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Government Agrees to Sizeable Expansion in Defense Budget
Camelia Pasandaran | May 04, 2010

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The government has announced a plan to boost the defense budget from 0.9 percent of GDP to between 1.2 and 1.5 percent, citing the need for the military to meet the “minimum essential force” to thwart external threats.

“The increase will take effect next year,” Defense Minister Purnomo Yusgiantoro said on Tuesday after a cabinet meeting with the president at the State Palace.

He declined to give an exact figure for the budget.

The ministry’s 2010 budget is Rp 40.7 trillion ($4.5 billion), most of it allocated to payroll. With GDP this year projected at Rp 5,000 trillion, the ministry’s 2011 budget could top Rp 60 trillion.

“We informed the president that we need the extra funding for our main weapons system, so our military can reach its minimum essential force,” Purnomo said. “We also need to consider budgeting for dealing with foreign exploitation of natural resources and energy in our border areas.”

He said the ministry would scale down its payroll allocation and shift more funding toward weapons procurement, saying the restructured budget would be one of “zero human resources growth.”

President Susilo Bambang Yudhoyono earlier said he had discussed drafting a national defense policy.

“Such a strategic policy will need presidential approval and be valid for five years,” he said. “It will serve as a reference for policies to build up the armed forces and modernize our defenses.”

Yudhoyono claimed that defense budgets prior to 2009 had been relatively small, although the CIA estimates Indonesia’s defense budget in 2005 as around 3 percent of GDP.

“They were small compared to the defense budgets of Asean and other countries and as a proportion of GDP,” the president said. “However, with a growing GDP and increased state budget, now is the time to significantly increase our defense budget.”

He said that the correct long-term national defense strategy was required to use the budget effectively.

“We hope that by 2014, our defense policy and armed forces will be close to meeting our minimum essential force,” he said.