QUOTE(Mai189 @ Dec 6 2023, 02:20 PM)
Indonesian military defence plans are in a mess.
Uncomfortable truths:
https://www.rsis.edu.sg/rsis-publication/id...ary-priorities/Several points 2 note
1) it wont achieve its 2024 Minimum Essential Force targets
2)
Its 2024 defence budget is about 135 trillion rupiah or about USD 8.6 billion.https://fulcrum.sg/the-significance-of-pres...budget-address/3) Its 4 or 5 year military acquisition budget (2020 to 2024) is largely vapourware (recently increased from usd $20 billion to usd $25 billion) as it mostly does not exist. They are loans to be made from other countries and financial institutions. Even the IMF does not dish out such loans. And suitable loans are often hard to come by. Looks like political fanfare to me.
4) Indonesia has a strange policy of signing so called contracts (which are effectively letters of intent in Msian local context) and then source for funding i.e. loans which may not be successfully obtained. This has led to many stalled acquisitions e.g. kf21, f15ex, fremm, etc. Many of these lois have deadlines for payment at the agreed price or they lapse. We do not know how many more announced acquisitions are impacted.
5) News on military acquisitions have been hijacked by politicians i.e. good photos and sound bites. But the contract are not executed.
6) The nascent defence industry lacks sophistication required to push to the next level. There are problems with its UAV e.g. Elang hitam Uav, unbalanced ships by pt pal, critical problems with its locally assembled korean submarines, inability to integrate foreign systems on its merah-puteh arrowhead 140 frigate, inability to complete F16 upgrades, etc.
7) Indonesia is under pressure from the amount of interests she needs to pay for her current loans esp. loans for military purchases. This last point is important as it is a vicious cycle of ever increasing interest payments as you loan more. Can you imagine if another financial crisis hits?
Lastly, I share the Indos procurement process and the bewilderment or confusion it causes to defence industry watchers when claimed announcements (usually with huge fanfare and photo ops) to buy military equipment end up not purchased.
It goes like this:
(1) Starts with MOU (2) LOI (3) Real Contract and then (4) effective contract.The Indos will start to look for loans at (4) and so far it has not been easy and successful.
There may not be real money to make any payment at (1), (2) and (3) and usually these agreements (the press sometimes call them contracts nonetheless) expire or get stalled. Examples are the F15ID ( in spite of what some indo forumner thinks, I checked and found that export controls apply (the FMS still needs internal US approval for specific systems (by the way, Israel is getting F15EX (you think anyone else will get the same level of tech) - likely this will be similar to the F15SG or F15QA), FREMM, KF 21, etc.
The only large scale defence item that managed to get loans and reached effective contract status is the Rafale for batches 1 and 2.
So, it is important to keep the above process in mind when Indo makes annoucements that they are buying something - most of the time if not all the time, they are wishes (and may not end up in an actual purchase).
This post has been edited by Mai189: Dec 9 2023, 09:42 PM