Defense budget management key to military transformation

by Annisa Yudha and Anton Aliabbas

 

ADINANTON-The 2020 state budget allocates Rp 131.2 trillion (US$9.26 billion) for defense, up 19.8 percent from 2019. For the second time in the Reform Era, defense spending outweighs expenditures on other sectors like education and infrastructure. However, whether the rise in military spending will significantly impact the modernization of the weaponry system remains to be seen.

Nevertheless, the bigger budget shows that President Joko “Jokowi” Widodo, a civilian, pays great attention to the defense sector. The 2020 defense budget accounts for 0.75 percent of projected gross domestic product (GDP) that year, which is estimated to be Rp 17.46 quadrillion. Indeed, the 2020 defense budget remains far below Jokowi’s ambitious figure of 1.5 percent of GDP.

Since taking office in 2014, Jokowi has consistently increased defense spending, except in 2018 when the government took austerity measures. However, in 2018, military spending was still 24.68 percent higher than the 2014 mark, which was set by Jokowi’s predecessor Susilo Bambang Yudhoyono, a former Army general.

A huge defense budget, however, does not necessarily translate into a stronger national defense system because of two problems that have consistently stood between the Defense Ministry and effective use of its budget allocation.

First is budgetary indiscipline. Although the defense budget has been increased significantly in the last five years, the problem of budget absorption, both underspending and overspending, has persisted. In 2016, for instance, only 85.8 percent of the defense budget was spent. On the contrary, in 2017, the defense budget was exceeded by Rp 2.4 trillion, partly due to the implementation of the new Indonesian Military (TNI) structure.

Furthermore, the Supreme Audit Agency (BPK) awarded a qualified opinion (WDP) to the Defense Ministry and TNI’s financial reports in four consecutive years from 2015 to 2018. Only in 2019 did they receive an unqualified opinion (WTP), the best audit grade.

Second, there is an obvious policy implementation gap. As laid out in his nine-point development program (Nawa Cita).

President Jokowi envisions the development of Indonesia’s naval capability as a respected regional maritime force. In the National Medium-Term Development Plan, the defense sector gave priority to strengthening maritime security and and security of border areas and the outermost islands.

However, the policy was not clearly reflected in spending on the modernization of TNI’s primary weaponry system. Despite Jokowi’s global maritime fulcrum (GMF) vision, modernization of the Navy was not his top priority. The Navy received the smallest budget allocation of all armed forces for two consecutive years from 2015 to 2016. Since 2017, the Navy has been given the second largest allocation for modernization.

The Army has consistently received the lion’s share of the TNI’s modernization budget. For the 2020 modernization program, the Army, Navy and Air Force will get Rp 4.59 trillion, Rp 4.16 trillion and Rp 2.11 trillion, respectively, which means development of our defense system to support the GMF vision will remain land-based in orientation.

Jokowi’s pledge to accelerate modernization of the primary weaponry system during his first term did not really materialize. This is evident in the downward trend in the TNI’s capital expenditure between 2015 and 2018.

In 2018, for instance, capital expenditure totalled only Rp 19.1 trillion, less than 18 percent of total defense spending. This marked the lowest capital expenditure in the last five years.

The biggest portion of the defense budget has gone to routine spending, which includes salaries, personnel expenditures and personnel welfare. According to the Finance Ministry, the defense budget for 2020 has been increased mostly to cover a rise in performance allowances for Defense Ministry employees.

In his second term, Jokowi needs to find ways to correct defense spending. Without any adjustments, the rising defense budget will not allow the TNI to modernize its primary weaponry system.

An early retirement scheme to overcome a surplus of middleand high-ranking officers and postponement of “questionable” programs like the bela negara state defense training are two options that Jokowi and his new defense minister, Prabowo Subianto, could consider to increase the TNI’s capital expenditure.

Undeniably, improving soldiers’ welfare requires attention as much as weaponry modernization. Both are vital to maintain the TNI’s professionalism. Budget discipline will help the Defense Ministry reach these two goals.

The increase in the defense budget also requires the Defense Ministry to improve its governance and budget management. To promote good governance, the ministry should upload its annual financial report on its official website for the sake of transparency and accountability. This will allow the public to monitor and assess whether the taxpayers’ money is well spent.

The long-standing problem of low capital expenditure in the defense sector needs a solution sooner rather than later if we wish to build a defense system that can adequately protect the whole nation.

 

*Annisa Yudha and Anton Aliabbas work at human rights monitor Imparsial as a researcher and a senior fellow for security sector reform, respectively.

Source: The Jakarta Post 5 November 2019

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