The Indo-Pacific also serves as a vital distribution corridor for oil transported from the Middle East to the Pacific. For Indonesia, the region is home to key trading partners, including China, Japan and India.

However, the region is also witnessing an escalating military buildup and rising uncertainties, leading to several security hotspots. For Indonesia, this situation manifests in ongoing challenges such as territorial encroachments in the North Natuna Sea, maritime crime in the Malacca Strait and transnational threats, including drug trafficking and people smuggling. These represent persistent and tangible security risks that require urgent attention.

Given the strategic significance of the Indo-Pacific for Indonesia, Jakarta’s decision to gradually increase defense spending and modernize military capabilities is a key policy priority. This defense strategy must be complemented by a proactive engagement approach.

Indonesia’s ongoing diplomatic efforts, demonstrated by recent initiatives such as the Defense Cooperation Agreement with Australia signed in August 2024 and plans to acquire Brahmos missiles from India, highlight Jakarta’s commitment to strengthening its defense framework. These activities reflect an overarching effort to modernize Indonesia’s defense ecosystem by aligning defense acquisition policies with both national needs and future external projections, including the development of the national defense industry.

In the years ahead, the Indo-Pacific region is likely to experience increasing tensions, which, if left unaddressed, could have adverse effects on Indonesia. Policymakers in Jakarta are acutely aware of the importance of maintaining security and stability in the region, as these factors are essential for achieving economic growth. Indonesia aims for an 8 percent growth rate and a gross domestic product (GDP) per capita of US$30,300, aligning with the nation’s aspiration to become a developed country by 2045 under its Golden Indonesia Vision 2045.

Achieving these goals necessitates stability, which in turn requires strong security and defense systems. A robust defense infrastructure demands both financial investment and a shift in mindset to effectively navigate Indonesia’s immediate strategic environment.

Given the high level of dynamism in the Indo-Pacific, it is prudent for Indonesia to update its strategic paradigms.

First, it is essential to recognize the Indo-Pacific as a region of enduring relevance, both today and in the future. While Indonesia must optimize economic and defense cooperation, it must also be equipped to respond to potential military tensions in the region. This being said, placing the Indo-Pacific as a concentric circle in Indonesia’s assessment of the regional strategic environment in its formal defense and foreign policy-related documents is inevitable.

Second, future warfare is likely to be increasingly dependent not only on the number of troops on the ground, but also on the advanced capabilities of military technology and innovation. This recognition underscores the importance of modernization within the Indonesian Military (TNI), as highlighted by its commander, Gen. Agus Subiyanto. He emphasizes the necessity of improving personnel skills as part of the modernization effort and the potential integration of artificial intelligence into military doctrine.

Moreover, modernization should reflect Indonesia’s archipelagic nature, which may necessitate relocating naval and air defense systems and developing new ones. Additionally, there is a growing possibility of recruiting civilians to enhance Indonesia’s military cyber capabilities.

In alignment with these objectives, the Defense Ministry has signaled a gradual increase in defense spending from the current 0.8 percent of GDP to approximately 1.5 percent. These policies, complementary in nature, underscore Indonesia’s strategic intent to project its power regionally and globally in the coming years.

Third, Indonesia must continue its defense diplomacy, particularly within the naval sector, as a confidence-building measure. This approach is crucial to demonstrating that increases in defense budgets and military acquisitions are not intended as acts of aggression, but rather as a response to the need for military modernization, following a prolonged period of underinvestment.

Lastly, Indonesia should intensify its defense and military cooperation with countries that produce battle-tested military equipment. The principles of Indonesia’s foreign policy and the imposition of the Countering America’s Adversaries Through Sanctions Act (CAATSA) compel the country to adopt a strategic pragmatism in defense procurement. Indonesia’s diversified defense supply chain is not only vital for strengthening its domestic defense industry, but also for reducing dependency on any single source, thereby mitigating the risks associated with over-reliance on particular countries.

In August 2025, Indonesia will participate in the Indo-Pacific Chiefs of Defense Conference in Hua Hin, Thailand. As one of the largest nations in the region with a vested interest in its stability, it is imperative for Indonesia to assert its strategy for navigating the complex dynamics of the Indo-Pacific, grounded in the nation’s unique characteristics and power.

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The writer is founder and lead advisor of Indo-Pacific Strategic Intelligence (ISI) with a PhD in international relations from the London School of Economics and Political Science (LSE). This article is excerpted from his opening remarks at the launch of ISI.