Indonesia and Italy are not often classed as partners when analysing the economic and security relations between Southeast Asia and Europe. Italy has historically only had a very limited presence in the region compared to other colonial powers such as Britain and France. Meanwhile, Indonesian agency and foreign policy have received scant attention as all eyes focus on the growing geopolitical competition between China and the US. Yet, in 2024, Indonesia became the largest importer of Italian armaments, with purchases totalling €1.25 billion. In the same year, an Italian Carrier Strike Group centred around the aircraft carrier Cavour was deployed in the wider Indo-Pacific theatre, spending 158 days conducting exercises with extra-regional partners including Indonesia. Accounting for these growing bilateral maritime ties between the two nations lies particularly in understanding the convergence between Indonesian maritime security goals and Italy’s economic interests in the wider region.
To begin, the growing maritime links between Italy and Indonesia have been predominantly driven by security and defence-related issues, particularly Indonesia’s push to modernise its navy and protect its maritime sovereignty. Indonesia, as the world’s largest archipelagic country with a sea area reaching 5.8 million km², faces a unique and complex maritime security environment. Rather than traditional issues of sea power and power projection, the main maritime threats that Indonesia and particularly its coastal communities face is illegal fishing, smuggling, piracy and natural disasters. In particular, illegal fishing in Indonesian maritime areas is a serious threat to the wellbeing of coastal communities, with estimates suggesting that each individual illegal trawl fishing vessel causes economic losses upwards of $1.2 million USD. This has meant that the Indonesian Navy’s (TNI AL) focus remains on its peripheral and littoral seas rather than the wider Pacific, serving a key constabulary role that seeks above all to protect Indonesian maritime sovereignty and the livelihoods of its coastal communities.
Italy, on the other hand, has been a late arrival to the Indo-Pacific, traditionally being seen as a Mediterranean naval power with limited interests outside its area of operation. The change in strategy has been predominantly caused by the growing economic interests of Italian industry in the wider Indo-Pacific and ASEAN region. Italy’s bilateral trade with 10 of the region’s largest trading nations has risen by 16.4% in the last 10 years from $107.5bn in 2011 to $125.2bn in 2021, representing one of the fastest growing markets for Italian goods and services. Most significantly, growing bilateral trade and economic ties have been sustained by defence cooperation and procurements, with there being a 44.7% increase in the value of defence exports from Italy to the wider Indo-Pacific in the previously mentioned decade. Italy and Italian defence firms have, for example, entered the Global Air Combat Programme which includes Japan and have increasingly partnered themselves with regional defence firms, evidenced by the fact that in 2022 at the Indo-Pacific Expo, Italy had the second-largest foreign presence after the United States. Italy’s goals in the region are thus predominantly about promoting and defending growing economic and defence ties by encouraging multilateral cooperation and stability in a region that is increasingly the site of great power competition.
So, how have these interests converged given Italy’s late arrival to the Indo-Pacific?
Put simply, the deepening of bilateral maritime ties can be explained by the fact that Italy can provide Indonesia with what it wants reliably and rapidly.
The TNL AL has historically faced significant challenges in fully carrying out its mission and responsibilities. The Indonesian Armed Forces (TNI) have long been dominated by the priorities of the land army (TNI AD) which has absorbed most of the country’s defence budget given internal insurgencies and conflict. The outcome of this was that the initial visions and plans to turn the TNI AL into a functional green-water navy able to serve its role in coastal and littoral waters failed, with only about 60% of the target ship count actually met or in construction by 2023. Such a failure has meant that the TNL AL faces significant capability gaps that it needs to fill.
However, such a situation has spurred on a major set of acquisition programmes that seek to rapidly rectify these gaps and build up a strong domestic shipbuilding industry. In 2021, for example PT PAL (Indonesia’s state-owned shipbuilder) signed a licensing agreement with the UK firm Babcock to domestically build 2 Arrowhead-140 frigates, representing a significant leap for an indigenous shipbuilding industry that has long struggled to compete with regional rivals. More importantly for this article, in 2024, the Indonesian Ministry of Defence purchased 2 already built PPA multi-role patrol vessels originally destined for the Italian navy from the Italian shipbuilder Fincantieri, receiving them in early 2025. The PPA frigate programme is important in this regard as it represented a radical change from previous procurement decisions that prioritised indigenous construction and technology sharing. The purchasing of 2 already built and ready ships represents a shift towards prioritising speed and the filling of urgent operational gaps over local construction and industrial interests. Fincantieri’s and the wider Italian Navy’s ability to quickly accommodate Indonesian interests as well as provide training, ensured that Italy began to be seen as a reliable partner in the field of defence compared to for example the US that has dragged its feet over the acquisition of F-15s by the Indonesian Airforce. On the Italian side, Indonesia presents itself as a growing market for an industrial sector that has struggled in recent years due to the aftershocks of the war in Ukraine and high energy prices. Expanding ties with Indonesia provides Italy with a potential strong partner off of which it can expand and protect its presence and interests in the region. As potential conflict and threats loom in the horizon, it is likely that Indonesia and Italy will continue to deepen these mutually beneficial ties, strengthening Indonesian maritime sovereignty and Italian economic resilience.
Further Reading
1. Pulungan (2024). From Archipelago to Maritime Hub: Indonesia’s Quest to Become the World’s New Maritime Axis
2. Patalano (2024). Italy: The Globally Connected Mediterranean Power?