{
  "id": 8476625,
  "title": "Hidden fiscal risk behind Indonesia’s military expenditure",
  "url": "https://urgent.news/2026/09/19/hidden-fiscal-risk-behind-indonesias-military-expenditure",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-19T00:59:37.000Z",
  "source": {
    "name": "The Jakarta Post Academia",
    "slug": "the-jakarta-post-academia",
    "url": "https://www.thejakartapost.com/opinion/2026/09/19/hidden-fiscal-risk-behind-indonesias-military-expenditure.html"
  },
  "original_language": "en",
  "account": "Indonesia faces an emerging fiscal challenge as its defense budget surges while budgetary transparency dwindles. For 2026, military spending is projected to more than double from Rp 139.2 trillion in 2024 to Rp 335.3 trillion (US$18.97 billion). This signals a political commitment to modernizing the military, yet the mechanisms for the legislature and public to oversee these funds remain underdeveloped.\n\nDefense is a top priority in the government's 2027 State Budget Draft, but it receives limited discussion in the subsequent legislative debate. A large portion of the 2027 budget, which is expected to be allocated, will flow through the Budget Section of the State General Treasurer, where oversight is minimal.\n\nThe evolution of Indonesia's defense budget has mirrored shifts in political regimes. During post-independence and the Old Order periods, high military spending was justified by threats from Dutch aggression and foreign-backed insurgencies. However, the New Order era reversed this trend, gradually reducing defense's share of the national budget as development priorities shifted.\n\nThe Reform Era brought about two significant changes. First, military expenditure dropped below 1 percent of GDP until 2024, despite a commitment to increase it with the promise of 8 percent economic growth, which was never realized. Second, the reliance on foreign borrowing for arms procurement has accelerated under the current administration, rising from 7 percent of total defense revenue in 2019-2024 to nearly 25 percent in recent years. This reliance on foreign borrowing, essential for arms procurement, bypasses domestic multiplier effects and introduces currency risk to future fiscal capacity.",
  "summary": "Indonesia is entering an era of bigger defense budgets and small budgetary visibility. Yet the institutions that allow the legislature and the public to determine where money goes have not strengthened.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}