Indonesia is an island nation located in Southeast Asia, comprising of 13,466 islands and 33 provinces. It shares land borders with Papua New Guinea, East Timor, and Malaysia. It also has the largest Muslim population in the world. Amidst globalization and an ever changing strategic environment, strive of the Indonesian nation in facing security threats poses implications to the life of its citizens. The formulation of defense policies is made after consideration of geographic and demographic factors, the availability of natural and artificial resources, social factors and the state's financial condition. After Osama bin Laden's death, Indonesians have been on a high security alert, constantly dreading attacks.

There have been several cases of bombings in the past, with the government failing to curb the rise of Islamic militancy, which can be blamed for the chaos prevailing in the country. The Indonesian defense industry is comprised of three state-owned companies that produce defense related commodities while a fourth unit is involved into the production of explosives and propellants. However, Indonesia has been known to give low priority to its defense sector during times that followed after its independence, despite being one of the world's most populated nations. But changes in its outlook can be seen after a parliamentary mandate in the late seventies incited the authorities to take on the issue more seriously.

The Indonesian defense industry has inherently produced choppers, light combat aircrafts and transportation aircrafts with small arms, ammunitions including variety of spare parts as well. This industry is further classified into three main sectors on the basis of its production criteria, i.e. the aircraft industry (PT PAL) and the small arms, munitions and heavy equipment industry (PT Pindad). Projections of the defense for the next two to three years are expected to reach around 2% of GDP, and increase gradually in the coming five years. This can be looked upon as a great boon for the Indonesian defense industry that has been looking forward to prosper and develop.

In this industry scenario, Synergyst analyzes the Defense and Security industries in Indonesia. The report covers the following:

• In order to understand the development of the Indonesian defense and security industry, it is important to take a look at the geopolitical situation in the world, particularly in South East Asia. Our research report analyzes the emergence of a new geopolitical situation in the world through a look at the new roles to be played by the United States, China, Japan, the Koreas, India, Russia, Europe, Brazil, Turkey, Iran, the Middle East, and Africa, in the coming years.

• The emergence of new great powers around the world in the face of growing global terrorism is analyzed in the report.

• An analysis of the security market in South East Asia is important in establishing the importance of Indonesia in this industry across this entire region. The geopolitical significance of South East Asia is important as there are many flashpoints in the region that could have an impact on Indonesia.

• In order to examine the defense and security industries in Indonesia, it is necessary to analyze the political landscape in Indonesia, including the major political changes on the horizon.

• Moving on to the analysis of the security industry in Indonesia, we analyze the domestic security situation as well as the external security situation. Furthermore, we analyze the impact of the Indonesian relations with Australia, China and the US.

• We carry out a SWOT analysis of the Indonesian Security Market.

• An analysis of Indonesia’s Armed Forces is necessary in order to establish the growing importance of Indonesia in the Asian region in terms of military presence.

• Moving on to an analysis of Indonesia’s defense industry, we analyze the market profile, industry trends, competition in the industry, Indonesia’s arms trade, and procurement of arms in the industry.

• We carry out a SWOT analysis of the Indonesian Defense Industry.

• Outlook for the Indonesian Defense and Security Industry is carried out through a forecast for defense expenditure and defense trade, and a forecast for the Indonesian Armed Forces.

Synergyst ’s report on Defense and Security in Indonesia is a complete profile of this competitive industry in Indonesia that is battling a severe problem of insurgency both within and outside its borders.