by our limited budget,” Rachmad told reporters.

However, he remained optimistic that weapon producers would continue to see Indonesia as a potential partner given the government’s policy to speed up modernization of weaponry systems.