Indonesia Approves 20% Boost In Defence Spending, Prioritizing Military Enhancement Amidst Geopolitical Shifts

Indonesia’s defence budget is set to rise from $20.75 billion to $25 billion, according to Sri Mulyani. The decision, made in response to the defence ministry’s deemed necessity amid concerns over the state of military hardware and growing threats in a changing geopolitical landscape, represents a “significant” increase.

Indonesia’s departing president has given the green light for a 20% increase in defence spending until the end of the following year. The move aims to enhance the nation’s military capabilities in response to geopolitical changes, as announced by Finance Minister Sri Mulyani Indrawati during a press briefing on Wednesday, November 29. The decision was made in a meeting attended by President Joko Widodo and Defence Minister Prabowo Subianto.

Indonesia’s defence budget is set to rise from $20.75 billion to $25 billion, according to Sri Mulyani. The decision, made in response to the defence ministry’s deemed necessity amid concerns over the state of military hardware and growing threats in a changing geopolitical landscape, represents a “significant” increase. However, Sri Mulyani emphasized that the total defence budget for the three consecutive five-year periods spanning 2020 to 2034 will remain at $55 billion, aligning with her medium- to long-term fiscal plans.

Throughout the last decade, Indonesia has consistently ranked lowest in defence spending per capita and as a percentage of its gross domestic product among six emerging-market economies in the region, according to data from the Stockholm International Peace Research Institute (SIPRI).

Defence deals signed by Prabowo in recent years include acquiring 42 Dassault Rafale fighter jets for $8.1 billion, 12 Turkish Aerospace drones worth $300 million, and 12 Mirage 2000-5 fighter jets valued at $800 million. In August 2023, additional agreements were made for the acquisition of fighter jets and transport helicopters from U.S. companies Boeing and Lockheed Martin.

In September, Indonesia inked a deal to acquire a $100 million submarine rescue vessel from Britain, following the sinking of one of its submarines during a 2021 drill. Tensions have also arisen between Indonesia and South Korea over funding for a joint KFX fighter jet project.

Prabowo has overseen several military hardware acquisitions, such as securing 42 Dassault Rafale fighter jets for $8.1 billion, acquiring 12 new drones from Turkish Aerospace valued at $300 million, and obtaining 12 Mirage 2000-5 fighter jets worth $800 million. Additionally, Indonesia struck a deal to purchase 24 transport helicopters from the U.S. defence contractor Lockheed Martin in August, with the specific cost undisclosed.