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Jakarta Post

Jobs law stirs debate on defense industry

  • Made Anthony Iswara

    Jakarta

Jakarta   /   Wed, October 28 2020   /  01:00 am
Workers at state-owned weapons maker PT Pindad prepare the “Harimau” medium tank on Sunday, which will be displayed at the upcoming Indo Defense Expo 2018 at the Jakarta International Expo in Kemayoran, Central Jakarta, from Nov. 7 to 10. More than 867 participants from 59 countries will be taking part in the event.(The Jakarta Post/Dhoni Setiawan)

The passage of the Job Creation Law has sparked worries about opening the defense industry to the private sector and foreign investors, while private enterprises assert that the step is needed for the industry’s revival. Defense expert Al Araf said allowing private enterprises into the nation’s defense industry could be harmful as it would spur competition that could obstruct strategic military affairs and weaken defense-related state-owned enterprises (SOEs), which already faced mismanagement, budget shortages and a lack of locally sourced components. “This [omnibus law] could potentially kill local [defense] industries,” said Al Araf, who is also the director of human rights group Imparsial. He called for a judicial review or a regulation in lieu of law (Perppu) to revise the omnibus law. He pointed to Article 74 of the omnibus law, which facilitated li...