Indonesia approves 20% rise in defence budget by 2024

Indonesia's outgoing president has approved a 20% hike in defence spending through the end of next year, to upgrade the country's military hardware in response to geopolitical developments, its finance minister said. In a press conference on Wednesday, Sri Mulyani Indrawati said the approval came in a meeting she attended with President Joko Widodo and Defence Minister Prabowo Subianto.

Indonesia's outgoing president has approved a 20% hike in defence spending through the end of next year, to upgrade the country's military hardware in response to geopolitical developments, its finance minister said.

In a press conference on Wednesday, Sri Mulyani Indrawati said the approval came in a meeting she attended with President Joko Widodo and Defence Minister Prabowo Subianto. Prabowo is the leading candidate in the upcoming presidential election in February, and is running with Widodo's son.

The defence budget will be increased from $20.75 billion to $25 billion, Sri Mulyani said. "The needs were put forward by the defence ministry. They considered them as a necessity given the condition of our military hardware as well as rising threats amid increasing geopolitical and geo-security dynamics," she said.

Despite the "significant" increase, the defence budget for the three five-year periods from 2020 to 2034 will remain at $55 billion, she said, underlining this means the plans were aligned with her medium- to long-term fiscal plans. The source of the funds will be foreign loans, she said.

Prabowo has led a series of military hardware procurements, including 42 Dassault Rafale fighter jets for $8.1 billion, 12 new drones from Turkish Aerospace worth $300 million, and 12 Mirage 2000-5 fighter jets valued at $800 million. The country also had a deal to buy 24 transport helicopters from U.S. weapons maker Lockheed Martin for an undisclosed fee this August.