Indonesia unveils $ 125 billion military modernization plan
June 01, 2021
through Jon Grevatt and Andrew MacDonald
A draft settlement from the Indonesian presidential office underscored the need to invest $ 125 billion in military modernization until the mid-2040s. The funding proposal is indicative of Indonesia’s military ambitions and growing concerns about it. regional security.
The draft regulation – titled “Meeting the Defense and Security Equipment Needs of the Ministry of Defense and Indonesian Armed Forces (TNI) 2020-24″ – was released recently but requires various approvals from ministries and the House of representatives before being promulgated. The investment plan also highlights Indonesia’s continued dependence on foreign loans.
Indonesia has declared a funding requirement worth $ 125 billion in military investment through the mid-2040s. The country’s modernization needs are expected to include the Lockheed Martin F-16V fighter jet. (Lockheed Martin)
The proposed regulation details the requirement of an amount of 124.9 billion USD for the financing of the modernization of the TNI over a period of five “strategic plans” of a duration of five years each. The first strategic plan spans 2020-24 and coincides with the final phase of the TNI Minimum Essential Force (MEF) program, while the last will be 2040-2044.
The document proposes financing of $ 79 billion for defense equipment over this 25-year period, $ 32.5 billion for sustainment and the remaining $ 13.4 billion for interest payments on loans. foreigners.
The regulation gives priority to supplying the modernization needs of TNIs from the local industry. However, he declares: “In the event that domestic products cannot be [procured], then foreign products can be used.
When defense equipment is imported, the regulation identifies the requirement to impose “technology transfers and offsets” to support local industry participation in procurement. This industrial strategy also includes the provision of countertrade through which Indonesia seeks to export local products partly for material.
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A draft regulation from the Indonesian presidential office underscored the investment requirement …