Indonesia Will Have the Fastest Growing Defence Budget in Asia Pacific Over The Next Five Years

Global Defence Spending is down, but Asia’s spending is up. That is according to the Stockholm International Peace Research Institute (SIPRI), which released the latest edition of its annual measure of military expenditure worldwide for 2014. SIPRI reported that, in 2014, global military spending dropped slightly by 0.4 percent in real terms, despite the growing instability and conflict in the Ukraine.

In Asia, however, SIPRI states that spending rose by 5 percent.

This is further emphasized by Analysis: Five Key Global Defence Budget Trends for 2015. Some conditions – further cuts to government spending in the West and declining oil revenues in the Middle East – have held up the recovery of global defence expenditure. However, unlike in the Middle East and North Africa regions, this slump of oil price is expected to give a positive effect for the Asia-Pacific region, where its government finances. The growth in Asian Defence Expenditure is expected to accelerate from 3.3 percent in 2014 to 4.8 percent in 2015. “By the end of the decade, regional spending is expected to reach around $550 billion, or around a third of all global expenditures” said Caffrey, quoted from Indonesia Will Have the Fastest Growing Defence Budget in Asia Pacific Over Next Five Years

In the Asia-Pacific region Indonesia is one of the nations that are expected to show a significant growth in the defence budget. A new analysis by IHS Inc. states that Indonesia will have the fastest growing defence budget in the Asia-Pacific region over the next five years. Indonesia’s defence budget would increase about 17 percent in 2015, according to IHS, from IDR 83.3 trillion ($6.3 billion) to IDR 97.4 trillion ($7.4 billion), and is expected to grow at 14 percent a year until the end of the decade (average annual growth). Overall, Indonesian defence expenditure would pass IDR 180 trillion ($14.3 billion) annually by 2020.

Referring to the Ministry of Defence’s shopping list, Ediwan Prabowo, noted that the Navy and Air Force would receive increased budgets. Furthermore, the Indonesian Navy will focus on improving domestic products, while the government plans to replace the F-5 Tiger fleet in service with the Air Force.


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