Indonesia must be prudent with military spending, president says

JAKARTA (Reuters) – Indonesian President Joko Widodo on Thursday emphasised the importance of military hardware modernisation but warned any spending should be done wisely as the state budget was limited.

The archipelago nation of 270 million people, Southeast Asia’s biggest economy, is seeking to modernise its military but has lagged its regional peers in recent years.

“Spending for military hardware must be done wisely, in terms of the amount or allocation,” Jokowi, as the president is known, said during an armed forces parade.

Defence Minister Prabowo Subianto, a likely presidential candidate seeking to replace the outgoing Jokowi next year, has led a series of procurements of late, including 42 Dassault Rafale fighter jets for $8.1 billion, 12 new drones from Turkish Aerospace worth $300 million, and 12 Mirage 2000-5 fighter jets valued at $800 million.

Jokowi in July also warned his cabinet to maintain a “healthy” budget as he highlighted outsised spending by the security agencies, including the defence ministry.

For the past decade, Indonesia’s defence spending per capita and as a percentage of gross domestic product has been the lowest among Southeast Asia’s six emerging market economies, according to data from the Stockholm International Peace Research Institute (SIPRI) think tank.

(Reporting by Ananda Teresia; Editing by Martin Petty)