In southeast Asia, Indonesia has embarked on a rebuilding and replacement plan for its navy that will spend $125 billion over the next 25 years. One reason is the increasing Chinese aggression in claiming offshore Indonesian waters. This is about the EEZ (Exclusive Economic Zone) that extends 380 kilometers from all Indonesian territory. Within that EEZ Indonesia controls who can fish or explore for underwater oil or natural gas. Although China signed the treaty that established the EEZ system they have declared exceptions because of “historical Chinese fishing waters” and claimed ownership of small islands within some of the Indonesian EEZ. As a result, Indonesia has become part of a growing anti-China alliance that includes Australia, Vietnam, the Philippines, Malaysia, Taiwan, South Korea and Japan. Since the United States already had military alliances with many of these nations, the Americans are part of the coalition as well.
In addition, Indonesia has been particularly aggressive in dealing with Chinese encroachment. This was demonstrated decisively in 2016 when an Indonesian warship intercepted a dozen Chinese fishing ships illegally operating off the Natuna islands. The Indonesians fired warning shots and seized one of the Chinese ships and its crew and charged them with poaching. This was the third such incident in 2016 and Indonesia accused China of deliberately sending these fishing boats to poach in order to establish a claim that some of the Natunas belonged to China. The Natunas are 3,000 kilometers from China and within the Indonesian EEZ. In the past China has escorted Chinese fishing boats that were illegally fishing near Indonesia and several times used the threat of force to prevent the arrest of the Chinese fishing boats. In response to this Indonesia began sending enough warships to make arrests. There were no Chinese warships in the area this time. China justified their armed intervention but eventually backed because Indonesia responded with its own warships and demonstrated a willingness to use force to defend its EEZ.
China unofficially backed off on the illegal fishing but in 2021 tried to halt Indonesian exploratory oil drilling in the Natunas. These natural gas deposits were first discovered in the 1970s but until recently they could not be exploited because of low-natural gas prices and the lack of tech that enabled the gas to be extracted and delivered to customers. At this point the Natuna natural gas is worth half a trillion dollars to Indonesia and will cost over $20 billion to build the infrastructure to pump and ship the natural gas. The 2021 standoff saw China accepting defeat, but not giving up. A Chinese maritime survey ship spent several months in the area moving methodically as if surveying for the location of the natural gas deposits. This was legal in an EEZ and did not trigger an armed confrontation. If China attempts to do exploratory drilling, that is another matter. The Indonesian response was a major effort to increase the quantity and quality of its warships and combat aircraft capable of operating over the Indonesian EEZ.
The Indonesian fleet is old and long overdue for new ships. Part of the problem was that Indonesia never had a naval threat until China came along. In the 1990s Indonesia did refresh its fleet by buying most of the ships belonging to the East German fleet. The two Germanies had reunited in 1990 and that made East Germany part of NATO and most of its warships did not meet NATO standards. United Germany sold Indonesia most of these still-operational ships at bargain prices. Three decades later those ships, all of them Cold War Russian designs although many were built in East Germany or Poland. Upgrades to some of them and light use, mainly for patrolling coastal areas and fishing grounds helped but now replacements are needed. Indonesia has developed its own ship building industry, initially for commercial ships. These yards are able to build smaller foreign warships under license and this lowers the cost of obtaining new ships. Currently Indonesia has ordered ten frigates, mostly from Italian firms, and many if not most of these will be built in Indonesia.
The Indonesian Air Force is an important component of naval power and problems with Russian warplanes, plus sanctions on Russian weapons exports, has Indonesia seeking American and French fighters to upgrade their air force.