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Golden Indonesia 2045 Needs Defense Capabilities Built to Last

Writer: ISI Secretariat
ISI Secretariat
18 hours ago
6 min read

By: Priazqani Rampadito


Edited for publication by: Dr. Fauzia G. Cempaka Timur, Senior Analyst ISI


On 18 May 2026, President Prabowo Subianto presided over a ceremony handing six Rafale fighters to the Indonesian military. [1] The handover marked visible progress in strengthening national defense. Its long-term value, however, will depend on whether Indonesia can sustain combat operations with the aircraft. In July, the government projected a full-year budget deficit of Rp734.3 trillion, or 2.85 percent of GDP. [2] Together, these developments make a compelling case for aligning modernization with the resources needed to sustain it.


Turning acquisitions into operational strength means funding complete capabilities: equipment, personnel, infrastructure, munitions, maintenance, and eventual replacement. Indonesia should make additional acquisitions conditional on credible lifecycle funding plans jointly assessed by defense and finance officials. The risk is not ambition itself, but allowing commitments to buy platforms to outpace the recurring resources needed to operate them. Documented maintenance constraints make this a practical concern, though they do not prove a nationwide readiness shortfall in 2026.



The constraint is recurring fiscal capacity

The OECD's 2026 country note places Indonesia's tax-to-GDP ratio at 11.8 percent in 2024, against a 19.7 percent Asia-Pacific average. [3] Its harmonized measure includes compulsory social security contributions, avoiding the mismatched comparisons that come from mixing differently defined tax ratios. The gap points to limited revenue mobilization relative to the economy, although it cannot alone determine what Indonesia can afford to spend on defense.


Nor is the immediate pressure simply a collapse in tax collection. Reuters reported that the July 2026 deficit outlook rose from 2.68 to 2.85 percent of GDP because higher spending, particularly on energy subsidies, outpaced an upward revision to expected overall revenue. [4] That leaves limited room below the 3 percent legal deficit ceiling. Defense did not necessarily cause the widening deficit; rather, competing priorities and external shocks can narrow the room for long-term commitments.


The enacted budget provides a firmer baseline. Annex III of Presidential Regulation No. 118/2025 records an initial 2026 allocation of Rp187.1 trillion for the Ministry of Defense. [5] A July 2026 account from Universitas Muhammadiyah Yogyakarta also identifies this as the initial DIPA allocation covering the ministry and TNI. [6] This is an annual authorization for personnel, goods, and capital spending. It is not just a fund for procurement or proof of past expenses. Affordability depends on including purchase installments and ongoing support in the annual budgets.


Once purchase payments and personnel obligations are committed, a revenue shortfall can squeeze more adjustable activities: training, stock replenishment, and maintenance. Borrowing can spread purchase payments over time, but cannot eliminate operating costs. A weaker rupiah can also raise the domestic cost of foreign-currency payments. Testing these risks early is a way to protect operational units, not to diminish Indonesia’s modernization goals.


Turn contracts into usable capability

The Rafale program demonstrates why acquisition and sustainment should be assessed together. Dassault confirmed in January 2024 that all tranches covering 42 aircraft had entered into force. [7] Its original announcement also specified aircrew training, support for Indonesian air bases, and a training center with two full-mission simulators. [8] Those are important readiness provisions. The next policy challenge is ensuring Indonesia can maintain and renew them across the aircraft’s service life at the operating tempo national defense requires.


Domestic experience shows why that transition matters. Edi Nugraha’s 2022 field study of the Army’s air-defense weapons maintenance depot in Batu found that requested maintenance funding did not consistently materialize, making planned work uncertain. [9] MBDA’s technical assistance for Mistral maintenance ended with the support contract in 2020, leaving repairs to depot technicians. The study described workarounds, including exercise-related funding and supplier support while contracts remained active. This historical case does not describe the entire military in 2026. It does show why each procurement package needs a funded path toward domestic sustainment after supplier support ends.


More recently, an April 2024 Air Force statement acknowledged constraints at Depohar 60 involving resources, infrastructure, software, spare-parts support, and funding. [10] This official account illustrates that maintenance capacity depends on several inputs working together. More equipment alone will not expand that capacity: delivery schedules must align with technicians, facilities, and dependable support budgets.


Turkish Aerospace announced a definitive sales contract for 48 KAAN fighters at IDEF in July 2025. [11] That was a contractual milestone, not evidence of delivery or operational availability. Naval Group announced that its contract for two Scorpène Evolved submarines entered into force on 23 July 2025, with construction at PT PAL and planned training for Indonesian engineers. [12] These projects can strengthen national capability and industrial skills if financing, workforce development, and construction progress move together. Their benefits should be judged against verifiable milestones.


Delivered ships present a more immediate sustainment task. Fincantieri confirms that KRI Brawijaya was delivered in July 2025 and KRI Prabu Siliwangi on 22 December 2025. [13] Delivery puts a platform in Indonesia’s hands; it does not show how many days that vessel can deploy with trained crews, functioning systems, and adequate supplies. Contract signature, entry into force, delivery, and operational readiness should remain distinct measures of progress.


Supplier diversity matters too. Different platforms can require separate training, tools, inventories, and support arrangements, increasing the coordination burden. Yet diversification can also reduce exposure to a single supplier, while local construction can develop useful maintenance skills. The relevant test is whether those benefits justify the additional support costs and whether Indonesian institutions can absorb the work. Counting supplier countries or technology-transfer agreements cannot answer it.


Put readiness at the center

First, the defense and finance ministries should connect each major acquisition's lifecycle estimate to Indonesia's existing medium-term budgeting framework. Defense Minister Regulation No. 19/2025 already provides for rolling three-year forward estimates. [14] The next step should be to link those estimates explicitly to support-package expiry dates, delivery milestones, and projected operating requirements across the portfolio. Acquisition installments should be distinguished from infrastructure, personnel, training, munitions, maintenance, upgrades, and retirement costs. This would expose overlapping demands that separate project assessments can miss.


Second, the plan should stress-test lower revenue, a weaker rupiah, delayed delivery, and higher support costs. Before expanding commitments, officials should identify which missions must remain funded and which new projects could be deferred. Where existing contracts limit flexibility, rescheduling must account for penalties and operational consequences. The aim is to preserve usable capability through fiscal shocks rather than protect acquisition timetables at the expense of readiness.


Third, parliament should receive regular reports linking expenditure to capability milestones. Relevant measures include trained crew availability, maintenance backlogs, platform availability, and progress toward planned flying hours or deployment days. Sensitive details can remain in closed oversight sessions, with aggregate progress published. Industrial cooperation should likewise be assessed through demonstrated repair and maintenance capacity and delivery performance, not technology-transfer announcements alone.


Revenue reform can widen Indonesia's options, but future improvements in tax collection should not be treated as money already available. Modernization must fit a conservative fiscal baseline while preserving the capacity to expand when recurring funding and institutional readiness improve. Golden Indonesia 2045 will require military strength that survives the years between handover ceremonies. The strongest measure of national ambition is therefore the capability Indonesia can reliably finance, maintain, and deploy when the budget comes under pressure.


References

[1] Kementerian Sekretariat Negara RI. “Presiden Prabowo Subianto Serahkan Pesawat MRCA Rafale dan Sistem Pertahanan Modern untuk Perkuat Pertahanan Udara Nasional.” May 2026. https://www.setneg.go.id/baca/index/presiden_prabowo_subianto_serahkan_pesawat_mrca_rafale_dan_sistem_pertahanan_modern_untuk_perkuat_pertahanan_udara_nasional

[2] Sekretariat Kabinet RI. “Finance Minister: 2026 State Budget Continues to Safeguard Growth While Keeping Deficit at 2.85% of GDP.” 2026. https://setkab.go.id/en/finance-minister-2026-state-budget-continues-to-safeguard-growth-while-keeping-deficit-at-2-85-of-gdp/

[4] Reuters. “Indonesia's 2026 Budget Deficit Outlook Seen at 2.85% of GDP, House Panel Says.” July 7, 2026. https://www.reuters.com/world/asia-pacific/indonesias-2026-budget-deficit-outlook-seen-285-gdp-house-panel-says-2026-07-07/

[6] Universitas Muhammadiyah Yogyakarta. “Pemangkasan Anggaran Pertahanan.” July 2026. https://www.umy.ac.id/pemangkasan-anggaran-pertahanan/

[7] Dassault Aviation. “Entry into Force of the Final Tranche of 18 Rafale for Indonesia.” January 8, 2024. https://www.dassault-aviation.com/en/group/press/press-kits/entry-into-force-of-the-final-tranche-of-18-rafale-for-indonesia/

[8] Dassault Aviation. “Indonesia Purchases the Rafale.” Press kit. https://www.dassault-aviation.com/en/group/press/press-kits/indonesia-purchases-the-rafale/

[9] Nugraha, E. (2022). “Peran Depo Pemeliharaan dan Implikasinya terhadap Ketahanan Alutsista Arhanud (Studi di Depo Pemeliharaan Sistem Senjata Arhanud Kota Batu Jawa Timur).” Jurnal Ketahanan Nasional, 28(2), 161–184. https://jurnal.ugm.ac.id/jkn/article/download/77290/34606

[10] TNI Angkatan Udara. “Serah Terima Jabatan Dandepohar 60, Kadisrendalhar, dan Kadisbin.” April 2024. https://tni-au.mil.id/berita/detail/dandepohar-60-serah-terima-jabatan-kadisrendalhar-dan-kadisbin

[11] Turkish Aerospace (TUSAS). “Turkish Aerospace and Indonesia Sign Official Contract for the Sale of 48 KAAN Turkish Fighter in Istanbul.” July 2025. https://www.tusas.com/en/media-center/news/turkish

[12] Naval Group. “Entry into Force of the Scorpène® Evolved Submarines Contract for Indonesia.” July 23, 2025. https://www.naval-group.com/en/entry-force-scorpener-evolved-submarines-contract-indonesia

[13] Fincantieri. “Fincantieri Delivers the PPA ‘KRI Prabu Siliwangi-321’ to the Indonesian Navy.” December 22, 2025. https://www.fincantieri.com/en/newsroom/press-releases/2025/Fincantieri-delivers-the-PPA-Kri-Parbu-Siliwangi-321-to-the-Indonesian-Navy

[14] Kementerian Pertahanan RI. Defense Minister Regulation No. 19/2025 on the Preparation of Work and Budget Plans (RKA). https://www.kemhan.go.id/renhan/wp-content/uploads/2026/02/Permenhan-No-19-Tahun-2025-tentang-Penyusunan-RKA.pdf


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About Authors


Priazqani Rampadito is an academic and researcher specializing in International Relations and Public Policy. A graduate of Universitas Sriwijaya, his research focuses on economic diplomacy, global political dynamics, and Indonesia's strategic policies. In addition to his scholarly contributions, he has a strong professional background as a former Research Associate at the Foreign Policy Community of Indonesia (FPCI) and serves in corporate governance as the Deputy Director of CV Prima Tetra Group. Through his writings, Priazqani is dedicated to providing critical analysis that bridges international relations theory with practical policy realities.



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