Balancing the defense budget

Balancing the defense budget

Imanuddin Razak, Staff Writer, The Jakarta Post, Jakarta

The government, through the Ministry of Defense, launched on
March 31 a white paper on defense strategy.

To some, the publication of the paper was welcome, an
indication of transparency on the part of the defense ministry
and the Indonesian Military (TNI).

Still, the paper has received strong criticism, as it calls
for the importance of restoring the military's territorial
function.

The function, which includes Army bases and posts at all
administrative levels down to that of the village, has been
blamed for TNI's dominating political role and abuses during the
leadership of then president Soeharto.

However, while most of the paper's content sets out the
military's defense strategies and policies, the last section,
Chapter Six, calls for an increase in the annual defense budget,
from below 1 percent of gross domestic product (GDP) to around 2
percent of GDP within the next two or three years.

In the long term -- 10 years to 15 years from now -- the
ministry is seeking a defense budget of 3.86 percent of GDP.

The government slightly increased the TNI budget to Rp 13.9
trillion (US$1.5 billion) this year. Last year, it received Rp 11
trillion.

The paper indeed contains a contradictory statement, as it
says that within the next 10 years to 15 years Indonesia will not
face serious threats from other countries in the form of invasion
or military attack; but that it will face a variety of domestic
threats, including radical movements, communal conflicts,
terrorism and separatist movements.

A contradicting reality was when TNI chief Gen. Endriartono
Sutarto said last Wednesday that it was now in the process of
purchasing 48 Russian jet fighters, including Sukhoi-27s and
Sukhoi-30s, over the next four years.

The question is whether the country needs that number of
modern jet fighters, given that the defense ministry said that
there would be no serious threats from other countries in the
next 15 years. Modern jet fighters are needed to cope with
outside threats, not domestic radical and separatist movements,
terrorism or communal conflicts.

Also, the purchase of Sukhoi fighters is considerably
controversial: A Sukhoi fighter, fully equipped with arms and
combat technology, is worth around $100 million. Regardless of
how it will be paid for, if Indonesia purchases 48 Sukhois, it
will have to pay $4.8 billion, or triple this year's defense
budget.

It is indeed true that TNI needs to upgrade its Navy and Air
Force fleets and its Army's equipment.

But TNI should not hastily ask for more money, especially when
the country has yet to recover from the economic crisis.

TNI should spare a thought for its fellow citizens, such as
those working in the informal sector, like vendors, who have
worked hard to survive economic hardship. Scores of laid-off
workers have also tried to run their own business.

Business-wise, management pundits always advise that in the
event of an organization's financial problems, it must
immediately look for new sources of income to finance its
operational activities.

Military analysts have estimated that the government's
budgetary allocation to TNI accounts for only 30 percent to 35
percent of its actual expenditure. The remaining 65 percent to 70
percent is raised by "off-budget" businesses, including
foundations and other "less legal" operations, they said.

It has widely been suggested that TNI's business foundations
and units should be put under a holding company, to be managed
and audited by the government, which could then return some 75
percent of its profits back to TNI for soldiers' welfare.

It should also be made clear whether the money that results
from its business units and foundations really goes into TNI's
coffers for use on the welfare of its troops -- or if it has
merely lined the pockets of its individual leaders.

And if all these other sources of income still cannot cover
its expenditure, any adviser would surely refer to the basic
principle of business prudence -- that spending should not be
greater than revenue.

The paper reveals in Chapter Six that the defense budget has
largely been used to cover routine spending -- troop salaries,
purchase of goods, maintenance and official trips of its officers
-- rather than developing the state's defense system.

For example, 2002 saw budget spending amounting to Rp 2.8
trillion and routine spending of Rp 9.8 trillion.

To cut spending, the TNI could consider reducing the purchase
of unnecessary goods and minimizing officers' trips, particularly
overseas ones.

Perhaps, the TNI should adopt the words of late U.S. president
John Fitzgerald Kennedy: "Don't ask what your country can do for
you, but what you can do for your country."