Jayanty Nada Shofa, Jakarta – Barzan Holdings, the strategic investment arm of Qatar's Defense Ministry, considers Indonesia as a big market for arms producers.
The Doha-based company also doubts that Indonesia will put the brakes on its defense investment despite today's global economic challenges. Barzan has been supplying the Indonesian military with ammunition, battlefield management, and complex mortar systems over the past years through a joint venture set up with the Defense Ministry. This firm is known as the Indonesian Defense and Security Technologies (IDST).
Barzan's senior manager for international markets, Rashid Al-Mohanadi, recently told the Jakarta Globe that Indonesia boasted huge potential as a defense market despite not allocating as much money as Singapore for its military. The reason?
If we put Singapore to the side, Indonesia is the biggest market in Southeast Asia. It has the biggest armed forces but also the biggest security challenges: thousands of islands and a lot of maritime domains need to be monitored, Rashid said on the sidelines of the 2024 Indo Defence Expo & Forum.
When kicking off the four-day arms show, President Prabowo Subianto had highlighted how a country should invest in its defense systems. Even so, the former military general made headlines earlier this year for imposing budget austerity measures, which forced his government to cut non-essential spending. According to media reports, the Defense Ministry and military forces have to slash their budget by Rp 26.9 trillion (almost $1.7 billion) this year by cutting down on seminars and celebrations.
The world today is also witnessing economic uncertainties. Indonesia's gross domestic product (GDP) even slowed to 4.87 percent year-on-year in the first quarter of 2025, the lowest quarterly growth in three years. Even so, Barzan remains confident that the arms demand will remain big in Indonesia.
With the current [Prabowo] administration, defense will always be a priority. It is not only because of the president's leadership, but also the security and defense challenges that are not going away. Even if there are economic hurdles, you still have to defend your country. So, I don't think defense will be affected by the economic hurdles, Rashid said.
He then went on to say how Indonesia has a very strong position when it comes to economic potential, citing its abundance of nickel. This silvery-white metal is a mainstay ingredient in electric vehicle production and often touted as the country's growth driver. As Barzan seeks to closely cooperate with Indonesia, Rashid revealed that many of the components used in IDST's products came from local vendors. The integration – the process of combining the different components – also mainly takes part in Indonesian soil.
"[The local content] of some products can go up to 90 percent. The 120 mm mortars that we have delivered [to the armed forces] are almost entirely Indonesian-made. More localization is also one of our future plans with Indonesia", Rashid told the Globe.