Thesis Proposal Arms maintenance as a Rational Decision for Force Modernization in Indonesia (20 October 1999 – 20 October 2009) Wendy Andhika Prajuli 698330338 Background

Arms maintenance as a Rational Decision for

Force Modernization in Indonesia

(20 October 1999 – 20 October 2009)

Wendy Andhika Prajuli

698330338

Since 1998, some scholars in Indonesia argue that Indonesia needs to build-up or increase its relative military capability by purchasing weapons to strengthen Indonesia’s deterrence effects capability to others. For example, Andi Widjajanto, an Indonesian military expert, wrote:

“Program pengembangan senjata yang semula diarahkan untuk program arms maintenance digeser menjadi program arms disposal dan arms build-up… Program arms build-up dilakukan untuk mengisi kekosongan sistem persenjataan karena program arms disposal dan sekaligus memperkuat elemen postur pertahanan

(Weapons development programs which were originally directed to the arms maintenance are shifted into arms disposal and arms build-up programs... The arms build-up programs need to be conducted to fill the deficiency of weapons systems due to the arms disposal programs and also strengthen the elements of defense posture).”¹

Indonesian government, however, chose arms maintenance² as weapons modernization programs. The Indonesia’s decision on this arms modernization can be seen from some variables. Firstly, are Indonesian Defense Whitepapers 2003 and 2008. The white paper 2003 states:

“Pembangunan kekuatan pertahanan negara Indonesia bukan untuk memperbesar kekuatan, tapi mengisi kesenjangan antara kondisi nyata dengan kekuatan sesuai Tabel Organisasi dan Personil atau Daftar Susunan Personel dan Peralatan.

(Defence force development is not aimed at increasing power, but at filling the gap between the real situation in accordance with the Organization and Equipment Table (TOP) and the List of Personnel and Equipment Composition (DSPP).)”.³

Similarly, Defense Whitepaper 2008 words that for some years forward Indonesia’s orientation to modernize its military weapons is still to replace worn-out weapons.⁴

Secondly, Rencana Strategis Pembangunan Pertahanan tahun 2000-2004 (Defense Development Strategic Planning 2000-2004). On this document, the government wrote during 2000 to 2004 Indonesia does not have a plan to increase its military power, but only change its expired date military stuffs with the new ones.⁵

Thirdly, in 2006 Indonesian Navy headquarter published document named Rencana Pembangunan Kekuatan TNI-AL Jangka Panjang (The Long-term Planning of Navy Modernization). In this document the Navy explained that, at least, from 2004 until 2014 Indonesian Navy only does arms maintenance to reach its minimal essential force capability.⁶

Furthermore, there are two indicators that can be used to examine whether one country is engaged in an arms maintenance, build-up or race. The first indicator is rooted from the action-reaction model that is a classical view of arms dynamics. This model has a basic preposition that states strengthen its armament because of the threat the states perceive from other states. It explains that arms dynamics, primarily, are caused by external factors. An action by any potentially enemies to increase its military power will raise the level of threat seen by other states and cause them to react by increasing their own power.⁷ Therefore, this proposition explains implicitly that the pattern of force modernization that will be chose by a state is defined by state’s threat perception.

Indonesia classified its perception of threats into three levels, namely global, regional and domestic level. It was explained that, in global and regional level, Indonesia did not have any potential hostile state because of security problems would be dominated by non-conventional issues, such as terrorism, ethnic conflicts, money laundering, human trafficking and drugs trafficking. Both in Defense White Paper 2003 and 2008, the government says clearly that any aggression and invasion by other states to Indonesia have little possibility to be happened.

In contrast, Indonesia believes its security threats will be dominated by non-military domestic security problems, such as separatism, terrorism, horizontal conflicts, riots, piracy, illegal fishing, illegal logging and natural disaster.⁸

Indonesia believes that every interstate conflict can be solved by diplomatic and non-military mechanism. Furthermore, Indonesia does believe United Nations and international society have ability to avoid any aggression and invasion to Indonesia.⁹

At last, we can say that Indonesia did not have conventional threat perception, to be exact, any possibility of aggression by other countries. Second, Indonesia’s defense system did not develop against threats from other countries.

The second indicator is military expenditure as percentage of GNP.¹⁰ If military expenditure is constant or is a declining percentage of GNP, then one is probably observing maintenance or build-down, especially where GNP itself tends to rise at steady but not spectacular rate. Even though, absolute amounts spent will rise, the increase will mostly reflect the rising cost of modern weapons compared with the older generations they replace.¹¹

In 1998, Indonesia’s military budget as percentage of GNP was 1.09%. Next, in 1999 the percentage was increasing to 1.34%. But, in 2000, it was decreasing to 0.93%. Then, in 2001, it decreased again to 0.58%. In 2002, the percentage increased and reached level 0.70%. Next, in 2003 and 2004, were constant in level 0.93% and 0.98% (table 2). The percentages showed that, throughout 1998-2004, Indonesia’s military budgets were relatively constant.

Same condition also can be found when we measure the budget as percentage of GDP. SIPRI states that during period from 1998 to 2006 Indonesia’s military expenditures as percentage of GDP were constant with ranges from 0.9% to 1.4% (see table 3).

Also, by using data from table 1 we can see that the numbers of Indonesia’s military expenditure are not large. In fact, Indonesia’s military budgets were not enough to fulfill all military needs. The Indonesian government only had the ability to fulfill 74.12% of the real budget of military’s needs. Then, only 35% of 74.12% budget that used for maintaining and buying new weapons. To solve this problem, Indonesia government tried to use an export credit mechanism to buy some weapons. This was the reason why, from 2000-2004, the use of an export credit mechanism to buy weapons was increasing. Even, on that period, 50% of the government’s export credit was used by the military sector.¹²

Table 1

Indonesia’s Military Expenditure 1998-2009

(in US$ and IDR)

1) Bank of Indonesia, Indonesian Economic Annual Report, 2003, 2004 and 2005.

2) Departemen of Defense.

*) Indonesian Rupiahs

Finally, based on all these variables we can conclude that during period 1998 to 2009 Indonesia did arms maintenance policy to modernize its weapon equipments.

Force modernization in Southeast Asian countries have started since mid 1980s. From 1985 to 1996, Allan Collins noted that the Southeast Asian countries’ military expenditure increased significantly as well as their arms transfer. During that period, arms transfer to Southeast Asian countries increased from 11.9% of world total in 1985 to 23% in 1996. However, the economic crisis on 1997 had postponed their arms acquisition planning. Then, as the region recovers from the crisis, the arms procurements were rising again.¹³

Thailand was the most affected country by the 1997 economic crisis. The crisis seriously influenced Thailand’s defence budget and procurement. The economic crisis caused Thailand had to cut its defence spending from US$4.2bn (1995) to US$2bn (1998). This condition forced Thai government had to postpone or reduce its military modernization plans as well as Indonesia, Malaysia and the Philippine. But, Singapore was an exception because from 1998 to 2002 Singapore’s defence budget risen significantly and thus, continued the military modernization. Tim Huxley says in his article, “though Singapore’s military procurement plans were apparently stretched over longer timeframes because of the recession, there was no significant hiatus in the overall ‘SAF2000’ modernization project.”¹⁴

Force modernization in Singapore has been planned since the mid 1980s and it stressed on the importance of maintaining and if possible, enhancing the Singapore Armed Forces’ technological advantages over potential adversaries by developing advanced C4ISR and logistic capabilities.

To reach RMA capability, Singapore built its new Ministry of Defense Headquarters at Bukit Gombak with hardened underground operations control center. The headquarters is linked through microwave and fiber-optic channels to an island-wide command, control, communication and intelligence network.¹⁵ Furthermore, to enhance this capability Singapore then bought 6 Formidable-class frigates from France. Singapore also bought, at least, 24 F-15SG combat aircraft from the U.S. This purchasing included:¹⁶

• 
  200 AIM-120C Advanced Medium Range Air-to-Air Missiles (AMRAAM).
  
• 
  6 AMRAAM Captive Air Training (CAT) Missiles.
  
• 
  50 MK-82 GBU-38 Joint Direct Attack Munitions (JDAM) w/BLU-111 warhead.
  
• 
  44 AN/AVS-9(V) Night Vision Goggles.
  
• 
  24 Link 16 Multifunctional Information Distribution System/Low Volume Terminals (Fighter Data Link Terminals).
  
• 
  30 AGM-154A-1 Joint Standoff Weapons w/BLU-111.
  
• 
  30 AGM-154C Joint Standoff Weapons.
  
• 
  200 AIM-9X SIDEWINDER Missiles.
  
• 
  24 AIM-9X SIDEWINDER CAT and Dummy Missiles.
  
• 
  300,000 20mm Practice Round Cartridges.
  
• 
  100 KMU-556 GBU-31 JDAM Tail Kit Assemblies.
  
• 
  4 MK-82 and MK-84 Bomb Practice trainers.
  
• 
  Electronic warfare systems and support.
  

Economic crisis had forced Malaysia reducing and extending its procurement, even though its defense program improved quickly after the crisis. For instance, Malaysia has to cut its plan to develop 21 New Generation Patrol vessels into 6 ships only. However, 18 Su-30MKK combat aircraft purchased in 2003 would still be delivered in 2008. 4 A400M heavy transport aircraft ordered in 2005 will be in service in 2013. Malaysian navy bought 2 Scorpene-class submarines from France and the first submarine has arrived in Malaysia on September 17, 2009. The second was predicted to arrive in Malaysia on early June 2010.¹⁸ In addition, 4 other locally-built Meko-100 type large patrol vessels would be in service by 2010. Next, in August 2007, 18 Avibras Astros II multiple rocket launch systems were purchased by Malaysia to increase its army’s capabilities.¹⁹ Malaysia will also purchase at least 4 AWACS (airborne warning and control) aircraft.

Similarly, Malaysia has made an agreement to buy 2 British-built Jebat-class frigates. These frigates will be in service by 2015. Malaysian government has an interest too to order new ATGWs (anti-tank guided weapons) and a battlefield management system integrated with command post AFV (armored fighting vehicle) variants. In the longer-term, Malaysian arms forces probably plan to acquire 3 LPD-type multi-role support ships, additional combat aircraft, AEW aircraft, and new armored vehicles.²⁰ Besides, Malaysia has operated MiG-29 and F/A-18D Hornet.

Because of lack of budget, Thai military had to satisfy with significant procurements of second-hand military equipment. Tim Huxley writes that Thailand proposed to barter rice or frozen chicken for military equipment.²¹ Unfortunately, no military companies accepted Thailand’s proposal. However, thanks to the September 2006 military coup which overthrew Thaksin from its power. This military coup succeeded to increase military budget up to 34% in 2007 and 28% in 2008. Some portions of this new budget used by the military leaders to buy 12 JAS-39C/D Gripen multi-role combat aircraft, 2 Saab 1000 Erieye AEW aircraft, and new national air defense system based on the Swedish air force’s Air Force 2000 concept. During this time Thai government also purchased 50 Chinese C-802 naval cruise missiles, 96 BTR-3E1 amphibious APCs, and Israeli machine-guns and rifles.²²

After the democratic elections on December 2007, Thai military leaders proposed a budget, at least, THB317 billion or US$9.3 billion for period 2009-2018, to purchase submarine, additional combat aircraft, and new army equipments. The new government seems to agree with this proposal because in June 2008 Samak Sundaravej’s government proposed to increase the defense budget for the 2009 fiscal year up to THB169.1 billion or US$4.9 billion.²³

According to Indonesia, Tim Huxley states that “the most militarily significant equipment being brought into service during 2008 is the Indonesian Armed Forces’ first Kobra integrated low- to medium-level air defence unit, comprising a 50 km-range search radar, command vehicles, Poprad mobile anti-aircraft missile systems and ZUR-23 anti-aircraft guns.”²⁴ Under the agreement of US$1 billion defence equipment package funded by Russian credit, Indonesia bought 8 Mi-35²⁵ and 20 BMP-3F IFVs for the Marine Corps that will be delivered in 2010. However, there is apparently still no clear information about Indonesia’s plan to purchase 2 Kilo-class submarines that included in the agreement. Anyway, Indonesia had 4 optional countries for its new submarines: Germany (U-209), South Korea (Changbogo), Russia (Kilo class) and France (Scorpen), but then, the government narrowed those into 2 options: Russia and South Korea.²⁶ Indonesia also has decided to buy a squadron of 16 Super Tucano warplanes to replace the 30 years-old OV-10 Bronco aircraft.²⁷

In addition, IISS noted that during 1998-2004 Indonesia purchased several weapons, such as Russian helicopter Mi-2, Mi-17²⁸, Mi-35 and Russian airfighter Su-27 and Su-30²⁹, and Dutch corvette SIGMA-class corvette³⁰. Most of the weapons that bought by indonesia during this periode will be used to strengthen the Indonesian Air Force and Navy.

The Filipino government attempted to implement an ambitious Capability Upgrade Program (CUP) for the armed forces. CUP’s priorities for procurement are infantry weapons, land vehicles, modern communications equipment, and missile-armed fast attack craft. Unfortunately, the defense budget that increased more than 20% in the 2008 and occasional extra-budgetary funding allocations are still inadequate to provide the procurement.

Even though both Myanmar and Vietnam suffer by economic problem, military modernizations in these countries still happen. Both countries bought advanced Russian combat aircraft since 2003. Vietnam ordered new Russian naval vessels and Polish maritime patrol aircraft earlier to strengthen the Navy. But, Vietnam’s budget is still insufficient to order Su-30MK combat aircraft to supplement the 4 similar aircraft delivered in 2004. In addition, in April 2008, Arianespace launched Vietnam’s first satellite, Vinasat-1, from its base in Korou, French Guiana. Vinasat-1 will play an important military part in boosting the independence and security of Vietnam’s military as well as civilian satellite communications.³¹

Carlyle A. Thayer states between 1994 and 2004, Vietnam acquired a total of 12 modern Sukhoi jet fighters from Russia: 7 Su‐27SK Flanker B single‐seater, 3 Su‐27UBK Flanker C two‐seat trainers and 2 Su‐30Ks.³² While, the Navy planned to construct up to 20 ‘blue water’ naval vessels and modernize its Hong Ha and Ba Son shipyards. In December 2006, Vietnam reached agreement with Russia for the purchase of two Gepard‐class (Project 11661) guided missile frigates. Both frigates will deliver expectedly in March 2010 for the first frigate and 2011 for the second.³³

However, the most military purchases done by Vietnam are upgraded, refitted or second hand equipments. For example, in 1997, Vietnam acquired two refitted Yugo‐class midget submarines from North Korea and ordered 40 second‐hand Sukhoi Su‐22M4 fighter bombers from Poland.³⁴

Southeast Asia analysts, such as Desmond Ball, Shannon Selin, Tim Huxley, Susan Willet, Andrew Tan, and Richard A. Bitzinger, believe these force modernizations are arms build-up³⁵³⁶ because it is followed by quantitative and qualitative changes in their capability, those are:

• 
  Developing national command, control and communication systems
  
• 
  Purchasing multi role fighter aircraft
  
• 
  Buying modern surface combatant
  
• 
  Purchasing submarines
  

The cause of the weakness of the development of the current RMA technology in Southeast Asia is military sector is not the first priority of national development of Southeast Asian governments. Economy, education, and health are still the biggest priorities for the government than the military. For example, Indonesian government reported that the main priority of Indonesian National Development for 2005‐2025 is to increase and strengthening economic capability.³⁸ Furthermore, Indonesian government always allocates its national budget for defense in fourth priority after budgets for public service, education and economic sectors.³⁹ Another example is Malaysia. In this country military sector is not the main development priority for Malaysia government as well. It can be seen from the fact that the progress in military procurements is parallel with the progress in economic development. On the other hand, it can be said that Malaysia lift up its military purchases because there is an increase in the military budget as result of the progress in economic development, not because Malaysia shifts its main development priority to military sector.

As explained above, Indonesia has also modernized its military stuffs as well as other Southeast Asian countries. But, it doesn’t change significantly Indonesia’s relative military capability or power.⁴⁰ The military modernization that has been done by Indonesia does not shift its defense posture because air and naval military weapons purchases are just an attempt to maintain some minimum maritime capability.⁴¹ In the other words, Indonesia just did arms maintenance for its force modernization. Consequently, Indonesia’s deterrence effects are low.⁴²

At the same time, interstate relations among Southeast Asian countries are not harmonious. Even though Southeast Asia is relatively a stable region, suspicious and inharmonious relations among the countries are high. For example, because of some issues, tensions between Indonesia and Malaysia increased several times. There are 3 latest issues of conflict between Indonesia and Malaysia: cultural stealing, migrant workers and territorial disputes.

Also, Indonesia and Singapore relations are not always harmonious. Both countries see each other suspiciously as well as the relations between Singapore and Malaysia.⁴³

Unfortunately, this region does not have multilateral mechanisms to resolve conflict.⁴⁴ ASEAN is never being a tool for conflict resolution among its members. Consequently, security condition in Southeast Asia is always uncertain. Conflict among nations potentially happens to escalate into war anytime. In this regard, countries in Southeast Asia try to use their own capability, especially military forces, to secure their existence. Even, scholars argue that those are the reasons behind arms build-up program in the region.⁴⁵ The logic is states do arms build-up program to guarantee their military capabilities always get closer to and capable against their rivals.

These facts gave me questions, why did Indonesian government, during the period 1999-2009, choose arms maintenance as the arms modernization policy? Why the government didn’t choose arms build-up as the arms modernization policy considering to the arms build-up in Southeast Asian countries? These questions will be my research questions on my thesis. Most discourses in Indonesia believe the reason behind the decision is Indonesia’s lack of military budget to build up its military capability, but I believe the reason is beyond the lack of money because if the government wants, they can put military budget at the first priority and allocate more money to it.

Research Objectives

Finding the answer why Indonesian government chose arms maintenance as force modernization policy during period 1999-2009.⁴⁶

There are only a few academic resources discussing about Indonesian force modernization. Security and defense debates in Indonesia are still focusing on problems of democratizing military force, mostly on how to dislodge military from politics and economy. There 5 resources talks about force modernization in Indonesia. First, Andrew Tan’s working paper Force Modernization Trends in Southeast Asia.⁴⁷ However, Tan’s working paper does not particularly talks about force modernization in Indonesia. It explains generally the current force modernization in Southeast Asian countries. Tan explains the trend of force modernization in every country one by one. He also mentions some causes of force modernization in Southeast Asia, such as prestige, corruption, supply side factors and economic growth amongst those countries.

Second, Sheldon W. Simon’s article Southeast Asia’s Defense Needs: Change or Continuity?. This article observes military capabilities of 6 Southeast Asian (Malaysia, Indonesia, Singapore, the Philippines, Thailand and Vietnam) countries and their relations with outside nations, such as the U.S., China, Japan, India and Australia. Simon’s main arguments are: 1) Internal threats are still dominant in Southeast Asia; 2) Even though, those countries are developing their naval and air capability, they are not acquiring “state-of-the-art weapons systems”,⁴⁸ and; 3) Southeast Asian nations are trying to balance Chinese influence in Southeast Asia by accepting U.S. presence in the region as well as Japan and India.

Third, a policy paper written by Andi Widjajanto (et.al.) Indonesia Military Reform: 2009-2014. This policy paper only discusses very slightly about force modernization in Indonesia because the paper focuses on the military reform. Related to force modernization, the paper describes 2 things: 1) The government’s plan of long term development of military force (2009-2029). Most of the description explains the 3 phases of Navy force development:

“Phase I 2004-2009 was launched to fill the gap between the current force and Minimal Essential Objective Force; phase II 2009-2014 will be launched to maintain and modernize Minimal Essential Force; and phase III 2014-2029 will be initiated to move beyond the Minimal Essential Force structure to reach a Future Force of 2029.”⁴⁹

2) Indonesia’s dependency on imported weapons from the U.S. and European Union is high and still remains for the 2004-2029 armed procurement program.

Third, research report written by Andi Widjajanto and Makmur Keliat, Penggunaan Fasilitas Kredit Ekspor untuk Pengadaan Alat Utama Sistem Persenjataan (2000-2004) or The Use of Export Credit Facilities for Weapon Procurements in Indonesia (2000-2004). The main argument of this research report is lack of budget has driven Indonesian government to use export credit facilities to procure weapons for armed forces.⁵⁰

Fourth, in a sub-chapter of his book RealPolitik Ideology: Indonesia’s Use of Military force,⁵¹ Leonard C. Sebastian explains armed procurements and capabilities of Indonesian armed forces. He says Indonesia has passed 3 phases of military acquisitions (1960s, 1970s and 1980s). 1960s Soviet is the major supplier of weapons procurement. During this period Indonesia received a lot of Soviet-made weapons, such as MIGs fighters, destroyers, frigates, submarines and others sophisticated weapons. At that time, Indonesian had the most powerful armed forces in the region. Second phase was in 1970s. During this period, Indonesia and other ASEAN members started to buy second-hand weapons because the reduction of military aid. The last phase was in 1980s. In 1980s Indonesia started to buy new and sophisticated weapons, such as F-16s, Harpoon and Exocet missiles. However, since mid-1980s the procurements were becoming slow because of financial reason. After 1983, Sebastian states that Indonesia stopped its air-fighter procurements until 1986 when the government spent US$ 432 million to buy 8 F-16A fighter/strike and 4 F-16B fighter/trainer. At that time the government also spent its money to buy 4 (second hand) Dutch Van Speijk Class frigates and 2 minehunters. It seems since early 1980s Indonesia was trying to develop its naval capabilities. However, these military procurements do not increase military power significantly because of financial problem.⁵²

The government has improved the military budget to increase military capability, but the improvement will not be effective to increase military capability by buying new weapons. There are 3 arguments for this. First, military budget are used to correct the military salary that is below standard. Second, Indonesia military system is diverse in origin. Consequently, the government has to spend a lot of money to maintain the system. Third, corruption in arms procurements is high.⁵³

In this sub-chapter, Sebastian also criticize 3 alternative methods of arms procurement offered by Aaron Karp, namely buying secondhand weapons, buying local products and using counter-trade mechanism. Sebastian says the first method is not new idea for Indonesia. The second method is not effective because the price of local products is not cheaper than the foreign products. Besides, local products cannot satisfy the military in terms of specifications and quality. The last method is not effective as well because the method is prone to generate controversy and corruption.⁵⁴

In conclusion, even though these academic resources talk about Indonesian force modernization, most of resources focus on to discuss another topic and just put Indonesian force modernization as a sub-topic. Hence, my research is trying to fill this space.

Theoretical Framework

I will use rational actor model (RAM) as theoretical framework for my research. RAM has 2 basic assumptions. First, state is a unitary actor. State is a “single, homogeneous entity, and presumes that all policy makers go through the same rational thought processes”.⁵⁵ Second, state is a value-maximizing actor. It means in deciding which policy it should be taken a state will choose “the course of action that maximizes their gains/minimizes their losses.”⁵⁶ According to Allison, value-maximizing behavior has 2 propositions:⁵⁷ 1) “An increase in the cost of an alternative reduces the likelihood of that action’s being chosen,” and; 2) “A decrease in the cost of alternative increase the likelihood of that action’s being chosen.”

Brown explains that to understanding decision made by a state a researcher should do a process of rational reconstruction.⁵⁸ The process of rational reconstruction is an armchair analysis that puts a researcher “into the position of the decision-maker, and attempts to simulate the process of reasoning which have led the decision maker to act as he or she did.”⁵⁹ Similar with the process of decision-making, the process of rational reconstruction has 3 steps. It is started by 1) Discovering the goals that the state wants to be reached; 2) Identifying “all available policy options”⁶⁰ and the consequences or outcomes of each option. Allison says consequences or outcomes are always related to benefits and cost in line with state’s goals, and; 3) Choosing option that mostly benefit in accordance with state’s goals.⁶¹

Implementing RAM

Related to my research problem, the goal of government to modernize the military forces is to secure the country and its people. There are 2 available options that can be chosen by the government to modernize the military, namely arms build-up and arms maintenance.

Before continuing with explanation about the consequences or the outcomes of each available alternative, we have to understand 3 realities in Indonesia. First, Indonesian military force is lack of military budget because the government cannot cover all military budgets proposed by the Department of Defence (now known as Ministry of Defence).⁶² Second, Indonesia’s external or traditional threats are low. Otherwise, its internal and non-traditional threats are high.⁶³ Third, the experience of living in military domination for more than 30 years, Indonesian society still has more or less sensitive feeling about the military.

As mentioned above, Indonesia has 2 options to modernize its military force, in which each option has its own consequences or outcomes.

1. 
   Arms build-up program.
   
   1. 
      Positive outcome: This is an ideal option because the program would increase military force power. Thereafter, it would increase deterrent effect as well as capability to deal with threats.
      
   2. 
      Negative outcomes: However, because of lack of money, the government needs to allocate more money to military budget to do this option. Therefore, the military budget will overtake the position of other sectors, such as public services, education and economy. According to the society’s sensitiveness over military, the sharply increase in military budget would bring suspicious and strong resistance over the policy from the society. Consequently, this condition can cause political upheaval and threaten economic development implemented by government. Economy is a sensitive issue in Indonesia because most of the insurgencies were caused by economic problems. In other words, arm build-up could indirectly decrease government’s economic development economic and at last it would indirectly increase internal threats in Indonesia.
      
2. 
   Arms maintenance program.
   
   1. 
      Positive outcomes: the government does not need to increase military budget sharply. Hence there would be no political upheaval and economic decreasing. At last, internal threats would not increase.
      
   2. 
      Negative outcomes: By doing arms maintenance program Indonesian military power would not increase significantly. Hence, the impacts on security are 1) Deterrent effect would still be low, and; 2) The armed forces capability to deal with external threats, especially from sea and air are low.
      

So, the cost of arms maintenance program is lower than the arms build-up because the arms build-up can induce internal threats that have been the biggest problem of security in Indonesia.

The government chose arms maintenance because it would not increase internal threats in Indonesia.

My research will treat policy consequences as an independent variable that affecting government’s preference on force modernization program (see picture 1).

I will use quantitative and qualitative approaches on my research. I planned to hold interviews with 4 persons for my research, namely:

1. 
   Juwono Sudarsono, a former Ministry of Defense
   
2. 
   Effendi Choirie, member of Indonesia parliamentary
   
3. 
   Edy Prasetyono, a professor and an expert of security and defence studies
   
4. 
   Mufti Makaarim A., a director of Institute of Defense, Security and Peace Studies (IDSPS)⁶⁴
   

This thesis will be organized as follow:

• 
  Chapter I is an Introduction. In this chapter I will explain my research methodology, such as background, research objectives, literature review, theoretical framework and organization of chapters.
  
• 
  In chapter II I will explain about Indonesian force modernization since 1999 to 2009. In this chapter I will describe documents and variables that explaining that during period 1999 to 2009 Indonesian government chose arms maintenance as a policy for force modernization.
  
• 
  In Chapter III I will analyze why Indonesian government chose arms maintenance policy. It will rely on the analysis of the consequences of each available option of force modernization.
  
• 
  Chapter IV is a conclusion.
  

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• 
  Bank of Indonesia, Indonesian Economic Annual Report, 2003, 2004 and 2005.
  
• 
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• 
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  Collins, Alan. The Security Dilemma of Southeast Asia. Singapore: ISEAS. 2000.
  
• 
  Collins, Allan. Security and Southeast Asia: Domestic, Regional, Global Issues. Colorado: Lynne Rienner. 2003.
  
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  Pramodhawardani, Jaleswari & Andi Widjajanto (eds.). Bisnis Serdadu: Ekonomi Bayangan. Jakarta: The Indonesian Institute. 2007
  
• 
  Sebastian, Leonard C.. Realpolitik Ideology: Indonesia’s Use of Military Force. Singapore: ISEAS. 2006.
  
• 
  Wittkopf, Eugene R. (et.al.). American Foreign Policy: Pattern and Process. 6^th edition. Belmont CA: Thomson/Wadsworth. 2003.
  

• 
  Asia Pacific Defense Reporter, May 2002.
  
• 
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• 
  Contemporary Southeast Asia, Volume 18, Number 4, March 1997.
  
• 
  Contemporary Southeast Asia. August, 2008.
  
• 
  International Security, Vol. 18, No. 3, Winter 1993/1994.
  
• 
  The Economic of Peace and Security Journal, Vol. 4, No. 2, 2009.
  

• 
  Ball, Desmond “Trends in Military Acquisitions in the Asia Pacific Region: Implications for Security and Prospects for Constraints and Controls”. SDSC Working Paper No. 273. July 1993.
  
• 
  Huxley, Tim and Susan Willet. “Arming East Asia”. Adelphi Paper No. 329. International Institute of Strategic Studies, London. 1999.
  
• 
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• 
  Tan, Andrew. “Force Modernization Trends in Southeast Asia”. IDSS Working Paper No. 59. Institute Defence and Strategic Studies, Singapore. January 2004.
  
• 
  Thayer, Carlyle A. “Vietnam People’s Army: Development and Modernization”. Research Monograph. August 23, 2009. Sultan Haji Bolkiah Institute of Defence and Strategic Studies. Bandar Seri Begawan. Brunei Darussalam.
  
• 
  Widjajanto, Andi (et.al). “Indonesia Military Reform: 2009-2014”. Policy Paper I. Jakarta: Pacivis UI. 2009.
  
• 
  Widjajanto, Andi & Makmur Keliat. “Penggunaan Fasilitas Kredit Ekspor untuk Pengadaan Alat Utama Sistem Persenjataan Indonesia (2000-2004)”. Research Report. Jakarta: Pacivis UI. 2005.
  

• 
  Antara News. September 8, 2009. http://www.antara.co.id/en/news/1252391638/ri-may-purchase-kilo-or-changbogo-class-submarines.
  
• 
  Antara News. December 15, 2009. http://www.antaranews.com/berita/1260893897/kapal-selam-tni-al-diperbaiki-di-korea-selatan.
  
• 
  Bernama. November 13, 2007. http://www.bernama.com/maritime/printable.php?id=295768 .
  
• 
  Defense News. http://www.defensenews.com/story.php?i=3692270.
  
• 
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