Indonesia in Military Balance 2013 – 2014

From: The Military Balance IISS

Indonesia’s efforts to improve its armed forces’ capabilities are guided by the notion of a Minimum Essential Force (MEF), developed after concern that defence-funding levels in the 2000s had fallen below acceptable levels. Political and military leaders in Jakarta recognise the need to provide more substantial defences against external threats to Indonesia’s extensive maritime interests. But they are also aware of the need to avoid being entrapped in a regional arms race and unduly diverting national resources from crucial social and developmental spending.

Civilian governments in Jakarta over the past decade have found it politically expedient to expand naval and air capabilities, as this has moved resources and influence away from the army, which dominated Indonesian politics from 1966–98 under President Suharto. However, the army has sought to retain its extensive territorial structure, which acts as an apparatus for intelligence-gathering and, its critics allege,indirect political influence throughout Indonesia.

The army has also worked to keep its role in maintaining internal security. The separatist wars in Timor Leste and Aceh have been resolved, via independence and political autonomy respectively, but a separatist struggle continues in West Papua and Indonesia’s armed forces are involved in suppressing this uprising.

Strategic relations

Indonesia’s broad strategic alignment since the mid-1960s has been towards the West, although the country remains non-aligned. Western military sanctions during Indonesia’s occupation of Timor Leste between 1975–99 significantly affected the international outlook of its political and military elites. One outcome of this is Indonesia’s present reluctance to depend completely on Western sources of military equipment. This has led Jakarta to continue buying equipment from diverse sources, while using technology-transfer agreements with foreign suppliers to develop its defence industry.

During 2011–12, Indonesia reached agreement with the US on the supply of 24 F-16C/D combat aircraft. It will also maintain its Russian-supplied Su-27s and Su-30s while participating in South Korea’s K-FX project to develop an advanced combat aircraft.

After a hiatus following the Australian-led military intervention in Timor Leste in 1999, defence ties with Canberra revived in the wake of the 2002 Bali terrorist attacks. In September, the two countries announced a Defence Cooperation Agreement (DCA) and Canberra said it would donate surplus C-130H transport aircraft to Jakarta. The DCA, according to Australian Defence Minister Stephen Smith, provides a framework for ‘practical cooperation’ in areas like counter-terrorism, humanitarian assistance and disaster relief, and intelligence- and informationsharing. It was also evident that Australia hoped to develop defence-industrial cooperation with Indonesia.

Defence economics

Indonesia’s defence planning is framed by the government’s Medium-Term Development Plans for 2010–14 and 2015–19, as well as by a Long-Term Plan for 2010–25. Defence planning priorities were outlined in the 2010 Decree of the Minister of Defence on the Vision and Mission of Defence Planning. Procurement requirements were detailed in the 2010–14 Defence Strategic Plan, particularly the equipment levels required for the Minimum Essential Force (MEF). Personnel levels will be maintained within the armed forces, or Tentara Nasional Indonesia (TNI), with a focus on organisational structures and policies to enable ‘right sizing and zero growth’; military education and training will also be improved. The drive to attract personnel has led to ministry focus on welfare benefits relating to performance, meal allowances, healthcare, insurance, housing programmes, and special assignment allowances.

Increased budgets in the National Budget Notes of 2013 indicate a desire to improve force and equipment readiness. For instance, by 2014, ground forces’ readiness is planned to reach above 80%; naval force readiness to a greater than 40% average, while air- force readiness is planned to surpass 70% on average. Current readiness status is unknown

Defence budgeting

In August 2012, during a rare special cabinet coordination meeting at TNI Headquarters, President Susilo Bambang Yudhoyono reinforced his commitment to develop the armed forces by boosting the defence budget. In 2004, the budget amounted to IDR 21.7tr (US$2.4bn). It is now planned to reach IDR77.7tr (approximately US$8.3bn) in 2013. On average, budgets have seen 8% annual growth over the previous ten years, and this trajectory is expected to continue over the next five years.

However, while the overall defence budget as a percentage of GDP remains around 0.8%, there is debate in Indonesia about possibly raising future defence budgets to around 2% of GDP. It remains unclear if GDP growth would permit such disbursements, given other sectors of government spending, but the fact remains that meeting Jakarta’s strategic concerns, as well replacing ageing weapons systems and promoting professional armed forces, will be costly.

During the Suharto era, the TNI had business interests that provided the armed forces with a source of off-budget defence funding. This practice was prohibited by legislation in 2004, and no longer remains significant.

Procurement

In a January 2012 meeting of TNI commanders, it was announced that the army would acquire 103 Leopard2A6 tanks from Germany; a previous attempt to procure Leopardsfrom the Netherlands collapsed. The navy (TNI-AL) plans to boost capability with an initial three (and perhaps ultimately as many as ten) South Korean Chang Bogo submarines (based on the German Type-209), which local industry will help build. In June 2012, Indonesia agreed to buy an additional Sigma-class frigate, to be assembled in Indonesia from modules made in the Netherlands. This could be the precursor to a major construction programme involving as many as 20 ships. Local industry has continued to build smaller naval vessels, including a 63m trimaran with stealth technologies and suitable for the sea-denial role.

In August, Indonesia reached agreement with China to locally produce C-705 anti-ship missiles. The navy will increase its Regional Sea Commands from two to three, while the marines will gain an additional division and will receive more BMP-3F amphibious infantry fighting vehicles.

Indonesia has operated Block 15 F-16A/Bs since the 1980s, and in November 2011 requested 24 upgraded F-16 C/Ds from the US. A month later, Jakarta ordered a further six Su-30MK2 aircraft from Russia. Air mobility will be augmented with the transfer of four refurbished C-130H Herculestransports from Australia; an MoU was signed in mid-2012. In September 2012, Indonesia took delivery of the first two of nine C-295 medium transports. It is intended that a C-295 final assembly line be established in Indonesia. Meanwhile, in September 2012, Indonesia requested eight AH-64D helicopters from the US; these will supposedly operate against maritime as well as land targets

Defence industry

Development of the domestic defence industry is a priority for the Medium- and Long-Term Development Plans. In the latter half of 2012, parliament debated a defence industry bill aimed at improving existing strategic defence-industry concerns – notably shipbuilders PAL, aerospace firm Dirgantara Indonesia, ground forces concern Pindad, telecoms firm INTI and other smaller defence-technology companies – while boosting the sector’s development more broadly.

In addition to a defence-industry policy committee, the government has established a high-level committee to determine which weapon systems will be produced domestically. Domestically produced equipment will include C-235 maritime patrol variants, Bell 212EP helicopters and naval trimarans with stealth characteristics.

Collaboration is also under way between national shipbuilders PAL and South Korea’s Daewoo Shipbuilding & Marine Engineering, on the three new Chang Bogo submarines the navy is buying. The first will be completed in South Korea in 2015, with the remaining two units built by PAL in Surabaya, which will also assemble modules for the new Sigma-class frigate.