Indonesia Military Powers Up

Flush with cash, Indonesia is beefing up its military with a wish list of F-16s, rocket systems and a destroyer.

On Monday, Indonesian Defense Minister Purnomo Yusgiantoro, flanked by the country’s military leadership, announced that after 10 years of frugality on the part of the military designed to give precedence to political reform, the country was now entering an intensive period of military procurement. Coming from many countries, such talk would sound reckless, if not dangerous. But coming from Indonesia, it should be welcomed.

Purnomo also spelled out his 2012 wish list, which includes tanks, multiple launch rocket systems, a guided missile destroyer, and retrofits for ex-U.S. F-16s and ex-Australian C-130 transport planes. And much more new equipment is to follow before the end of President Yudhoyono’s term in 2015, not least three new South Korean submarines.

For the first time in recent memory, the Indonesian defense ministry has money in its pocket. Announcing the acquisition of an additional six Su-30 Sukhoi fighter aircraft over the weekend, Purnomo could be heard to boast: “Our economy is very strong and we have a defense budget of Rp 150 trillion [$16.3 billion].” While that figure represents a multi-year procurement budget, Purnomo is right to feel flush. In December, the government decided to revise the defense allocation upwards, giving defense a 53 percent year-on-year increase. That presents Jakarta with a 2012 defense budget of $7.9 billion – a total that should finally bring the defense budget above the 1 percent of GDP mark (just).

It has long been the stated aim of the Yudyohono administration to elevate defense spending to 1.5 percent of GDP by 2015. Analysts have often speculated that the government lacks the political will to make that happen, but the huge 2012 budget hike means that this goal is now attainable. Allocating 1.5 percent of GDP to defense in 2015 would yield a defense budget in the $14 to 15 billion range, assuming the Indonesian economy continues to grow at 6 percent to 7 percent annually. That means that Jakarta now needs to grow its defense budget by 20 percent to 25 percent in 2013, 2014 and 2015 to reach its target – which is doable, so long as the wider economy stays healthy. And since the Indonesian economy is exceptionally well insulated against global shocks, continued growth is likely.

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The numbers are highly significant, because a Southeast Asia in which Indonesia has a $15 billion defense budget starts to look like a very different place. It would see Indonesia overtake Singapore as the region’s biggest military spender, and leave others like Malaysia and Thailand trailing a long way behind. Since Indonesia is Southeast Asia’s biggest country by far, its neighbors will hopefully look on this as a natural development and not try to compete – which they would in any case struggle to do. So long as Indonesia remains on its current trajectory of democratic consolidation, and it remains the hub of the ASEAN community, its emergence as a military power shouldn’t destabilize the region.

Indonesia’s rise is naturally attracting attention. China’s Defence Minister, Gen. Liang Guanglie, met the Indonesian ambassador on Monday, in an encounter that Xinhua described under the headline “China, Indonesia eye for [sic] closer military links.” But mainly it’s China that’s keen to foster closer military ties with Indonesia. Apart from a joint Sino-Indonesian missile production program initiated in early 2011, China is yet to find a significant role in Indonesia’s rise to strategic prominence. While Australia, the Netherlands, Russia, South Korea and the United States are now actively all involved in the re-equipping of the Indonesian armed forces – often on terms that are quite favorable to Jakarta – China has made few inroads. Its offer of JF-17 fighters, for example, doesn’t appear to have aroused much enthusiasm among the Indonesians.

Indonesia’s military modernization won’t be without its setbacks: already, attempts to buy Dutch Leopard 2 tanks have become bogged down in parliament. But with no shortage of friends, and adequate levels of defense funding for the first time in well over a decade, Indonesia seems close to standing up as a regional power. Furthermore, by maintaining a friendly distance from both China and the United States, as Jakarta seems determined to do, it can once again become a leader of non-aligned countries, and an anchor of stability in the Asia-Pacific.