June 01, 2021
through Jon Grevatt and Andrew MacDonald
A draft settlement from the Indonesian presidential office underscored the need to invest $ 125 billion in military modernization until the mid-2040s. The funding proposal is indicative of Indonesia’s military ambitions and growing concerns about it. regional security.
The draft regulation – titled “ Meeting the Defense and Security Equipment Needs of the Ministry of Defense and Indonesian Armed Forces (TNI) 2020-24 ” – was released recently but requires various approvals from the ministries and the government. House of Representatives before being promulgated. The investment plan also highlights Indonesia’s continued dependence on foreign loans.
Indonesia has declared a funding requirement worth $ 125 billion in military investment through the mid-2040s. The country’s modernization needs are believed to include the Lockheed Martin F-16V fighter jet . (Lockheed Martin)
The proposed regulation details the requirement of USD 124.9 billion for financing the modernization of TNI over a period of five “strategic plans” of five years each. The first strategic plan spans 2020-24 and coincides with the final phase of the TNI Minimum Essential Force (MEF) program, while the last will be 2040-2044.
The document proposes funding of $ 79 billion for defense equipment over this 25-year period, $ 32.5 billion for sustainment and the remaining $ 13.4 billion for interest payments on loans. foreigners.
The regulation gives priority to sourcing TNI modernization needs from local industry. However, he declares: “In the event that domestic products cannot be [procured], then foreign products can be used. “
When defense equipment is imported, the regulation identifies the obligation to apply “technology transfers and offsets” to support local industry participation in procurement. This industrial strategy also includes the provision of countertrade through which Indonesia seeks to export local products partly in exchange for materials.
Already subscribed to Janes? Read the full article via customer login
Interested in subscribing, see What we do
A draft regulation from the Indonesian presidential office underscored the investment requirement …