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Defense budget increase: Between progress and pitfalls
Without a clear road map, the process of acquiring defense equipment in Indonesia is frequently guided by opportunistic factors.
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Defense Minister Prabowo Subianto (right) witnesses the signing of a memorandum of understanding (MoU) committing to the sale on Aug. 21, 2023 between the Indonesian Air Force and Boeing officials at the company's St Louis facility in the United States on Aug. 22. Indonesia and US aircraft manufacturer Boeing have agreed a deal for the sale of two dozen F-15EX fighter jets as Southeast Asia's biggest economy moves to modernize its fleet, Prabowo said during the MoU event.
(AFP/Handout)
President Joko “Jokowi” Widodo proposed to the House of Representatives on Aug. 16 the draft state budget for 2024, which amounts to Rp3.3 quadrillion (US$220 billion).
Referring to the financial memorandum of the draft budget, the Defense Ministry obtained a substantial budget allocation, which stands at Rp135.4 trillion, second only to the Public Works and Housing Ministry.
According to the state financial report, the defense budget has shown ups and downs over the past five years. Notably, in 2020 defense spending increased by 25.02 percent year-on-year (yoy) to Rp144.21 trillion. In 2021 the Defense Ministry budget was cut by Rp 9.5 trillion to Rp 131.28 trillion to help the national economy recover from the devastating impact of the COVID-19 pandemic.
The defense budget then increased to Rp154.9 trillion in 2022. This hike was accompanied by supplementary allocations of Rp 300 billion for vaccines and Rp 855 billion for public safety as Indonesia stepped up the fight against the coronavirus. The Defense Ministry also received an extra Rp 9.45 trillion to expedite foreign loan repayments.
Subsequently, the defense budget declined to Rp144.3 trillion in 2023.
Despite the fluctuations and the complexity of budget utilization, the Defense Ministry obtained an unqualified opinion from the Supreme Audit Agency (BPK) from 2018 through 2023. This demonstrates that the ministry prioritized efficiency and effectiveness in budget use.
Behind the urgency of defense spending and the ministry’s impressive performance, it should be noted that the defense budget for 2024 fell by 6.17 percent yoy. In fact, there are at least two underlying reasons why the country’s spending on defense should increase, rather than decrease.
