IO – The currently-circulating Presidential Regulation draft on the fulfillment of Indonesia’s defense equipment and security tools (alpalhankam) need for the 2020-2044 period has been misunderstood in many ways. Many commentators quickly jumped to the conclusion that the strategic plan is too “ambitious” and “insensitive to the current crisis we are experiencing.”
In my view, there are three sources of misunderstanding. First, people only see the total budget, which totals Rp1,760 trillion, without paying attention to the scheme. Second, people forget that this is a strategic project spanning twenty-five years. And third, people also forget that this is a mere draft of the government’s plan.
Moreover, many people also seem unaware that we are currently in the final stage of the Minimum Essential Force (MEF) program, which started in 2009, to modernize our defense forces over three phases—Phase I (2009-2014), Phase II (2014-2019), and Phase III (2019-2024).
In each phase, the government intends to set aside a budget of about Rp150 trillion for defense equipment. So, on average it would come to Rp30 trillion per annum. As this program will end in 2024, it is quite reasonable that the government would draft a new strategic program as a continuation of MEF.
That is the rationale behind the drafting of Presidential Regulation on alpalhankam.
As we all know, the implementation of the MEF wasn’t as smooth as planned. Based on the Defense Ministry data, as of October 2020 the Indonesian Army only has 77% of the minimum essential force it needs, while the Navy 67.57% and Air Force 45.19%. Based on a rough calculation, if we stay with the current budgeting model, MEF won’t be fully fulfilled in 2024. So, we need a new plan.
I would argue that Defense Ministry’s plan to consolidate a 25-year defense budget allocation to fulfill the country’s alpalhankam needs is a breakthrough and the solution to accelerate the modernization of TNI’s primary weapons. There are at least three reasons why we need to support this plan.
First, this breakthrough will accelerate the modernization of alpalhankam. I am sure we all agree that our defense equipment is not just lacking in quantity, but also quality (70% aged or obsolete). Indeed, a major cause suspected to be behind the sunken KRI Nanggala 402 was its old age. So far, a large portion of TNI’s budget has been spent on servicing and maintaining defense and security equipment that are no longer fit for use.
Secondly, budget-wise, consolidating the 25-year defense budget allocation can increase the defense and security procurement capacity more comprehensively. In addition to quickly raise Indonesia’s bargaining position, I think this method is also more efficient compared to if the procurement is carried out separately and partially.
Measured against the 2020 GDP, which amounted to Rp15,434.2 trillion, this scheme only accounts for 0.6-0.7% annually. In fact, if we refer to the MEF document, ideally our defense budget allocation should have reached 1.5% of GDP since MEF phase II (2014-2019).
So, don’t just look at the Rp1,760 trillion as a lump sum, but also look at the percentage of our GDP for the next 25 years.
Third, this plan is a continuation of the MEF program, which is currently in phase III. Defense Minister Prabowo Subianto is facing threefold challenges in regard to MEF. First, he must seek ways to fulfill MEF. Second, he has to accept the reality that our defense budget is currently constrained by the handling of the Covid-19 pandemic. And third, he must be able to offer a new strategic plan to continue the MEF. So, like it or not, he has to come up with a breakthrough, not “business as usual”. The Presidential Regulation draft on alpalhankam is the answer.
Over the past year, I have personally seen the Defense Ministry’s Gede Sandra Bung Karno University Economic Analyst seriousness and comprehensive efforts to accelerate the fulfilment of MEF. For example, they have reevaluated defense cooperation contracts that were deemed inefficient, opened up window of cooperation with various countries so that we are not dependent on a single country, and lastly, they have also strived to beef up the national defense industry. So, the steps taken by the Defense Ministry have been no less comprehensive. We urgently need to make key breakthroughs to have a strong national defense system in less the time it would normally take.
Other than the things I have mentioned above, I concur that this grand plan certainly still has to be refined and finalized together with the Parliament.