President to increase defense budget by Rp 7 trillion

President Susilo Bambang Yudhoyono says the government is planning to increase its defense budget by 20 percent next year to Rp 40.6 trillion (US$4 billion), part of which will be used to replace aging weaponry in the military.

He said in Bandung on Friday the government would propose to the House of Representatives an increase by Rp 7 trillion (US$700 billion) in the country’s defense budget for the fiscal year 2010 from the current Rp 33.6 trillion.

“We will incorporate it [the defense budget increase] in our draft for the 2010 state budget. We’ll be finalizing the plan within the next two weeks,” Yudhoyono said after witnessing the handover ceremony of 40 armored personal carriers (APCs) from state weaponry manufacturer PT Pindad to Indonesia’s Army.

“Then systematically we will head toward what we call the minimum essential force, which is equal to between Rp 100 trillion and Rp 120 trillion." 

The increases in defense budget, Yudhoyono said, will be enabled with expected economic growth in the country particularly after the global economic crisis eases.

Yudhoyono acknowledged the defense sector was “underfunded”, but reasoned that it had been so because the government had focused on reviving the country’s economy and people’s prosperity following the 1997 Asian monetary crisis and the 1998 May riots.

“Now that our economy and prosperity are improving, and education has received 20 percent of the state budget, it is time to increase our defense budget,” he said, reminding the military to be careful in using the funds.

Besides promising the defense budget increase, Yudhoyono praised PT Pindad for the APCs, which he dubbed as “innovative brilliant works” having quality equal with those produced in other countries.

He also emphasized the need of the country to develop its own weaponry industry and the military to buy only homemade products had they been of good quality and offered in “competitive” price.

Defense Minister Juwono Sudarsono, also witnessing the ceremony, said the 40 APCs were the second instalment of 150 medium six-wheeled APCs the government ordered to PT Pindad in 2007 

He said 20 APCs had been handed over last year, 25 APCs would be given by the end of the year, and the rest, along with four four-wheeled APCs, would be handed over next year.

The contract for all the 154 APCs worth Rp 1.12 trillion, which includes spare part costs, as well as training and transportation fees.

SBY said the APCs would be vital equipment for the “standby force” Indonesia was planning to form.

“The TNI [Indonesian military] and the Defense Ministry are preparing for a peacekeeping center in which the standby force will be integrated.

“We will send the force for peace-keeping missions to any areas in the world needing them and establish Indonesia’s position at the international level."