Can Indonesia Afford Its Big Military Modernization Plans? – The Diplomat

Indonesia’s progress on main protection acquisitions below Minister of Protection and presidential candidate Prabowo Subianto has continued apace in current weeks. An extended-gestating deal for Indonesia to purchase 24 F-15 fighter jets moved one step nearer to completion in August, as Prabowo flew to america and inked a Memorandum of Understanding with Boeing.

The deal, which nonetheless must clear some regulatory hurdles, can be value nearly $14 billion. On the identical journey, Prabowo additionally paid a go to to Lockheed Martin the place an settlement for Indonesia to amass twenty-four Black Hawk helicopters was signed.

Additionally in August, Indonesian state-owned shipbuilder PT PAL held an official keel-laying ceremony for the Merah Putih frigate challenge. Merah Putih refers back to the colours of the Indonesian flag and has very deliberate nationalist overtones. The challenge includes the development of two frigates based mostly on the Arrowhead 140 design to be constructed by PT PAL in its Surabaya shipyard below license from the UK’s Babcock.

They would be the most superior floor combatants within the Indonesian Navy upon completion, and characterize an formidable step ahead by PT PAL when it comes to indigenous manufacturing capabilities (after all, we must anticipate just a few years till the challenge is additional alongside to see how superior these capabilities really are). Indonesia additionally finalized a $300 million deal to purchase 12 ANKA drones from Turkey. Supply is predicted in late 2025.

These are new additions to Indonesia’s ongoing air and naval upgrades, which embrace one other main deal to buy as much as 42 Rafale fighter jets from France’s Dassault for $8 billion. 5 new C-130J Tremendous Hercules from Lockheed Martin are at present being delivered, and two Atlas A400Ms from Airbus have been ordered.

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Native shipyards are turning out quick assault craft and offshore patrol automobiles, whereas PT PAL has stepped up manufacturing of amphibious transport ships and just lately co-produced a pair of SIGMA 10514 frigates with Dutch shipbuilder Damen. The Ministry of Protection just lately signed a contract with France’s Thales for long-range army radar, a deal that’s more likely to embrace some know-how switch and upskilling of Indonesian counterparts.

Clearly, the Indonesian army is seeking to modernize and enhance its capabilities and these efforts have accelerated throughout Prabowo’s time period as protection minister. One of many questions raised by the tempo and scale of those acquisitions is the place Indonesia can afford it. One other query is whether or not there’s some broader strategic logic driving this, and if that’s the case, what’s it?

The reply to the primary query is, for my part, sure, Indonesia can afford to extend its protection spending. Each time a brand new deal is introduced, an enormous headline quantity is splashed round within the media. The Rafales and F-15s alone will value an estimated $22 billion. Given Indonesia’s historical past with debt and monetary crises, there’s usually a knee-jerk response to such massive monetary outlays. The state has already been spending closely on different high-profile and controversial initiatives resembling the brand new capital metropolis and the Jakarta Bandung high-speed rail, so tens of billions of {dollars} in public cash going towards army tools might be seen as extreme.

In actuality, Indonesia spends lower than 1 p.c of GDP on protection. By comparability, Singapore – a a lot smaller nation – sometimes spends round 3 p.c of GDP on protection. Furthermore, Indonesia’s fiscal place shouldn’t be as precarious as some folks appear to suppose. True, public spending has elevated significantly below Jokowi however income from tax receipts has additionally been rising and Indonesia’s debt-to-GDP ratio stays manageable. We must also keep in mind that giant expenditures are paid again over a few years, so it’s not just like the Ministry of Finance has to give you $22 billion in money tomorrow.

The extra essential query shouldn’t be whether or not Indonesia can afford this army tools, it’s whether or not they’re getting good worth for it. As I wrote in a earlier submit, Indonesia approaches army modernization in a really transactional method. It’s really written into legislation: main protection methods must be produced domestically, and when that’s not doable purchases from overseas events ought to embrace know-how transfers and upskilling.

A lot of the offers talked about above contain some type of co-production or data sharing supposed to switch expertise and capabilities to Indonesian corporations like PT PAL. Whether or not this really occurs is one other query, however that’s no less than the logic that drives these massive acquisitions. It is usually why we must be cautious about framing Indonesia’s army modernization in broad geopolitical phrases, as some form of arms race or hedging technique particularly supposed to stability or deter China.

The reality is definitely a lot less complicated than that. Indonesia seemingly desires to extend its army capabilities throughout a time of sharpening geopolitical tensions. However the motive they’re turning to protection corporations in Turkey, France, the UK, and (more and more) america shouldn’t be essentially a part of a grand hedging technique, however as a result of Thales, Airbus, Lockheed, Babcock and Turkish Aerospace are keen to share manufacturing, promote licenses, practice Indonesian mechanics and engineers and provides Indonesia what it actually desires: indigenous manufacturing capabilities.