DTN News: Indonesia Government To Raise Defense Budget By 20 Percent

DTN News: Indonesia Government To Raise Defense Budget By 20 Percent *Source: DTN News / Int'l Media

(NSI News Source Info) JAKARTA, Indonesia - July 11, 2009: The government is planning to increase its defense budget by 20 percent next year to Rp 40.6 trillion (approximately US$4 billion), part of which will be used to replace the country’s aging weaponry.

Indonesian President Susilo Bambang Yudhoyono rides a new armored vehicle produced by the state owned firm PT. Pindat in Bandung during the handover ceremony of 40 military armored vehicles to the Defense Ministry on July 10, 2009. Indonesia will increase its defence budget by 20 percent next year to compensate for years of low spending, Yudhoyono said following the July 8 elections.

President Susilo Bambang Yudhoyono said in Bandung on Friday that the government would propose to the House of Representatives an increase of Rp 7 trillion (approximately US$700 million) in the country's defense budget for the 2010 fiscal year 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 hand-over ceremony of 40 armored personal carriers (APCs) from state weaponry manufacturer PT Pindad to the Indonesian Army.

"We will then systematically head toward what we call the minimum essential force, which is equal to between Rp 100 trillion and Rp 120 trillion." The increasing defense budget, Yudhoyono said, will be made in accordance with the country’s economic growth particularly post the global economic crisis.

"This year we predict that our economy will expand by between 4 and 4.5 percent. And with our state budget having exceeded Rp 1,000 trillion, we can raise our defense budget so that there will not be such a wide gap between the allocated budget and the minimum essential force," he said.

Yudhoyono said the government had been unable to allocate a proper amount to the defense budget because it had struggled to revive the country's economy and people's prosperity since the 1997 Asian crisis.