Government Strategy in Supporting Dual Use Technology Product Development on Defense Industry in Indonesia

Abstract

Product Development of military and non-military become a must choice by defense industry to endure in facing challenge on need of unsustainable military product. If a defense industry only depends on production of military product, there is risk that defense industry will experience point of saturated. In overcoming the problem, the defense industry must own the function as Dual Use between defense sector and economy sector. Defense industry in increasing its independence uses the proposed strategy to reach the economy scale from its own manufactured products. This study aim to analyze the contribution opportunity of government strategy in supporting the development of military and non-military product (Dual Use Technology) on defense industry in Indonesia. The type of research is analysis of qualitative descriptive through data collection techniques by using bibliography, observation as well as interview to a number of leader organizations in the Ministry of Defense, Ministry of Finance as well as some principal of Industrial State-Owned Enterprises Strategic (BUMNIS) in Indonesia, academics as well as experts on the field of research. Research results show that a need of governance performance improvements on financing internal defense, especially Domestic Loan and Foreign Loan as well proper policy of incentive fiscal in supporting economics scale in defense industry. Therefore, the writers conclude and provide possible suggestions that can be useful as material consideration for government strategy on developing dual use technology products in Indonesia.