Indonesia is on a determined mission to modernise its military, as the nation’s self-imposed deadline for upgrading its defense forces nears. This ambitious overhaul is being led by none other than the newly elected president, Prabowo Subianto, a former army general turned defense minister. Prabowo has been actively signing deals to update Indonesia’s outdated military hardware, yet the country remains behind schedule in achieving its targets, even after a significant increase in defense spending.
In November 2023, the Indonesian government approved a 20 percent increase in military spending, bringing the total allocation for the 2020–2024 period to an impressive USD 25 billion (SGD 33 billion). This budget boost, funded largely through foreign loans, was intended to expedite the nation’s long-overdue modernization efforts. However, despite these measures, Indonesia is still struggling to meet its objectives, prompting concern over the pace of progress and the broader implications for national security.
Indonesia’s military modernisation program, known as the Minimum Essential Force (MEF), was designed as a 15-year plan aimed at building a minimal defense capability to protect the country’s sovereignty. Experts widely agree that such a blueprint was urgently needed. According to Khairul Fahmi, a military analyst at the Jakarta-based Institute for Security and Strategic Studies, “Much of our defense equipment is obsolete.”
An alarming 50 percent of Indonesia’s operational military equipment is outdated, leaving the nation ill-prepared for modern warfare. This problem extends beyond land forces; Indonesia, the world’s largest archipelagic country, has long struggled to defend its maritime territories. Despite frequent naval exercises and bold moves like seizing and sinking foreign vessels, Indonesia’s fishermen continue to report intrusions into the nation’s waters, with boats from China, Vietnam, and the Philippines increasingly threatening their livelihoods.
Wahyudin, a fisherman from the Natuna Islands, shared his frustration: “Our coastguard should’ve been there. We’re Indonesians who are making a living in our own backyard. We must be protected.”
The Natuna Islands, situated in the northern part of Indonesia’s exclusive economic zone (EEZ), are at the center of a long-standing maritime dispute with China. Beijing’s expansive “nine-dash line” claim in the South China Sea overlaps with Indonesia’s EEZ near the Natunas, a region known for its rich oil and gas reserves. While China has not explicitly contested Indonesia’s ownership of the islands, its aggressive fishing fleets and maritime patrols in the surrounding waters have sparked diplomatic tensions and military stand-offs. Former President Joko “Jokowi” Widodo himself made several high-profile visits to the Natunas, underscoring Indonesia’s resolve to protect its sovereignty.
In response to mounting security challenges, Indonesia has significantly increased its defense budget. Last year, the defense ministry’s allocation was 144 trillion rupiah (SGD 12.2 billion), making it the second-largest defense spender in Southeast Asia after Singapore. However, Indonesia’s defense spending has consistently remained at just 0.7 to 0.8 percent of GDP over the past decade, the lowest among the region’s six major emerging market economies.
Julia Lau, a senior fellow at the ISEAS-Yusof Ishak Institute, warns that this level of defense spending is insufficient: “Any country that wants to have an effective functioning military should allot about 2 to 4 percent of GDP to defense.”
Indeed, progress on the MEF has been slower than expected. As of 2023, the Indonesian military has only achieved 65 percent of its modernisation goals. Analysts estimate that for the plan to have succeeded, military spending should have been between 1.5 and 2.5 percent of GDP.
Despite these challenges, Prabowo has made significant strides in military procurement. In recent years, Indonesia has signed deals for 42 French-made Rafale fighter jets (USD 8.1 billion), 12 drones from Turkish Aerospace (USD 300 million), and various helicopters and fighter jets from the United States. Yet not all of Prabowo’s plans have gone smoothly. A controversial attempt to buy 12 second-hand Mirage 2000-5 fighter jets from Qatar, worth EUR 733 million (SGD 1 billion), was scrapped earlier this year due to concerns over the aircraft’s age and the high cost.
“Prabowo was writing cheques that the government couldn’t cash,” said Ian Storey, another ISEAS-Yusof Ishak Institute senior fellow. His spree of international arms deals, while ambitious, has faced delays and cancellations as Indonesia grapples with fiscal limitations. President Joko Widodo, before leaving office, urged his cabinet to maintain a “healthy state budget” and flagged the high spending by defense and security agencies as a concern.
Unfazed by these challenges, Prabowo has set his sights on an even more ambitious plan. Known as the Archipelagic Trident Shield, this 25-year modernization initiative aims to transform Indonesia’s military into a formidable force with advanced, integrated capabilities across its navy, air force, and army. The new plan, which also emphasizes investment in cybersecurity, is projected to cost USD 125 billion. The Indonesian finance ministry has already approved funding for the first phase of the project.
However, Prabowo’s vision comes with significant financial implications. His brother and adviser, Hashim Djojohadikusumo, has hinted at the possibility of increasing Indonesia’s debt-to-GDP ratio to as much as 50 percent to fund the program. Currently, Indonesia’s debt-to-GDP ratio stands at 39 percent, one of the lowest in Southeast Asia, giving the country some leeway to borrow. Still, experts like Indra Alverdian, an international relations lecturer at President University, believe the situation needs careful management: “I don’t think it’ll be a problem, but there needs to be accountability for such large expenditures.”
As the new president, Prabowo will have to navigate a complex geopolitical landscape. While Indonesia seeks to assert its rights in the South China Sea, it must also maintain positive relations with China, a key trading partner and investor. Indonesia is currently promoting 81 projects to attract Chinese investment, worth 239 trillion rupiah, and is aiming to boost exports to China to USD 70 billion this year. The delicate balance between safeguarding national security and fostering economic ties will be a key challenge for Prabowo.
Adding to the tension is the ongoing security partnership between Australia, the United Kingdom, and the United States—Aukus—which plans to equip Australia with nuclear-powered submarines. Indonesian defense planners are concerned that Aukus could escalate tensions in the region and spark a new arms race. “Indonesia was wary that Aukus might trigger an arms race in the region,” said Storey.
ASEAN countries, including Indonesia, have responded to growing external pressures by increasing military cooperation. In 2023, the bloc conducted its first-ever joint military exercise, focused on humanitarian assistance and disaster relief, in Indonesia’s South Natuna Sea. Ridzwan Rahmat, principal defense analyst at Jane’s, believes this signals a new era of cooperation: “ASEAN was never established as a military alliance, but there’s been a lot of external pressure on Southeast Asian countries.”
Even as Prabowo pushes ahead with military modernisation, he faces immense domestic challenges. During his presidential campaign, he promised to provide free meals to pregnant women and schoolchildren, an initiative expected to benefit 83 million people and cost 460 trillion rupiah annually. Additionally, Indonesia is investing USD 33 billion in the construction of its new capital, Nusantara, in East Kalimantan, adding further pressure on the national budget.
Khairul Fahmi points out that while Prabowo has committed to gradually increasing defense spending, there are concerns about whether such a large budget can be efficiently managed. “If defense spending increases beyond 0.8 percent of GDP, there will be questions about accountability,” he warned.
Ultimately, Prabowo’s leadership style will likely be marked by his strongman image. “I can see him being a very nationalistic president when he has to be,” said Julia Lau. “If anyone tries to ‘bully’ Indonesia, I fully expect him to come out very strong.”
