The Problems of Indonesia's Defense Industry

 

 The Problems of Indonesia's Defense Industry

The government's move, in this case, the Ministry of State-Owned Enterprises, to propose the provision of State Capital Participation (SCP) amounting to IDR 62.28 trillion for 41 state-owned companies in the 2012 State Budget (4/7) is the right step.

Regardless of whether the proposal may or may not be accepted, PMN for several state-owned companies is indeed an urgent need. Especially for companies engaged in the strategic defense sector, namely PT Dirgantara Indonesia (DI), PT PINDAD, and PT PAL, which were still unsteady due to the impact of the 1997 monetary crisis.

 If it is not helped, the company will collapse and the one who will lose is none other than the community. However, it should be noted that the provision of PMN to PT DI, PT PINDAD and PT PAL is only a first step - and is considered serious when compared to previous government-era policies - in an effort to revive Indonesia's strategic industries.

After nearly ten years of "being left alone" (in debt, stagnant sales, and high operating costs), the government and the management of the company can at least now start getting ready to tidy up and finish the piling up homework.

However, the management of state enterprises in the defense sector - which is projected to transform into a strategic defense industry - cannot be separated from the involvement of the state.

When looking at other countries, Indonesia must admit that it is far behind, especially when considering Indonesia's membership in the G-20. The last record of the glory of the defense industry can be traced back to 1995.

 At that time, PT IPTN - before becoming PT DI - launched the N-250, the prestigious and high-tech passenger aircraft of its era. Expectations for industrial development had soared at that time along with the emergence of export demand, and the government's next plan to build the N-2130 (Indonesia's first jet-engined passenger aircraft).