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Why is the defense budget so low? For a country so large and in an area that is quickly militarizing, I'd expect them to spend more that just $9-10B or 0.6% a year on defense.Despite many acquisition, including aircraft carrier, Indonesia defense budget for 2026 is 9 billion USD according to latest statement from Finance Ministry (Today when he is asked about J 10 acquisition).
Compare it with 2026 projected GDP from IMF at 1.55 trillion USD, Indonesia defense budget for 2026 is less than 0.6 % of GDP. The smallest in South East Asia, even possibly the world in term of defense budget relative to GDP.
Many acquisition is supported by soft and long term loan. And Indonesia gov debt to GDP ratio is also small at less than 40 % of GDP with small budget deficit at less than 3 % of GDP.
Why is the defense budget so low? For a country so large and in an area that is quickly militarizing, I'd expect them to spend more that just $9-10B or 0.6% a year on defense.
Is Indonesia affected significantly by the island dispute in the South China Sea?The reason our defense budget is at below 1 percent of our GDP is because we dont have state level threat
Nope, we are the least affected despite we have big area there. It is because it is only in small area of our EEZ that is inside China nine dashline because ours are in the edge of SCS
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Well the 9 billion USD is the yearly defense budget, but actual defense spending are larger because majority of our defense equipment acquisition using loan, for 2025-2029 the amount of loan to spend is 35 billion USD for defense acquisition, previous 5 years period was at 25 billion USD for equipment acquisition (including ammunition like missiles).
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The reason our defense budget is at below 1 percent of our GDP is because we dont have state level threat because we are like the mammoth on the region, the one that is feared.....It is unlike South Korea, Pakistan, India, and countries in Middle East.with real state level threat.
But the defense budget is likely to increase in the coming years, following our GDP growth. Once our GDP per capita exceeds 8000 USD (currently at 5083 USD -2025) inshaAllah, I think we are pretty ready to have defense budget at 1.5% of our GDP and it is more likely to be true if our defense industry shows meaningful improvement
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FPDA—not fade away
21 Oct 2014
|Euan Graham
Indonesia’s still the most important external factor bearing upon the FPDA. Although not officially acknowledged, the FPDA was created in the shadow of Confrontation as the successor to the Anglo-Malayan Defence Agreement, to provide a non-binding level of deterrence to Malaysia and Singapore against the return of Indonesian demagoguery (the arrangement obliges parties simply to consult in case of external attack on the Peninsula).
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FPDA—not fade away | The Strategist
Three years ago the Five Power Defence Arrangements (FPDA) celebrated its 40th birthday, an anniversary that sparked a flutter of international curiosity about this most eclectic of regional security frameworks. By way of animal analogy, ...www.aspistrategist.org.au
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