Several states in Southeast Asia have long attempted to produce their own armaments, both to support national security and to aid in national economic and technological advancement. In most cases, however, such efforts have been decidedly disappointing, and few local arms industries have been economically or technologically self-sustaining. Nevertheless, we may be witnessing a new phase of renewed interest among several Southeast Asian nations in expanding their capabilities for indigenous arms manufacturing, as evidenced in particular by new defence-industrial initiatives in Indonesia and Malaysia. These efforts have been supported by a long-term growth in defence expenditures and new efforts to utilize industrial offsets (such as technology transfers and localized production) as a part of arms acquisitions to build up local arms industries. It is unlikely, however, that these efforts alone will suffice to create economically viable local defence industries. Consequently, countries in the region will still have to make tough decisions about the future course of their defence industrial bases. Most likely, they will have to either invest considerably greater resources into developing their defence sectors (which may beyond their capacities and which are still no guarantee of success) or else they have to scale back their ambitions and choose to concentrate in niche areas where they have a better chance of being competitive in the global arms marketplace.