Subject: Susilo Approves Additional Military Funding

Also: Indonesia: Missile Deal Indicates China as Top Choice for Modernising Indonesian Army; Indonesia Purchases Dutch Corvette

The Jakarta Post Thursday, May 19, 2005

President Susilo Approves Additional Military Funding

Rendi A. Witular, The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono approved on Wednesday a proposal for an increase in the country's military spending this year despite earlier opposition amid concern over the widening state budget deficit.

Minister of Defense Juwono Sudarsono said the President had agreed to provide an additional Rp 1.7 trillion (US$180 million) for military spending from the current budget allocation of Rp 21.6 trillion.

"An increase in military spending is a must. The military (TNI) needs support from all parties to improve its equipment and arms in order to address future external threats," said Juwono after a limited Cabinet meeting to discuss funding for the defense sector.

Juwono, however, said the final decision would be made during the upcoming state budget revision meeting with the House of Representatives Budget Committee.

The additional funds approved by the President, however, are lower than the initial Rp 5 trillion demanded by the Ministry of Defense, as Minister of Finance Jusuf Anwar had repeatedly rejected the proposal due to limited capacity of the state budget.

Should the new military spending budget be approved by the House, Juwono said it would help cover the cost of repairing and modernizing TNI equipment, which was either not functioning or too old.

"Considering the limited funds in the state budget, I think the allocation is just enough for this year. It is important for us is to improve accountability and transparency in the use of the funds in order to gain maximum results," he said.

Juwono said that the TNI was unlikely to purchase new arms in the next two years, but might start expanding its equipment purchases again in 2007 when the country's economy was stronger.

Next year, Indonesia is expected to increase its military spending by Rp 24 trillion.

Indonesia, Southeast Asia's largest economy, needs a strong military force not only to address threats at home, such as separatist movements, but also to protect its borders.

The defense budget of the world's fourth most populous country is considered very low, even compared to smaller neighboring countries, such as Thailand and Malaysia.

The TNI's military equipment has been steadily deteriorating as a result of the 13-year arms embargo imposed by the United States, due to gross human rights violations in East Timor.

The condition was exacerbated further by the Asian financial crisis in late 1997 which ravaged the Indonesian economy.



Jakarta, 18 May (AKI) - The Indonesian government has announced it will collaborate with China in a programme of production of short, medium and long-range missiles. The project, announced by the Indonesian minister of Research and Technology - Kusmayanto Kadiman. In recent statements, the defence minister, Juwono Sudarsono, has said the modernisation of the Indonesian army (TNI) is essential, and described China as the "ideal" partner. The Indonesian army is the largest in south east Asia, with 400,000 soldiers in active service.

"We are a maritime country, and the defence of our country must begin from here. The long distance missiles could be stationed on small islands or on ships," Kadiman was quoted as saying by the Antara national news agency.

The government has allocated six percent of the national budget to the modernisation of the army for the year 2005. Years of under-investment and an arms embargo imposed by Washington since 1999 - following the East Timor massacres - have contributed to the current under-developed state of the army.

Sudarsono has requested an immediate additional investment of at least 538 billion dollars, and Indonesian president, Susilo Bambang Yudhoyono, seems to agree, at least in principle, to a huge boost in funding. During a seminar in January, Susilo said the ideal defence budget would be "between three and five percent of GDP". The 2005 Indonesian defence allocation represents only one percent of GDP - whereas neighbouring Malaysia and Thailand invest at least two percent annually in defence.

In late April, Susilo signed a "strategic accord" with Chinese president Hu Jintao, which laid the base for a preferential arms deal between Beijing and Jakarta.

Susilo has explained that in addition to guaranteeing national integrity and the defence of the national territory, the modernisation of the military will prove essential to face emergency situations - like the aftermath of the December tsunami in the North Sumatra province of Aceh - and in the fight against illegal logging.

The TNI has come under constant accusations from the international community and human rights groups for abuses of human rights, particularly in areas characterised by separatist movements - Aceh and Papua. In February, Washington officially announced it had re-admitted Indonesia to its training programme for foreign military forces. The step was seen as the first towards restoration of military ties between the US and Indonesia, and Washington had said the training would provide opportunities for reforms within the TNI.

However, Indonesia still faces a US embargo which prevents it from benefitting from the US foreign military financing (FMF) scheme. This embargo was imposed following another massacre by the TNI and pro-Jakarta militia after the people of East Timor voted for independence in 1999.

Tensions with neighbouring Malaysia remain high over oil-rich Amblatt region, which both countries claim as their own. In a recent interview with Adnkronos International (AKI) Australian analyst Rob Goodfellow, had said that the TNI would not be capable of facing a war against Malaysia.



Indonesia Purchases Dutch Corvette

Friday, 20 May, 2005 | 23:28 WIB

TEMPO Interactive, Jakarta:The Indonesian government has decided to purchase a Sigma corvette from the Netherlands.

The purchase was discussed by Indonesian defense minister Juwono Sudarsono and Dutch defense minister Henricus Gregorius Joseph on Wednesday (18/05).

"This is a modern corvette and will be fully equipped with weapons," said Maj. Gen. Pieter Wattimena, Director General for defense facilities at the Indonesian Ministry of defense.

According to Wattimena, the Netherlands was chosen as it has international standard ship companies and has long been a partner of the Indonesian Ministry of Defense. (Sunariah-Tempo News Room)

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