Indonesia Defence and Security Report Q4 2008

Indonesia's internal security situation remains complex yet it appears that the fundamental problems in Indonesia are economic, rather than political or religious.

Until now, central Sulawesi and parts of Maluku have been associated as areas of instability. However, ongoing concerted efforts by the Indonesian government to restore peace and build stability have begun to bear fruit. Moreover, documented evidence supports the decline of militant Islamic groups, such as Jemaah Islamiyah (JI) and Laskah Jihad.

There continues to be unrest in Papua, where what was originally an independence struggle waged by Organisasi Papua Merdeka (OPM) has transformed into something more complex. More recently, the situation in Papua has been further complicated by a substantial number of predominantly Muslim immigrants (from other parts of Indonesia) who are keen for the national government to maintain control.

Meanwhile, in Aceh things remain calm. There are some concerns about corruption on the part of former insurgents who now hold political office, the fragmentation of the Gerakan Aceh Merdeka (GAM) organisation, and the activities of TNI - the Indonesian military - mean that risks of violence are real.

The growth of the economy in recent years has also greatly increased the funds available to the military for procurement of equipment. Likewise, the openness of Susilo Bambang Yudhoyono's government has led to much increased international co-operation. Given the small size and limited scope of Indonesia's indigenous defence companies, the main beneficiaries of increased spending are foreign, mainly Russian, Czech, or Russian/Indian consortia.

Looking ahead, BMI predicts a quiet quarter for Indonesian security. This is primarily due to the overall decrease in activity during the Muslim fasting month of Ramadan and the closure of many businesses during Idil fitri.