Qatar and Indonesia Strengthen Defense Ties Amid Market Turmoil

In a significant development for bilateral relations, Qatar has announced plans to establish a local defense production center in Indonesia. This initiative comes at a time when Indonesia's stock market is experiencing notable declines, with the Indeks Harga Saham Gabungan (IHSG) falling to its lowest level in a decade.

During a recent Indo Defense Expo and Forum, Barzan Holdings, Qatar's defense investment arm, signed multiple agreements to enhance defense cooperation with Indonesia. These agreements include supplying rifles and ammunition to the Indonesian army and collaborating on the development of a local ammunition factory through a joint venture. Eng. Mohamed bin Badr Al Sadah, Group CEO of Barzan Holdings, emphasized the importance of these partnerships for advancing military capabilities in both nations.

“Both countries are maritime nations relying on the sea for their economies and welfare.”Rashid Al-Mohanadi, Senior Manager – International Markets, Barzan Holdings

Rashid Al-Mohanadi, Senior Manager – International Markets at Barzan Holdings, highlighted the shared maritime security interests between Qatar and Indonesia, noting that both countries are maritime nations relying on the sea for their economies and welfare.

Meanwhile, the Indonesian stock market has been under pressure, with the IHSG dropping approximately 5.18% to 4,916.60 points on October 19, 2026, marking a significant decline of about 43% year-to-date. Analysts attribute this downturn to a combination of global economic pressures and investor reactions to recent announcements from Morgan Stanley Capital International (MSCI) regarding Indonesia's market classification, which may shift from an emerging market to a standalone market.

“Eng. Mohamed bin Badr Al Sadah, Group CEO of Barzan Holdings, emphasized the importance of these partnerships for advancing military capabilities in both nations.”Paraphrased statement from Eng. Mohamed bin Badr Al Sadah, Group CEO, Barzan Holdings

As the market struggles, the Indonesian government is implementing measures to stabilize trading conditions. The Indonesian Stock Exchange (BEI) has introduced a lower Auto Rejection Bawah (ARB) limit of 7% to manage volatility and allow investors time to digest market information. This comes after a series of sharp declines, with the IHSG having previously fallen to levels not seen since the COVID-19 pandemic.

Despite the challenges in the financial markets, the defense agreements signal a commitment to strengthening military ties and enhancing security cooperation between Qatar and Indonesia. The establishment of the local defense production center is part of ongoing efforts to modernize defense capabilities and develop local industries.