The Centralization of Authority and the Challenges of Technological Self-Reliance in the Development of Indonesia^s Defense Industry in the Aftermath of the Job Creation Law
Al Fadel Arman Rizzy

Universitas Terbuka

Abstract

This study analyzes regulatory changes in Indonesia^s defense industry following the Job Creation Law (2023) and their implications for authority centralization, foreign technological dependency, and collective legal responses. Using a normative juridical approach with descriptive qualitative methods, this research examines amendments to Law No. 16/2012 on the Defense Industry, particularly Articles 11, 21, and 69A. Secondary data were derived from LAB45 (2026), IISS (2025), and various regulations. The findings reveal that the Job Creation Law shifts the paradigm from state-led to hybrid state-market governance, weakening interministerial checks and balances. Foreign dependency remains critically high: Indonesia produces only 9 of 132 weapons system types (6.8%). Minimum Essential Force (MEF) achievement stands at 27%, and the Nusantara Trisula Shield (PTN) program reached only 62%, with critical gaps in maritime (24%) and C4ISR (38%). Unplanned acquisitions demonstrate weak accountability. This study recommends strengthening the Defense Industry Policy Committee^s role, introducing a national security screening clause, reinforcing offset and domestic content regulations, establishing an independent audit mechanism, and raising defense R&D allocation to 5-10% of the procurement budget.

Keywords: authority centralization, defense industry, Job Creation, legal response, technological dependency

Topic: Technological Moderation for Collective Legal Response (Legal Innovation- Collaborative Regulation- Technology and Law)