Indonesia to increase defense budget to $18.7 billion Thailand needs to follow suit -Updated

According to Xinhua

2016-02-23 20:03:49

JAKARTA, Feb. 23 (Xinhua) — Indonesian President Joko Widodo on Tuesday said that he sought to increase the country’s defense budget in an effort to support facilities at the country’s military.

Joko said that Indonesian government would raise the allocation for defense and security to at least 250 trillion rupiah (about 18.717 billion U.S. dollars), or 1.5 percent of the country’s GDP, in three years.

The president added that the hike could be achieved if the country’s economy, which is the largest in Southeast Asia, increased 6 percent.

“Going forward, professionalized armed forces must be boosted by the development of weaponry,” Joko said at the State Palace.

Indonesia’s economy picked up to 5.04 percent at the final quarter of last year from 4.79 percent at the previous three months ended September amid the country’s massive efforts to boost investment climate.

Former president Susilo Bambang Yudhoyono previously said that Indonesia planned to step up its weaponry at the level which he called “the essential level,” as the country had been long not to modernize weaponry.

However, President Jokowi insisted to use more domestically manufactured weaponry in part to boost the competitiveness of the country’s weaponry industry.

Terrorism, transnational crime and insurgency are among the main challenges being faced by the Indonesian military.

Source @Xinhua

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Authors Note:

Thailand needs to up it’s defense spending in accordance with our neighbors or else we will be left behind with outdated equipment.  As currently ranked as the 2nd most powerful armed forces in SE Asia after Indonesia by Global Fire Power 2016

Thailand needs to increase defense spending to 3% of GDP or around $12 billion

However, according to SIPRI 2015 Yearbook Thailand is ranked No.1 in SE Asia and No.16 in the world while Indonesia is ranked 2nd in SE Asia and No.19 in the world. (see table below)

Top-5-world-military-2015-report*data provided by Stockholm International Peace Research Institute’s (SIPRI) Yearbook 2015.

Current Military Spending by SE Asia 2014 (The Stockholm International Peace Research Institute (SIPRI) recently released their 2014)

Military-Expenditures-in-2014_800ASEAN countries military expenditures in 2014 in current U.S. dollar terms. Source: SIPRI dataset, graphic prepared by Zachary AbuzaMilitaryExpenditures_800Southeast Asian military expenditures percent change from 2010-2014 in current U.S. dollar terms. Source: SIPRI dataset, graphic prepared by Zachary Abuza.Southeast Asian countries’ defense spending as a percentage of GDP and defense spending as a percentage of overall government spending. Source: SIPRI dataset, graphic prepared by Zachary Abuza.

Thailand defense budget accounts for only 6.6 percent of government spending below the regional average of 8.8 percent.

Southeast Asian military expenditures from 2010-2014 shown in millions of current U.S. dollars. Source: SIPRI dataset, graphic prepared by Zachary Abuza.

Thailand spending is just slightly higher than Malaysia (see above chart and below) the chart does not reflect the fact that the Royal Thai Armed forces comprise of over 360,000 personal compared vs Malaysia 110,000 personal and Indonesia Armed Forces of 396,000 personal.

Southeast Asia’s per capita military expenditure for 2014, in current U.S. dollars. Source: SIPRI dataset, graphic prepared by Zachary Abuza.

After a sharp fall due to the Asian financial crisis in 1997, Indonesia has seen the largest increase in military expenditure in the region. Between 2001 and 2014, defense spending increased from under $1 billion to over $7 billion, a 664 percent increase, and a 784 percent increase in rupiah. The sharpest rise occurred after President Susilo Bambang Yudhoyono came into office in October 2004. Between 2005 and 2013, defense spending rose 290 percent, before falling slightly in 2014. Between 2013 and 2014, military spending fell by 16 percent in current U.S. dollars, but only 4.8 percent in rupiah. Source cogitasia.com

Indonesia_800Indonesian military expenditure in the post-Suharto era, shown in current U.S. dollar terms. Source: SIPRI dataset, graphic prepared by Zachary Abuza.

In 2014, Indonesia accounted for 18 percent of all of ASEAN defense spending. Military spending accounted for 4.1 percent of total government spending in 2014, less than half of the regional average of 8.8 percent. Indonesian defense spending as a percentage of GDP was the lowest in the region at 0.8 percent, well below the average of 2.2. percent. Per capita defense spending in Indonesia is $27.80, the second lowest in the region after Cambodia. Source cogitasia.com

Thailand-2005-2016_800Thailand’s military expenditure from 2005-2016 in millions of current U.S. dollars. Note that 2016 spending is projected based on a budget proposed in April 2015. Source: SIPRI dataset, graphic prepared by Zachary Abuza. (NOTE THAI FIGURES ARE FOR 2016 WHILE THE REST ARE 2014)

Surprisingly, Thai military expenditure was only 1.5 percent of GDP in 2015, below the regional average of 2.2 percent. Likewise it was only 6.6 percent of government spending below the regional average of 8.8 percent. Thailand continues to lag in per capita spending, at $85.30, below the regional average of $392.

Malaysia has seen a steady but modest increase in military spending between 2010-2014, 27.6 percent, below the regional average of 37.7 percent. Malaysia has the fourth largest defense expenditure in the region, representing 13 percent of the ASEAN total in 2014. Defense spending fell by 1.6 percent between 2013 and 2014 in U.S. dollar terms, but increased 5.5 percent in ringgit. Defense represented a modest 5.4 percent of government spending and only 1.5 percent of GDP, well below the regional average of 2.2 percent in 2014. Per capita defense spending is $163 in Malaysia, third in ASEAN. Per capita spending increased 23 percent between 2010 and 2011, but has been flat since then.  Source cogitasia.com

Philippines-Malaysia-Vietnam_800

Vietnam has seen the steadiest increase in military expenditure in the region. In the decade between 2005 and 2014, its military spending increased by 314 percent. In that time it has developed the most lethal power projection capabilities in Southeast Asia, including one of the largest navies, with advanced Kilo-class submarines, and the most sophisticated missile force in the region. Vietnam’s $5.73 billion defense budget in 2014 was the fifth largest and 11 percent of the ASEAN total. (Note: Flaw in reporting as in 2014 Thailand spent $5.7 billion therefore, the same as Vietnam even though Thailand is the second largest economy in SE Asia) Defense expenditure rose 14.1 percent in US$ and 15.4 percent in dong, between 2013 and 2014. Between 2010 and 2014, Vietnamese military spending increased 59.1 percent in U.S. dollars and 81 percent in dong. Vietnamese defense spending in 2014 was 2.2 percent of GDP, the ASEAN average. As a share of total government spending, 8.3 percent, it was just under the regional average of 8.8 percent. Per capita spending in Vietnam is still low, only $46.

The Philippine government is starting to make long needed investments in its military. Defense spending was $3.3 billion in 2014, or 9 percent of ASEAN’s total. In current U.S. dollars, this was a 2.5 percent decline from 2013, but actually a two percent increase in pesos. Between 2010 and 2014, Philippine defense spending increased, 35 percent, near the regional average of 37.6 percent. Military expenditure in 2014, represented 1.1 percent of GDP — half of the ASEAN average –, and six percent of government spending, below the regional average of 8.8 percent. In terms of per capita spending, the Philippines, at $32.90, was the third lowest in ASEAN in 2014. The government of President Benigno Aquino is implementing a $1.8 billion modernization program, but it comes after years of neglect. Vietnam has a far more robust military than the Philippines, despite similar budgets. Source cogitasia.com

Southeast Asian military expenditures percent change from 2010-2014 in current U.S. dollar terms. Source: SIPRI dataset, graphic prepared by Zachary Abuza.ASEAN8001

See diagram below showing trend of military expenditure into 2021 Thailand shows very little increase compared to it’s peers

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