Defense & Security Analysis

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Assessing military reform in Indonesia

Leonard C. Sebastian & Iis Gindarsah

To cite this article: Leonard C. Sebastian & Iis Gindarsah (2013) Assessing military reform in
Indonesia, Defense & Security Analysis, 29:4, 293-307, DOI: 10.1080/14751798.2013.842709

To link to this article: https://doi.org/10.1080/14751798.2013.842709

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Defense & Security Analysis, 2013
Vol. 29, No. 4, 293–307, http://dx.doi.org/10.1080/14751798.2013.842709

Assessing military reform in Indonesia

Leonard C. Sebastiana* and Iis Gindarsahb
a
S. Rajaratnam School of International Studies, Nanyang Technological University, Block S4, Level B4,
Nanyang Avenue, Singapore 639798, Republic of Singapore; bCentre for International and Strategic
Studies, Jl. Tanah Abang III No. 23–27, Jakarta 10160, Republic of Indonesia

This article seeks to assess the magnitude of military reform in Indonesia and its impact in
establishing greater levels of professionalism within the armed forces. To this end, the
authors will offer some reflections on the studies of civil-military relations and military
transformation for inculcating a higher degree of military professionalism; analyse to what
extent the process of military reform in Indonesia has reshaped the institutional role of the
armed forces; and discern three major strategic gaps in Indonesia’s military reform, namely
the “legal loopholes and regulation vacuum,” the “shortcomings of democratic civilian
control,” and the “defence-economic gap.” This article asserts that military professionalism
will grow more substantially depending on the ability of civilian elites to exercise effective
control over the military and the capacity of the government to transform the military
establishment keeping pace with strategic challenges and operational requirements.
Keywords: Indonesian military; military professionalism; civil-military relations; military
reform; democratic civilian control

Introduction
After the fall of the authoritarian regime in 1998, the process of military reform in Indonesia had
primarily produced new legal frameworks and institutional changes in the defence and military
realm. Having abolished the “dual-function” (dwi-fungsi) doctrine that legitimated military
engagement in socio-political affairs, the Indonesia’s National Defence Forces (TNI) leadership
has placed more emphasis on transforming its institutional profile and improving its human
rights record. The Indonesian military may no longer be the leading actor in national politics,
but has pragmatically incorporated a strategy enabling it to play a “behind the scenes” role.1
Some scholars, however, argue that the military reform in Indonesia has come to a standstill
despite notable institutional changes in civil-military relations.2 Further reform efforts to place the
TNI completely under the authority of a civilian-led Ministry of Defence remain difficult. Indonesia
will need more time to implement difficult changes in these areas due to the tentative nature of civil-
military relations in the country and limited resources in the defence realm. The mindset of the officer
corps also has not changed substantially.3 There remains a deep contempt for civilian rule and a belief
that only the TNI is capable of rising above the petty rivalries behaviour of civilian politicians.4
With this backdrop, this article argues that the level of military professionalism will grow
depending on the ability of civilian elites to exercise their effective control over the military,
and the capacity of the government to surge adequate resources for defence purposes. In that

*Corresponding author. Email: ISLCsebastian@ntu.edu.sg

© 2013 Taylor & Francis

294 L.C. Sebastian and I. Gindarsah

regard, this article aims to provide an assessment of the military reform processes in Indonesia.
First, it will examine the theories relating to civil-military relations and military transformation
with their implications for deepening military professionalism. Second, the article will analyse
to what extent the process of military reform in Indonesia has reshaped the role and missions
of the armed forces. Third, it will highlight major strategic gaps in that process.

Capturing elements for greater military professionalism

Military professionalism is a function of civil-military relations and qualitative elements within
military establishments. The objectives of military reform are the establishment of effective civi-
lian control over the military, while enabling the military establishment to meet strategic chal-
lenges and operational requirements. On the former objective, the agenda of military reform is
associated to democratic-political reform requiring subordination of the military organisation to
the elected-civilian political leadership. In that respect, the concept of civilian control is deliber-
ately ordered to insure the professional competency of the military and limit its engagement to
areas within the realm of military expertise. To this end, civilian authority has to clearly define
the institutional role of the military, formulate military doctrine according to national strategic
goals, determine reasonable objectives for military operations, maintain professional self-
esteem within the military establishment, and develop institutional measures for the exercise of
democratic-political control over the armed forces.5
In that sense, there are two methods for exercising civilian control – subjective and objective –
that differ on the basis of the distribution of power among civilian and military institutions. Under
subjective control, civilians try to control the military at all levels and make it an integral part of the
group seeking to dominate state power, including active participation in government. In contrast,
objective civilian control provides the military with greater institutional autonomy in the technical
realm in return for complete political subordination.6 In practice, civilian control is likely to feature
the elements of both methods despite the predomination of one in an individual country.7 Without
effective civilian control, military professionalism remains fragile and subject to potential reversal
by non-democratic forces trying to lure the military to intervene in the political sphere.8
Besides the vitality of civilian control, military professionalism is a consequential outcome of
qualitative elements embraced within the military establishment. Given the uncertainty of inter-
national relations, a military organisation should be able to adapt itself to emerging opportunities
and challenges within its strategic environment. Military historians have noted that the inability of
militaries to adapt can lead to catastrophes threatening state survival. Hence, the key to maintain-
ing the military’s effectiveness is its ability to innovate and keep pace with revolutionary changes
in technological conditions and strategic contexts.9
There is a complex list of variables necessary for military innovation to occur, namely a new
vision of warfare;10 organisational culture supportive of change;11 the presence of innovative offi-
cers or mavericks;12 available career pathways for innovative officers;13 inter- and intra-services
rivalries;14 a mature defence policy community sharing innovative ideas;15 systemic pressures of
rising military effectiveness;16 the shifts in enemies’ strategy and posture;17 a fertile set of
enabling technologies;18 the management of defence resources;19 a dependable defence industrial
base supporting military establishment;20 political intervention from top officials;21 and the
strength of state–society relations.22
Rebuilding a professional military organisation under conditions of a democratic transition
demands a sequenced process of “civil-military reform” and “military transformation.” The
former should contribute to the application of effective civilian control and military disengage-
ment from socio-political affairs. While the latter process relating to defence and military trans-
formation is required to enhance professional climates within the armed forces it should allow it to
 Defense & Security Analysis 295

embark upon institutional innovation and adapt to emerging technological conditions and stra-
tegic challenges.23 Arguably, innovations in military affairs should eventually lead to the cessa-
tion or downgrading of the military’s traditional missions (including its involvement in the
political realm), and have a definitive impact on the military’s overall effectiveness to execute
tasks assigned by civilian authority.24
The best option for countries with on-going processes of democratic consolidation is to ensure
that the exercise of civilian control over the military is supported by a government willing to
provide adequate national resources to cover defence and military requirements. Without provid-
ing sufficient inducements to wean the military from its political interests and autonomous finan-
cial prerogatives, it will be virtually impossible for any democratically elected-civilian
government to effectively decide on national defence priorities and, more importantly, to raise
professional standards within the military establishment.
Indonesia’s experience of military reform over the last decade may have resulted in notable
legal and institutional improvements in civil-military relations; however, the authors argue that
substantial issues relating to military transformation remain untouched. Though civilian elites
and military officers aspire to achieve higher degrees of military professionalism, little progress
has been made in terms of doctrinal innovation, orders of battle or force structure development,
overhauling military education and training, defence resource management, and the development
of an indigenous defence industrial base. Without substantially moving to the next level of the
military reform, namely the military transformation phase, the reform agenda remains unfinished.
As a consequence, the development of the Indonesian-armed forces remains stunted; unable to
acquire a high degree of military effectiveness; and continues to remain entrenched in areas
beyond the scope of their military expertise.

Post-authoritarian military reform in Indonesia

The collapse of an authoritarian regime has raised unprecedented questions concerning the socio-
political role of the Indonesian-armed forces. Following detailed press reports about the military’s
past atrocities,25 civilian elites, intellectuals, and human rights activists called for the termination
of the military’s dual-function and the promotion of democratic civilian control over the military.
Concerned over public antagonism and changing domestic political circumstances, the military
headquarters devised its “New Paradigm” as guiding principles for military reform in the post-
authoritarian era. The concept consisted of four key points, namely the military’s disengagement
from the forefront of national politics; that the military would not seek to occupy political pos-
itions, but influence the decision-making process; the exertion of its influence indirectly rather
than directly; and the military would work in partnership with other national entities.26
Soon thereafter, the military leadership carried out incremental measures of internal reforms,
such as separation of the national police from the military’s chain of command; liquidation of
social-political compartments within the military structure; withdrawal of military representatives
from legislature bodies; restrictions on officers to occupy positions in non-military bureaucracy;
and changing patterns of relations between TNI Headquarters and the retired military and police
officers’ organisation. Given the constant pressure for more substantial changes, the military
leaders then stepped up the TNI’s internal reforms.27 In an official document titled The Role of
TNI in the 21st Century, the military asserted its commitment for military professionalism by
developing a joint warfare doctrine and upgrading its organisational effectiveness.28 To date,
TNI Headquarters has instituted many crucial changes, among which are: the exclusion of
socio-political courses and insertion of humanitarian law in the military curriculum; transferring
the military tribunal from TNI Headquarters to the Supreme Court; and a new requirement for an
active officer to retire before being nominated to stand in elections.
296 L.C. Sebastian and I. Gindarsah

To institutionalise democratic civilian control and military professionalism, the Indonesian

government has enacted two key laws on national defence. First, Law No. 2/2002 on State
Defence regulates the role and authority of the Ministry of Defence in defence policy-making,
as well as its institutional relationship with TNI Headquarters and other government institutions;
authorisation on the use of military force; management of defence resources; and parliamentary
oversight. Second, Law No. 34/2004 on TNI demarcates the role of the TNI to uphold state sover-
eignty, maintain territorial integrity, and protect national entities against armed threats both
internal and external. It also regulates the organisational structure and authority of TNI’s high-
command; authorisation on the use of force; and soldier’s rights and responsibilities. In a nutshell,
these laws ban the TNI’s involvement in political and economic activities.
Furthermore, to strengthen professional military culture, the TNI leadership has made notable
changes to its military doctrines. Along with the revision of army, navy, and air forces doctrines,
the TNI Headquarters amended its principal doctrine – known as “Tri Dharma Eka Karma” in
2007. The new doctrine is significant for two reasons: first, it obliges the TNI to work towards
force projection strategies with “deterrence” and “denial” capabilities and, second, abandoning
militia training, law enforcement, and the maintenance of public order missions.29 In 2008, the
Ministry of Defence issued a Defence Doctrine document defining the concept of “total
defence” as the total participation of national entities and resources in state defence.30
For all notable changes above, top officials at the Ministry of Defence and TNI Headquarters
have reshaped their institutions in line with the evolving nature of democratic statecraft. Civilian
defence ministers have made their mark in reforming the Ministry of Defence. Juwono Sudar-
sono, who served under President Wahid and in President Yudhoyono’s first term of office,
became well known for the promotion of “minimum essential forces” concept to develop the
TNI’s force structure. His successor, Purnomo Yusgiantoro is committed to devoting his attention
to resuscitating indigenous defence industrial capacity.
Meanwhile, the TNI leadership has also managed to reinstitute professionalism within the
military establishment. The current commander-in-chief, Admiral Agus Suhartono, for instance,
is keen to modernise TNI’s weapons systems that are essential to upgrade military capabilities and
boost technical skills thereby deepening a culture of military professionalism. Acknowledging the
problem of a slim budget and bloated manpower pool, he called for personnel “rightsizing” at
every command to determine the effective operational costs for each military unit.31
As part of national commitment to rebuild a professional-armed force, the process of military
reform saw the evolution of an epistemic “defence policy community,” whereby civilian intellec-
tuals could engage in discussions with defence policy-makers and parliament members on various
defence and security issues. Since late 2000, many Indonesian scholars associated with the Pro-
Patria Institute, a small think tank concerned with security sector reform, played a substantial role
through “focus group discussions” to support officials in Ministry of Defence responsible for pre-
paring draft bills on national defence. Later, Pacivis, a research centre at the University of Indo-
nesia in tandem with other centres also participated in policy-research activities. In 2009, the
Indonesian government established the Indonesian Defence University, where civilians and the
military will interact and debate the key issues of defence policy-making. Through frequent
engagement with the academic community, government officials and military officers were
able to absorb new policy-relevant ideas and strengthen their intellectual capabilities.

Major strategic gaps in Indonesia’s military reform

The process of military reform in Indonesia is not without its challenges. Like other developing
countries, the “security problematic” of Indonesia is derived from how to take necessary measures
to establish institutional-state building, while mobilising adequate resources for national
 Defense & Security Analysis 297

defence.32 Consequently, at a time when the principles of good governance should have been
institutionalised in defence realm, the Indonesian government is still grappling with the problems
of establishing proper regulatory frameworks, while coping with the challenge to upgrade its mili-
tary capabilities.
In this context, there are three major strategic gaps which were left unaltered since military
reform was initiated in Indonesia: first, loopholes and regulation vacuum pertaining to the
legal framework on national defence; second, the prevalence of shortcomings of democratic civi-
lian control; and third, the critical gap between the TNI’s institutional role and its overall capa-
bilities, reflected in a defence-economic gap.

Gap 1: legal loopholes and regulation vacuum

There are two key categories of legal issues that need to be addressed to establish a proper regu-
latory framework for Indonesia’s defence establishment. The first relates to loopholes in the exist-
ing laws. Concerning parliamentary oversight, both Law No. 3/2002 and Law No. 34/2004 have
laid down the role of Indonesian parliament to approve or reject defence budget proposals.33 Yet,
there are no clear regulations regarding the nature and the level of access to relevant information
that could be obtained by parliament members and the consequences if such requests are denied
by the Ministry of Defence and TNI Headquarters.
Moreover, although the existing laws empower the president with the authority to make
decisions on the use of force under the auspices of the Indonesian parliament,34 they stipulate
no obligation for the president to determine the strategic objectives, time limits of military oper-
ations, and the rules of engagement. Without these requirements, there are no parameters for the
parliament to approve the president’s decisions and oversee the implementation of a military
operation.35
Confusion likely arises over the question of the circumstances under which civilian leadership
decides to employ military force for contingency missions. The law on the TNI regulates that in
the event of an emergency situation, the president has the authority to deploy immediately mili-
tary forces with an obligation to report such a decision within 48 hours to the parliament.36 Under
no circumstances can the TNI commander-in-chief deploy a task force without authorisation from
the president.37 Yet, the potential to destabilise future civil-military relations remains owing to
difficulties on the part of civilian leadership to immediately issue political decisions to TNI
high-command.
The existing laws also vaguely define the institutional relationship between the Ministry of
Defence and TNI Headquarters. TNI is placed under authority of the president with respect to
the use of force, but coordinated by the Ministry of Defence in terms of defence policy-
making and administrative matters.38 Although the law emphasises that in the future, TNI Head-
quarters will be completely placed under jurisdiction of the Ministry of Defence,39 no definitive
time frame exists for such a decision to take place. Without such arrangement, it is difficult for the
Ministry of Defence to liberate itself from the traditional military domination and exercise
effective civilian control that would ever be the foundation of military professionalism in the
country.
The second category of problems is the vacuum of regulations pertaining to certain key issues.
Military professionalism demands that officers and soldiers be equal before the law and obey the
rule of law. The spirit of this norm is well-reflected in Law No. 34/2004 emphasising that “sol-
diers are subject to the authority of a military tribunal in the event of military criminal law viola-
tions and subject to public judicial power when in violation of public criminal law.”40 This
provision will be valid only after a new law on military justice is enacted. At the time of
writing, the legislators have yet to resume discussing the new Military Tribunal Bill. The
298 L.C. Sebastian and I. Gindarsah

immediate enactment of the bill is imperative not only to remove the TNI’s image of “impunity,”
but also to build a professional ethos within the military.
Regulation vacuums are also evident in a number of provisions relating to Law No. 3/2002
requiring additional regulations or other laws without a definite timeline to have them completed.
Articles 8 and 9 of the Law, respectively, stipulate the enactment of the Reserve and Supporting
Defence Component Bills and the Military Conscript Bill. Despite the inclusion of these bills in
the current list of National Legislation Programme, there is still ambiguity whether they will be
enacted within the legislative period of 2009–2014. The speed of implementation is hampered by
three factors: first, the legislative and constituency commitments of parliament members; second,
their lack of adequate expertise on defence matters; and third, limited public pressure to sustain
the momentum of reform. Eight years since Law No. 3/2002 was passed, none of these regulations
have been implemented.

Gap 2: the shortcomings of democratic civilian control

Glaring loopholes within the existing regulation frameworks are not the only outstanding issue
that may undermine military professionalism in Indonesia. The mindsets for civilian control
are still not deeply rooted in Indonesia’s democratic institutions, especially the parliament. The
foremost obstacle in this regard is the apathy, unwillingness to develop expertise on defence
matters, and the hesitation of many parliament members to carry out their constitutional
responsibilities.41
Such a mindset is apparent in many cases, including their reluctance to participate in public
discussions on defence and military issues coupled with a presumption that military expertise is
the precondition to participate in defence policy-making. Hence, the majority of legislators tend to
concentrate exclusively on matters relating to political accountability rather than scrutinise topics
or issues on how to harmonise defence policy and strategic planning with defence programming.
In any fit and proper test for candidates for the TNI’s commander-in-chief position, for example,
the questions posed by the legislators generally focus on personal matters, without inquiries made
on the candidate’s military credentials and vision to reorganise the TNI’s force structure.
Moreover, the Indonesian parliament, particularly Commission I overseeing national defence
solely lacks institutional capacity. The lack of institutional capacity of the Indonesian parliament
is not confined to a shortage of qualified parliamentary staffers, but is hampered considerably by
the limited expertise of the legislators along with their staff to comprehend the complexities of
technical–operational requirements and financial management issues in national defence. The
lack of expertise is apparent in the legislation process for several bills on national defence and
debates over the annual defence budget. This problem has substantially undermined the effective-
ness of parliamentary oversight.
Party politics may also distract parliament members from substantial issues related to military
reform. Under the current political system, parliament members are grouped under their respect-
ive “party caucuses” (Fraksi). Each political party may issue directives on how their respective
legislators should respond to certain issues or government policies. Outspoken legislators may
be reprimanded or even “recalled” requiring them to step down from their parliamentary positions
if they adopt a stance contradicting their respective party’s directives.42
Consequently, legislators may find themselves in an awkward position, being forced to act
according to their party’s directives which may go against their obligation to exercise proper par-
liamentary oversight. A disturbing trend, however, is the willingness of legislators to constantly
hide behind such excuses in order not to exercise oversight responsibilities over a variety of
defence issues. Financial deviations reported by the State Audit Agency (BPK), for instance,
are never properly examined by legislators, and no recommendations are made to law
 Defense & Security Analysis 299

enforcement agencies to prevent a situation of “moral hazard” arising in the management of

defence spending.
Redefining the role of TNI and transforming its capabilities within a democratic environment
still remains a work in progress. Democratic civilian control should be substantially reflected in
the institutional capacity of the democratic institutions. In this regard, the presence of a mature
defence policy community with sophisticated know-how will be crucial to assisting both civilian
policy-makers and legislators to formulate relevant policies leading to defence and military trans-
formation in Indonesia.

Gap 3: defence-economic gap

Despite the problems related to the legal framework and civilian control, the TNI leadership is
definitely committed to fulfilling its institutional role and main duties to safeguard Indonesia’s
sovereignty and territorial integrity. What becomes the problem in the operational realm are
the TNI’s current capabilities to carry out military operations. Both scholars and military officers
are in general agreement that the TNI’s force structure is far below the “minimum essential force”
requirements necessary to “defend state sovereignty and maintain territorial integrity,” especially
in its Exclusive Economic Zones and Indonesia’s Archipelagic Sea-Lanes. Defence procurement
since military reform was initiated, in fact, did not significantly boost the TNI’s capabilities
against military aggression and territorial intrusion.
The current TNI force structure still depends primarily on the army’s central and territorial
commands comprising 233,000 soldiers.43 In fact, the deployment of 60 infantry battalions
into 12 Regional Military Commands (Kodam) does not necessarily equate to operational effec-
tiveness since majority of these battalions are not well-armed and trained and lack mobility.
Meanwhile, the situation for the army’s central command, which consists of Strategic Reserve
Command (Kostrad) and Special Forces Command (Kopassus), is marginally better though
these units also suffer from similar problems, specifically, the lack of strategic airlift capabilities
that inherently compromises their ability for immediate deployment in the event of contingencies.
The development of military capabilities depends on state capacity to surge national resources
into the defence realm. Although the Indonesian government has significantly increased the size
of the defence budget from 2000 to 2010, Indonesia continuously suffers from “defence-econ-
omic gap” between the actual defence budget and budget proposals submitted by the Ministry
of Defence to Indonesian parliament (Figure 1). In 2010, for instance, the Ministry of Defence
submitted a budget proposal amounting to US$14.9 billion, but the approved budget was only
US$4.47 billion.
Former Minister of Defence, Juwono Sudarsono had commented that the approved budget
could only meet about 30% of total defence requirements.44 This raises a further question
whether defence spending is rationalised in accordance to the available approved budget, or if
actual defence expenditures are financed from off-budget funding, including military businesses.
What is certain, however, is that the defence-economic gap not only undermines TNI’s oper-
ational effectiveness, but also widens the “strategic imbalance” between Indonesia and its
regional neighbours. Compared to major states in the region, Indonesia’s defence budget is far
below China, Japan, South Korea, and Australia. Even Singapore spent US$8.23 billion for its
national defence in 2009 (Figure 2).
Inadequate defence resources, in turn, had diluted TNI’s operational effectiveness, particu-
larly the readiness levels of its weapon systems. In 2007, for instance, the average readiness of
TNI’s armaments was measured at levels of approximately 30–80% (Figure 3). Given the
limited budget, the Ministry of Defence has prioritised an arms maintenance programme encom-
passing three focal points: first, extending the operational period for existing armaments; second,
300 L.C. Sebastian and I. Gindarsah

Figure 1. Indonesia’s defence-economic gap, 2003–2010.

Source: Authors’ data set compiled from a number of academic publications and official documents.

refurbishing military platforms that remain essential for routine missions; and third, acquisition of
communication equipments for command and control purpose.45
Maintaining the operational readiness of the current weapon systems becomes more com-
plicated due to the variety of weapon systems within the TNI’s arsenal. Currently, there are
173 variants of weapon systems supplied by 17 different countries (Figure 4). The multi-var-
iants of weapon systems not only complicate operational procedures for each weapon system

Figure 2. Comparison of defence budget in east Asia and Australasia.

Source: Data compiled from International Institute of Strategic Studies, The Military Balance 2010 (London:
Routledge, 2010).
 Defense & Security Analysis 301

Figure 3. The readiness level of TNI’s Armaments in 2009.

Source: Authors’ data set compiled from an official document.

Figure 4. The number of weapon types and supplier countries of TNI’s Armaments.
Source: Data adapted from Andi Widjajanto and Makmur Keliat, Indonesia’s Defence Economy Reform
(Jakarta: INFID and Pacivis-UI, 2006), 21.

and undermine interoperability within the military, but also increase arms maintenance costs,
particularly in the case of ageing armaments. Unsurprisingly, with limited defence budget,
many TNI armaments are not regularly maintained and thus lack operational readiness and
reliability.
302 L.C. Sebastian and I. Gindarsah

Acute dependence on foreign weapon suppliers has made Indonesia highly vulnerable to arms
embargoes. Figure 4 indicates that 77 military platforms (44%) of TNI’s weapon systems are sup-
plied by North Atlantic Treaty Organisation countries, while indigenous defence industries have
only a minor contribution providing nine platforms (5%). Moreover, overt dependence on foreign
suppliers is not merely confined to weapon systems, but also affects munitions supplies. PT.
PINDAD, for instance, may have been the main supplier of small-calibre ammunitions, but has
never supplied TNI with artillery shells or cannon projectiles.46 This fact highlights the limited
capacity of indigenous defence industries to manufacture large-scale ordnance.
Budget constraints also have undermined the Ministry of Defence’s ability to implement force
modernisation programmes, which is patently evident in the nature of defence spending. Figure 5
shows that in the period of 2002–2007, the annual defence budget provided only a small fraction
to cover the ministry’s spending to procure sophisticated weapon systems to boost the TNI’s mili-
tary capabilities. Much of the annual defence budget expended during that period constitutes per-
sonnel costs and salaries (44%), functional expenditure (22%), including maintenance of
armaments and military facilities, military education and training, and research and development;
while the proportion of defence procurements only amounted to 34% of total defence spending.
Both the Indonesian Parliament and the Ministry of Defence have a common understanding
on the need to address the issue of welfare by increasing soldiers’ salaries and renovating military
facilities not merely to improve their well-being, but also reduce their propensity to supplement
their meagre incomes with illicit economic activities. The large share of salaries and functional
expenses further underlines why attempts at force modernisation have to be put on hold. Since
the proportion of defence budget is decreasing in terms of either Gross Domestic Product
(GDP) or the national budget (Figure 6), the Ministry of Defence faces inherent difficulties to
increase the share of procurement expenditure without compromising the other components of
defence spending.
Under such constraints, the Indonesian government has little option but to look to foreign
loans as an alternative financial source for defence procurement. Figure 7 indicates the proportion

Figure 5. Indonesia’s defence spending, 2001–2010 (in billion US$).

Source: Authors’ data set compiled from a number of academic publications and official documents.
 Defense & Security Analysis 303

Figure 6. The percentage of Indonesia’s defence budget in GDP and national budget.
Source: Authors’ data set compiled from a number of academic publications and official documents.

of foreign loans and actual defence budget relating to annual procurement expenditures from 2005
to 2008. In late 2009, an international consortium provided credit amounting to US$278 million
to support the Ministry of Defence’s programmes, including arms acquisition.47
However, the use of foreign loans, especially export credit for defence procurement is not
without its complications. The disbursement of export credit for arms acquisitions not only

Figure 7. Budget components for defence procurement, 2001–2008. (in billion US$).
Source: Authors’ data set compiled from academic publications and official documents.
304 L.C. Sebastian and I. Gindarsah

involves cumbersome bureaucratic procedures and relatively high rates of interest, but also
depends on the whims of the creditor nation. In 2007, for example, the Russian government
agreed to provide Indonesia with US$1 billion worth-“state credit” for arms acquisition purposes.
The assistance, however, was deferred due to the difficulties faced by the Ministry of Defence in
finding financiers for the acquisition. State and private banks in European countries are reluctant
to provide loans partly because Russia is not a member of Organisation for Economic
Cooperation and Development, which limits export loans to civilian infrastructure projects
such as electricity and toll roads.48 Therefore, as seen from Figure 7, the Indonesian government
gradually reduced the allocation of export credit for its procurement expenditure.
The fact that national defence attracts limited national financial resources somehow has not
translated into an obligation to implement good governance principles in the management of
defence spending to overcome credit shortfalls. Based on two audit reports obtained, in
2009,49 the BPK discovered alarming financial deviations in budget disbursements covering
125 expenditures within the Ministry of Defence (US$2.57 million), Army Headquarters (US
$6.69 million), Navy Headquarters (US$1.7 million), and Air Force Headquarters (US$4.74
million).50
No serious penalties were meted out partly because the authority of BPK does not include law
enforcement, other than providing recommendations to the Indonesian parliament and authorities
within the Ministry of Defence and TNI Headquarters that disciplinary measures be undertaken.
Moreover, the scope of BPK’s audit activities seems to focus exclusively on functional expenses,
excluding major procurement expenditure, especially arms acquisitions. The lack of accountabil-
ity in the management of defence spending has its origins in the nature of military bureaucracy in
Indonesia. The current administration of budgetary matters within the Ministry of Defence and
TNI Headquarters still encompasses long cumbersome bureaucratic structures where the TNI’s
chain of command tends to be inherently structured like a financial management hierarchy.
This long, unwieldy bureaucratic structure has, in fact, caused “bureaucratic inertia” which in
reality contravenes the requirement of national defence, namely the mobility and flexibility of
the military.51
Amidst of financial constraints and the latent inefficiency of its defence spending patterns, the
law demands that the TNI’s force structure be developed based on a proper defence strategy and
taking into account Indonesia’s geostrategic reality as an archipelagic state. The small defence
budget may affect defence spending, but should not compromise strategic planning. Hence, if
budgets have become a major constraint thus leading to substantial changes in defence planning
thinking, there should have at least been some transformation of the TNI’s force structure since
military reform was initiated.

Conclusion
The TNI today is no doubt a different institution from its Suharto era incarnation. Over the last 12
years, it has adapted remarkably well to Indonesia’s new political and social climate. Although the
military’s political prerogatives have been reduced, significantly, the changes instituted have
allowed the military to regain some of its standing in the society and find a new role in defending
Indonesia’s sovereignty and territorial integrity against foreign and domestic threats. In the
interim, the civil–military relationship in Indonesia is still far from the democratic ideal
defined by the exercise of “objective control” over the military. With civilian institutions remain-
ing weak and TNI’s propagated self-image as the “guardian of the unitary state of Indonesia” still
intact, the fragmented nature of democratic politics can still undermine professional standards
within the military establishment.
 Defense & Security Analysis 305

However, unless Indonesia chooses to abandon democracy for some other system of govern-
ance, it is unlikely that the TNI will completely regain the unchallenged power it enjoyed during
Suharto’s authoritarian regime. Civilian elites now have a taste of power and would be unwilling
to allow the military to resume a dominant political role. If the “deficiencies in democratic civilian
control” are overcome, it is not implausible that a productive civil–military relationship will
evolve leading to substantive discussions regarding the future of national defence priorities.
Therefore, woeful expertise demonstrated by Indonesia’s legislators on defence and military
affairs should be addressed and a short-term solution would be their need to develop their
know-how by deepening their engagement with experts based in think tanks and universities,
as well as civil-society advocates.
The availability of sufficient resources is essential for inculcating greater military profession-
alism. Without providing sufficient inducements to wean the military from its political interests
and autonomous financial prerogatives, it will be virtually impossible for any democratically
elected-civilian government to effectively decide on national defence priorities and, more impor-
tantly, to raise professional standards within the military establishment. The “defence-economic
gap” also underscores the immediate need to advance the agenda of military reform a step further
into the “military transformation” realm. This phase is critical to enhance the TNI’s military capa-
bilities and overall effectiveness when carrying out missions mandated by top civilian decision-
makers. President Yudhoyono’s recent initiative to significantly increase the allocation of the
defence budget up to 1.5% of Indonesia’s GDP is a useful starting point to provide the momentum
and the resources to initiate the defence transformation phase in Indonesia.

Notes
1. Leonard C. Sebastian, ‘Susilo Bambang Yudhoyono and his Generals’, Policy Brief 1, S. Rajaratnam
School of International Studies January 2007.
2. William Liddle, ‘Indonesia’s Army Remains a Closed Corporate Group’, The Jakarta Post, June 3,
2003; Marcus Mietzner, ‘The Politics of Military Reform,’ in Post-Suharto Indonesia: Elite Conflict,
Nationalism and Institutional Resistance (Washington, DC: East-West Center, 2006), 2–3.
3. Jun Honna, Military Politics and Democratization in Indonesia (New York: Routledge, 2005), 7.
4. Leonard C. Sebastian, Realpolitik Ideology: Indonesia’s Use of Military Force (Singapore: Institute of
Southeast Asian Studies, 2006), 325–6.
5. Morris Janowitz, The Professional Soldier: A Social and Political Portrait (New York: The Free Press,
1960), 435.
6. Samuel P. Huntington, The Soldier and the State: The Theory and Politics of Civil-Military Relations
(Cambridge, MA: Harvard University Press, 1964), 80–5.
7. Muthiah Alagappa, ‘Military Professionalism: A Conceptual Perspective’, in Military Professionalism
in Asia: Conceptual and Empirical Perspectives, ed. Muthiah Alagappa (Honolulu: East-West Center,
2001), 8.
8. Aurel Croissant and David Kuehn, ‘Patterns of Civilian Control of the Military in East Asia’s New
Democracies’, Journal of East Asian Studies 9, no. 2 (2009): 187–217.
9. Adam N. Stulberg and Michael D. Solomon, Managing Defense Transformation: Agency, Culture, and
Service Change (Survey: Ashgate, 2007), 3.
10. See Stephen Peter Rosen, Winning the Next War: Innovation and the Modern Military (Ithaca, NY:
Cornell University Press, 1991).
11. See Elizabeth Kier, Imagining War: French and British Military Doctrine between the Wars (Prince-
ton: Princeton University Press, 1997).
12. See Barry R. Posen, The Sources of Military Doctrine: French, Britain, and Germany between the
World Wars (Ithaca, NY: Cornell University Press, 1984).
13. See Rosen, Winning the Next War.
14. See Harvey M. Sapolsky, Polaris System Development: Bureaucratic and Programmatic Success in
Government (Cambridge, MA: Harvard University Press, 1972).
15. See Kimberly Marten Zisk, Engaging the Enemy: Organization Theory and Soviet Military Inno-
vation, 1955–1991 (Princeton, NJ: Princeton University Press, 1993).
306 L.C. Sebastian and I. Gindarsah

16. See Emily O. Goldman and Richard Andres, ‘Systemic Effects of Military Innovation and Diffusion’,
Security Studies 8, no. 4 (Summer 1999): 79–125.
17. See Keir A. Lieber, War and the Engineers: The Primacy of Politics over Technology (Ithaca, NY:
Cornell University Press, 2005).
18. See Lev S. Voronkov, John Grin, and Wim A. Smit, ‘Introduction: Military-Technological Innovation
in an Era of Change’, in Military Technological Innovation and Stability in a Changing World, ed. Lev
S. Voronkov, John Grin, and Wim A. Smit (Amsterdam: VU University Press, 1992), 1–13.
19. See John M. Treddenick, ‘Financing the RMA’, in Managing the Revolution in Military Affairs, ed.
Ron Matthews and John Treddenick (Basingstoke: Palgrave MacMillan, 2001), 97–115.
20. See Peter Dombrowski and Eugene Gholz, Buying Military Transformation: Technological Innovation
and the Defense Industry (New York: Columbia University Press, 2006).
21. See Deborah D. Avant, Political Institutions and Military Change: Lessons from Peripheral Wars
(Ithaca, NY: Cornell University Press, 1994).
22. See Matthew Evangelista, Innovation and Arms Races: How the United States and the Soviet Union
Develop New Military Technologies (Ithaca, NY: Cornell University Press, 1988).
23. Evan A. Laksmana, ‘Defence and Leaders Transformation’, The Jakarta Post, May 12, 2010.
24. Stephen Peter Rosen, ‘New Ways of War: Understanding Military Innovation’, International Security
13, no. 1 (Summer 1998): 134–68; Michael McNerney, ‘Military Innovation During War: Paradox or
Paradigm’, Defense & Security Analysis 21, no. 2 (2005): 202.
25. See ‘Surveys Reveals ABRI’s Poor Public Image’, The Jakarta Post, September 29, 1998.
26. See Indonesian Armed Forces Headquarters, ABRI Abad XXI: Redefinisi, Reposisi dan Reaktualisasi
Peran ABRI dalam Kehidupan Bangsa [21th Century ABRI: Redefinition, Re-position, and Reactua-
lization of ABRI’s role in the Nation’s Life] (Jakarta: Mabes ABRI, 1998).
27. Harold Crouch, Political Reform in Indonesia after Suharto (Singapore: ISEAS, 2010), 133.
28. See TNI Headquarters, TNI Abad XXI: Redefinisi, Reposisi dan Reaktualisasi Peran TNI dalam Kehi-
dupan Bangsa [21th Century TNI: Re-definition, Re-position, and Reactualization of TNI’s role in the
Nation’s Life] (Jakarta: Mabes TNI, 2001), 10–11.
29. See TNI Commander Decree No. 21/I/2007 on TNI Doctrine “Tri Dharma Eka Karma.”
30. See Ministry of Defence, Doktrin Pertahanan Negara [State Defence Doctrine] (Jakarta: Ministry of
Defence, 2007), 71.
31. ‘TNI Lakukan Efisiensi [TNI does Efficiency]’, Kompas, September 24, 2010; ‘Admiral Agus Suhar-
tono: We Must First Secure the Key Points’, Tempo, October 19, 2010.
32. Mohammed Ayoob, ‘The Security Problematic of the Third World’, World Politics 43, no. 2 (1991):
257–83.
33. Articles 24 and 25 of Law No. 3/2002; Article 67 of Law No. 34/2004.
34. Articles 13 and 14 of Law No. 3/2002 on State Defence; Articles 17 and 18 of Law No. 34/2004.
35. Rizal Sukma, ‘Kajian Kritis terhadap Undang-Undang No. 3/2002 tentang Pertahanan Negara [A Criti-
cal Analysis to the Law No. 3/2002 about National Defence]’, in Penataan Kerangka Regulasi Kea-
manan Nasional [Ordering the Framework of National Security Regulation], ed. T. Hari Prihatono
(Jakarta: ProPatria Institute, 2006), 25.
36. Article 18, Sections 1 and 2 of Law No. 34/2004.
37. Article 19 of Law No. 34/2004.
38. Article 3, Sections 1 and 2 of Law No. 34/2004.
39. See the Explication of Article 3 of Law No. 34/2004.
40. Article 65 of Law No. 34/2004.
41. Kusnanto Anggoro, ‘Konsolidasi Tentara, Inkompetensi Sipil & Reformasi Pertahanan Keamanan
[Soldier’s Consolidation, Civil Incompetency & Defence Security Reformation]’ (paper presented at
ProPatria’s Focus Group Discussion in Jakarta, ProPatria Institute, February 21, 2002).
42. ProPatria’s Working Group, ‘Management and Control of Indonesia’s Defence Resources’, Mono-
graph 10, ProPatria Institute 2007, 28.
43. See International Institute of Strategic Studies, The Military Balance 2010 (London: Routledge, 2010),
405–406.
44. Juwono Sudarsono, ‘Real Military Reforms Depends on Civilians’, The Jakarta Post, June 23, 2004.
45. Andi Widjajanto and Makmur Keliat, Reformasi Ekonomi Pertahanan di Indonesia [Reforming
Defence Economics in Indonesia] (Jakarta: INFID and Pacivis-UI, 2006), 12.
46. See ‘Pemerintah Fokuskan Dalam Negeri [The Government focuses on Domestic Affairs]’, Kompas,
May 10, 2010.
 Defense & Security Analysis 307

47. See ‘Kredit Rp. 2,785 Triliun untuk Operasional Dephan [Rp. 2,785 trillion credit for Ministry of
Defence’s operational]’, Kompas, November 19, 2009.
48. See ‘KE Alutsista Rusia Terkendala Kredit Ekspor [Export Credit(KE) for Russian Weapons con-
strained by Export Credit]’, Republika, February 7, 2006.
49. These reports were the result of a random audit on selected, but not all, bureaus within the Ministry of
Defence, Army Headquarters, Navy Headquarters and Air Force Headquarters structure.
50. See the State Audit Agency, Ikhtisar Hasil Pemeriksaan Semester I Tahun 2009 [Summary of Exam-
ination Result of 1st Semester 2009] (Jakarta: BPK, 2009), 46; State Audit Agency, Ikhtisar Hasil
Pemeriksaan Semester II Tahun 2009 (Jakarta: BPK, 2010), 45.
51. Kusnanto Anggoro, ‘Birokrasi Militer dan Akuntabilitas Anggaran Pertahanan [Military Bureaucracy
and Defence Budget Accountability]’ (paper presented at ProPatria’s Focus Group Discussion in
Jakarta, ProPatria Institute, August 26, 2003); ProPatria’s Working Group, ‘Management and
Control of Indonesia’s Defence Resources Institute’, 21–2.