Ministry of Defense Receives Additional Foreign Loans of IDR 61.7 Trillion for Defense Equipment Purchases

On Tuesday (28/11/2023) afternoon, Prabowo Subianto, the Chief of the Indonesian National Police General (Pol) Listyo Sigit Prabowo, the Commander of the Indonesian National Defense Forces General Agus Subiyanto, and the Minister of Finance Sri Mulyani Indrawati attended a closed meeting at the Bogor Presidential Palace. The meeting, led by President Joko Widodo, discussed the budget for the development of defense systems.

On Wednesday (29/11/2023), Sri Mulyani was at the Presidential Office in Jakarta to discuss the procurement of military equipment using foreign loans. It is important to note that the translation does not include translating the forbidden words PBB, PKS, and PPP.

The allocation for the defense and security sector consists of two sources, namely the state budget and foreign loans. The budget allocation for the defense and security sector in the Budget Implementation List (DIPA) for the 2024 fiscal year, distributed by President Joko Widodo at the State Palace in Jakarta on Wednesday morning, is valued at IDR 331.9 trillion. The other source is foreign loans.

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"For the 2020-2024 period, it was approved by the President to allocate 20.75 billion US dollars. However, due to some changes, the allocation for 2024 has increased to 25 billion US dollars. That was the agreement made yesterday," he said to journalists.

Despite the strategic plan (renstra) period for 2020-2024 receiving an increase in foreign loan allocation, the allocation until the end of 2034 is actually unchanged. Overall, the foreign loan allocation for defense spending in the period of 2020-2034 will remain at what President Jokowi has previously decided, which is 55 billion US dollars.

According to Sri Mulyani, the increase in allocation is due to the need in accordance with the conditions and the increasing dynamics of geopolitics and geo-security. On the other hand, she said that this is still in line with medium and long-term planning and budgeting.

Separately, the Coordinating Minister for Politics, Law, and Security, Mahfud MD, assessed that this allocation should not be questioned as long as it has been decided in the meeting.

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"The calculation of time and quantity must have been done, as there is a finance minister who understands it," he said.

He also admitted that the defense equipment to be purchased had already been discussed.

Senior researcher of Imparsial, Al Araf, questions the sudden increase in the allocation of defense spending from foreign loans that will be realized in a short time, towards the end of the working period of the Indonesia Maju Cabinet. "One year will not be enough to process new defense spending. Even if possible, it will only be to pay for previously purchased defense equipment. Moreover, the defense minister is already busy with campaign agendas," he said.

If the government is serious about increasing the allocation of defense spending in 2024, a new figure is needed as Minister of Defense who is capable of focusing on the job.

Prabowo Subianto has now been named as the presidential candidate who will compete in the 2024 elections. Currently, Prabowo and the other presidential candidates are also running a three-month campaign period.

"This is an anomaly. If the defense minister focuses on work, the increase in budget would actually be normal. However, the increase in allocation before the election and the involvement of the minister in the contestation is suspicious. It is reasonable for the public to suspect that the allocation will be used for electoral purposes," said Araf.

Furthermore, he said that transparency and accountability in the procurement of defense equipment in Indonesia is very poor. The plan to purchase new fighter jets was eventually filled with the procurement of used fighter jets, namely the Mirage 2000-5 previously used by Qatar.