Indonesia to increase defense budget by 16% in 2020

The Indonesian government, under the leadership of President Jocko Widodo, announced its intention to bring the country's defense budget in 2020 to 127,4 billion rupiahs, or $8,9 billion, an increase of 16% compared to compared to the 2019 budget which was 109,6 billion rupees. With this increase, the Defense budget will reach 5% of the Indonesian public budget, but will only represent 0,8% of the country's GDP. Indeed, from the beginning of the 2000s until 2014, the country also took advantage of the “benefits of peace” to freeze the budget devoted to Defense, while the GDP jumped. It thus went from 1,5% of GDP in 2004 to 0,7% today.

This increase is justified by the ongoing acquisition programs, intended to modernize the Indonesian armed forces, while tensions with China concerning its territorial claims on the China Sea continue to grow. The government had already made several significant increases from 2014, with the aim of achieving a Defense effort of 1,5% of GDP in 2019. But like other nations in the Indo-Pacific theater, such as the Malaysia or the Philippines, the country has been able to maintain significant growth, on average 5% per year for around ten years, partly neutralizing the budgetary efforts made.

Su27SKM Indonesia Defense News | Armed Forces Budgets and Defense Efforts | Arms exports
The Indonesian Air Force uses 5 Su27s and 9 Su30s, alongside 10 F16s

Among the key programs underway in the country, the acquisition ofa squadron of Su35s with Russia is the most problematic, since it exposes the country to sanctions under the CAATSA law. However, the Indonesian and Russian authorities seem determined to go beyond this and, like the mechanisms implemented with India regarding the S400, to implement their own payment mechanisms independent of the SWIFT system or the US Dollar. The country has also undertaken the design of its own medium tank program, the Black Tiger, designed with the support of Turkey. Equipped with a 105 mm cannon and weighing 32 tonnes, it has already been the subject of an order for 100 units by the Indonesian authorities. The Indonesian Navy is at the heart of the modernization effort, with the construction of 3 Nagapasa class attack submarines, additional built in cooperation with South Korea, and 4 Martadinata frigates of 2400 tonnes derived from the Sigma 10514 of the Dutch Damen. Additionally, the country recently ordered 8 Caracal helicopters for its air forces. Finally, the country is involved in the KF-X new generation fighter program developed jointly with South Korea, of which it has ordered 50 examples.

It is likely that the country will seek to expand its defense capabilities in the near future, in all 3 armies, so new programs are very likely in the short term. Like India, Indonesia is very attached to its status as a non-aligned country, and in fact takes care to vary the sources of its Defense equipment programs. It thus uses tanks Leopard 2 German, French Caesar self-propelled guns, Dutch frigates, South Korean submarines and Russian (Su27/30) and American (F16) combat aircraft. Like many emerging countries, however, its armed forces lack standardization. Thus, its land forces use more than 60 types of armored vehicles, around ten artillery systems and 8 different types of helicopters.

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