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Defense budget management key to military transformation
For the second time in the Reform Era, defense spending outweighs expenditures on other sectors like education and infrastructure. However, whether the rise in military spending will significantly impact the modernization of the weaponry system remains to be seen.
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A huge defense budget does not necessarily translate into a stronger national defense system because of two problems that have consistently stood between the Defense Ministry and effective use of its budget allocation. (JP/Wahyoe Boediwardhana)
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he 2020 state budget allocates Rp 131.2 trillion (US$9.26 billion) for defense, up 19.8 percent from 2019. For the second time in the Reform Era, defense spending outweighs expenditures on other sectors like education and infrastructure. However, whether the rise in military spending will significantly impact the modernization of the weaponry system remains to be seen.
Nevertheless, the bigger budget shows that President Joko “Jokowi” Widodo, a civilian, pays great attention to the defense sector. The 2020 defense budget accounts for 0.75 percent of projected gross domestic product (GDP) that year, which is estimated to be Rp 17.46 quadrillion. Indeed, the 2020 defense budget remains far below Jokowi’s ambitious figure of 1.5 percent of GDP.
Since taking office in 2014, Jokowi has consistently increased defense spending, except in 2018 when the government took austerity measures. However, in 2018, military spending was still 24.68 percent higher than the 2014 mark, which was set by Jokowi’s predecessor Susilo Bambang Yudhoyono, a former Army general.
A huge defense budget, however, does not necessarily translate into a stronger national defense system because of two problems that have consistently stood between the Defense Ministry and effective use of its budget allocation.
First is budgetary indiscipline. Although the defense budget has been increased significantly in the last five years, the problem of budget absorption, both underspending and overspending, has persisted. In 2016, for instance, only 85.8 percent of the defense budget was spent. On the contrary, in 2017, the defense budget was exceeded by Rp 2.4 trillion, partly due to the implementation of the new Indonesian Military (TNI) structure.
Furthermore, the Supreme Audit Agency (BPK) awarded a qualified opinion (WDP) to the Defense Ministry and TNI’s financial reports in four consecutive years from 2015 to 2018. Only in 2019 did they receive an unqualified opinion (WTP), the best audit grade.
Second, there is an obvious policy implementation gap. As laid out in his nine-point development program (Nawa Cita), President Jokowi envisions the development of Indonesia’s naval capability as a respected regional maritime force. In the National Medium-Term Development Plan, the defense sector gave priority to strengthening maritime security and and security of border areas and the outermost islands.
