JAKARTA: Indonesia’s Outgoing President Joko Widodo has approved a 20% surge in defense budget. The move aims to modernize the nation’s military hardware in response to evolving geopolitical developments.
Finance Minister Sri Mulyani Indrawati during a press conference said that approval came in a meeting she attended with President Joko Widodo, and Defense Minister Prabowo Subianto.
Prabowo, a key contender in the upcoming February presidential election, is running with the endorsement of President Widodo’s son.
The defense budget will see a rise from $20.75 billion to $25 billion, according to Minister Indrawati. She emphasized that the defense ministry presented these needs as crucial, given the state of the country’s military hardware and the escalating threats in the face of evolving geopolitical and geo-security dynamics.
Despite the “significant” increase, Minister Indrawati clarified that the defense budget for the three consecutive five-year periods from 2020 to 2034 will remain at $55 billion. This alignment, she noted, corresponds with the nation’s medium- to long-term fiscal plans. The source of the funds is earmarked to be foreign loans.
Indonesia, a Southeast Asian nation, has actively pursued the modernization of its aging military fleet in recent years, primarily led by Defense Minister Prabowo. The country’s defense spending per capita and as a percentage of gross domestic product has ranked as the lowest among six of the region’s emerging-market economies for the past decade, according to data from the Stockholm International Peace Research Institute (SIPRI).
Prabowo’s recent deals include the acquisition of 42 Dassault Rafale fighter jets for $8.1 billion, 12 Turkish Aerospace drones valued at $300 million, and 12 Mirage 2000-5 fighter jets worth $800 million. Additionally, agreements were signed in August 2023 to purchase fighter jets and transport helicopters from U.S. companies Boeing and Lockheed Martin.
Indonesia, after a submarine incident during a drill in 2021, inked a deal in September to procure a $100 million submarine rescue vessel from Britain. The nation is also entangled in a funding dispute with South Korea over a joint KFX fighter jet project.
