London, February 06, 2012 – During the
review period, Indonesia has allocated insufficient funds to defense. In 2005,
defense expenditure was allocated 0.82% of the Indonesian GDP. In 2010, this
figure declined to 0.79%, as a consequence of financial constraint and
governmental focus on welfare areas, such as education. However, over the
forecast period, the government has committed to significantly increasing the
defense budget, which could rise to 1.01% of GDP allocated for defense in 2016.
Defense expenditure is expected to experience an overall annual growth of
13.15%, due to the Indonesian economy recording a CAGR of 8.3% over the forecast
period (reference figure 13 below).
The Indonesian defense market is expected to grow at a CAGR of 13.15% during
the forecast period, making it one of the fastest-growing defense markets in the
world. The primary stimulator of defense expenditure is the government military
modernization program, which was undertaken to compensate for the severe
military underfunding during the review period. It is currently estimated that
the defense budget is capable of satisfying only 52% of the country’s required
military defense expenditure.
Indonesia is frequently affected by natural disasters, in which the army is usually deployed to assist search and rescue operations. In preparation for future natural disasters, government expenditure is expected to increase to purchase transport vehicles and systems which can function in both humanitarian missions and military operations.
In 2011, capital expenditure was allocated 35% of the overall defense budget, while revenue expenditure was allocated 65%. However, due to the government plans to modernize the military through the acquisition of the latest weaponry, capital expenditure is expected to increase and average 40% of the total defense budget, with the remainder allocated for revenue expenditure.
During the review period, the country’s arms exports have registered a decline and the only category to register notable export activity is that of aircraft parts. Indonesia prefers to procure arms from domestic companies, however it relies on imports for technologically advanced weapons which domestic companies are unable to supply. The amount of defense imports has increased during the review period.
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For more information on the article, please contact:
Press Contact:
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Tel: +44 (0) 20 7936 6671
shelly.wills@industryreview.com
Indonesia is frequently affected by natural disasters, in which the army is usually deployed to assist search and rescue operations. In preparation for future natural disasters, government expenditure is expected to increase to purchase transport vehicles and systems which can function in both humanitarian missions and military operations.
In 2011, capital expenditure was allocated 35% of the overall defense budget, while revenue expenditure was allocated 65%. However, due to the government plans to modernize the military through the acquisition of the latest weaponry, capital expenditure is expected to increase and average 40% of the total defense budget, with the remainder allocated for revenue expenditure.
During the review period, the country’s arms exports have registered a decline and the only category to register notable export activity is that of aircraft parts. Indonesia prefers to procure arms from domestic companies, however it relies on imports for technologically advanced weapons which domestic companies are unable to supply. The amount of defense imports has increased during the review period.
To purchase the full report, please click here.
About Industry Review:
Industry Review is a collection of incisive, regularly updated market reports across 40+ industry sectors and 100+ countries.
We provide access to the latest data on global and local markets, key industries, top companies, M&A activity, new product launches and trends so you can make faster and better informed business decisions.
The reports in our store draw on robust primary and secondary research, proprietary databases, industry surveys and insightful analysis from our own expert teams and from carefully selected third-party publishers.
With access to over 400 in-house analysts and journalists, and a global media presence in over 30 industries, Industry Review delivers in-depth knowledge of local markets worldwide.
For more information, please visit our website at www.industryreview.com
For more information on the article, please contact:
Press Contact:
Shelly Wills
Tel: +44 (0) 20 7936 6671
shelly.wills@industryreview.com
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