1,700 Trillion for the Defense Sector Burdening and Disregarding the People

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Civil Society Coalition for Security Sector Reform

The Ministry of Defense (Kemhan) is currently designing budget for the defense sector in the context of modernization of 1,700 trillion IDR. The plan is contained in the draft Presidential Regulation on Defense and Security Equipment Tools (Perpres Alpalhankam) which is being prepared by the Ministry of Defense. The 1,700 trillion IDR is planned to be obtained from foreign loans and funds for the budget acquisition process, maintenance and maintenance costs, as well as interest costs for five strategic planning periods and contingency funds. In addition, the budget is also planned to be allocated in the 2020-2024 strategic plan or in other words the budget is planned to be spent within 2.5 years.

The Coalition considers that the current defense system modernization plan with such a large budget is excessive and inappropriate. In the midst of a pandemic condition due to the spread of the Covid-19 virus which has caused economic difficulties in countries, including Indonesia, the budget of 1,700 trillion IDR for the defense sector will certainly burden the people.

Such massive budget at this time is a tangible form of the government's indifference to the lives of the people who are experiencing serious impacts due to the pandemic situation, such as health and economic among others like politics, human rights, among other things.

Moreover, the budget sourced from foreign loans will make Indonesia's debt even bigger. In fact, the current condition of Indonesia's foreign debt is quite concerning. As of March 2021, Indonesia's foreign debt has already reached 6,445.07 trillion IDR. If this was added with another of IDR 1,700 trillion just for the defense sector, this will further drain the people. Furthermore, the attitude of the Ministry of Defense which states that spending on defense equipment through the debt scheme will not feel a loss to the government (APBN) is a misguided attitude, may be a problem, and is unclear.

The Coalition considers that efforts to modernize the defense equipment system are important in strengthening Indonesia's defense forces. However, the improvement efforts need to be carried out in stages, starting from the short, medium and long term. Since 2009, the government has actually designed the program in stages through the MEF (Minimum Essential Force) program. In each stage of the MEF, the government budget is approximately 150 trillion IDR every five years for defense equipment spending, started in 2009 and will be ended in 2024.

In the MEF scheme, in the 2009-2014 period, the Indonesian government has designed IDR 150 trillion to spend on defense equipment. In the 2014-2019 period, the government also again budgeted 150 trillion IDR for the MEF program. So, for the 2019-2024 period, the government should also budget 150 trillion IDR to continue the MEF program. The Ministry of Defense does not need to make a new path through an increase in the defense budget of 1,700 trillion IDR until 2024 and should continue to use the MEF scheme until 2024 of 150 trillion IDR.

The Coalition considers that the excessive increase in the defense equipment budget and exit from the MEF scheme is excessive and has a large political dimension. It is suspected that the budget increase is inseparable from the political interests of the contestation of the winners of the 2024 election which requires political costs.

We consider that the problem of modernizing the Indonesian defense equipment system so far is not necessarily related to the size of the budget. If referring to the MEF scheme, the Ministry of Defense actually already has its own scheme in terms of modernization of defense equipment. The most problematic point in the modernization of the defense equipment system is the issue of transparency and accountability in budgeting in the defense sector, which often results in corruption scandals in the procurement of defense equipment.

Thus, increasing the defense budget without transparency and accountability is equal to giving the political elite a blank check to use the budget for political purposes as well as personal interests in the occurrence of corruption. To this day, the Ministry is still experiencing critical problems related to transparency and accountability. But he always hides behind the shield of “state secrets” which are actually just an excuse to cover up potential irregularities that occur.

Transparency and accountability in the defense sector will only be realized if the government carried out a military justice reform process through the revision of Law no. 31 of 1997 which stipulates that the military is submissive in demanding justice public if involved in a general crime. Without the reform of the military justice system, the modernization of the defense equipment system would always be overshadowed by allegations of corrupt practices.
In addition, although the provisions regarding the procurement of defense equipment have required not to involve third parties (brokers), in reality a number of procurements are still often characterized by this practice. In some cases, their involvement sometimes has implications for allegations of mark-ups (corruption) in the procurement of defense equipment that are detrimental to state finances.

Furthermore, the Coalition considers that other problems regarding the modernization of defense equipment are the lack of priority scale by the Ministry of Defense in making defense planning and his inconsistencies in continuing and implementing the plans that have been made. He must focus on strengthening its main component, namely the Indonesian National Soldiers (TNI), in building defense forces. However, what happened was that he made programs that are irrelevant to its main components, such as the rice field printing program, components of strategic logistics reserves, and other programs that were not relevant to the function of the TNI as a means of national defense.

On that basis, the Coalition of Citizens for the Security Sector Reform:

1. Urges the President to order the Ministry of Defense not to continue the agenda of the 1,700 trillion IDR for the defense sector which comes from foreign debt, because it will further drains, burdens and injure the hearts of the people who are experiencing difficulties and the economic crisis due to the pandemic;
2. Urges the government to continue the defense equipment modernization program through the Minimum Essential Force (MEF) scheme which has been designed since 2009 and will end in 2024;
3. Urges the government to evaluate and audit specifically all defense equipment procurements carried out through the MEF scheme so far, both during the current administration period and the previous administrations;
4. Urges the government to establish a Government to Government (G to G) policy as a permanent method in the process of acquiring the main tools of the Indonesian defense system in the future and completely eliminating the role of brokers, because it has a high risk of problems with readiness defense equipment and a high potential for corrupt practices.

Jakarta, June 3rd, 2021

The Civil Society Coalition for Security Sector Reform (Imparsial, PBHI, ELSAM, HRWG, LBH Pers, ICW, SETARA Institute, LBH Jakarta, ICJR, KontraS, Centra Initiative, Public Virtue Research Institute)

Contact person:

Hussein Ahmad (Imparsial) 081259668926
Julius Ibrani (PBHI) +62 813-1496-9726
Al Araf (Centra Initiative) +62 813-8169-4847
Usman Hamid (Amnesty International Indonesia) +62 811-812-149
Adnan Topan Husodo (Indonesian Corruption Watch) +62 812-3600-3034
M. Hafiz (HRWG) +62 812-8295-8035