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SHAH ALAM: In the post on the 2024 national security budget, Malaysian Defence wrote that the Defence Ministry’s Development Expenditure (DE) or budget for RMK12 was RM55 billion though the actual allocation is RM22.2 billion.
Defence Minister DS Khaled Nordin in Dewan Negara on March 24 stated that the ministry will propose that the budget be increase up to 1.5 per cent of the GDP by 2030. This means that the budget should go up next year to 1.2 percent as the 2025 allocation – according to him – was only 1.1 per cent (RM21.1 billion). He said 1.5 per cent budget allocation was necessary to achieve the aspiration of the 2019 Defence White Paper.
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According to my calculations the defence budget needs to be increased by RM7.67 billion or RM28.77 billion -compared to the 2025 budget – to achieve the 1.5 per cent target. It is interesting to note that in 2019, the people who were involved in drafting the DWP told me that they tried to put the 1.5 per cent figure in the document but were not allowed to do so by the Finance Ministry people.
That is the reason the 1.5 per cent is an aspiration and not a target. I was told that without the GST it was difficult for the bean counters to make projections for future budgets. As as a side, the Indonesian government has also promised to increase its defence budget to 1.5 per cent by 2029. In contrast Singapore defence budget is fixed for 3.3 per cent for 2025 and will likely remained or higher in the near future.
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Based on Khaled’s assertion, I assuming to achieve the 1.5 per cent allocation to the GDP, that the DE allocation for RMK13 will be RM55 billion the same as in RMK12. Will this be achievable? My guess is as good as yours.
Why do we need to spend so much on DE? Apart from recapitalisation of assets, most of the Armed Forces infrastructure is also in need of upgrade and redevelopment. Most of the infrastructure – apart from those developed under the built and transfer method – was built in the 1970s and 1980s.
The built and transfer method was introduced in the 1980s so the government will not have to spend money building camps and their facilities. The deal involved private companies building a new camp in a separate location and once completed it will be given the rights to the old camp’s land. While this method sounds good on paper, the government and taxpayer lose out as the cost to build the new camp is usually much cheaper than the market price of the old camp land.
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And in most cases, such deals were mostly done via direct award and without open tenders. In some cases, the old camp land is transferred to these companies without them completing the new camps. In the case of the Sg Besi airbase, 1MDB was supposed to pay for the whole deal but in the end, it was the taxpayers that paid for whole deal and 1MDB debts, of course.
Apart from the lack of money to redevelop them, even if the camps and facilities needed redevelopment, it is hard to move even a single battalion around as there are no spare facilities to send them to. Hence the current state of conducting ad-hoc upgrades – fixing roofs etc – of the facilities even if the structure of the buildings remained the same. It must be said that this is the same with many civilian facilities and police camps around the country. Of course, MAF also need to recapitalise its assets and equipment as well.
From the Dewan Negara Hansard:
Tuan Yang di Pertua, terima kasih kepada Yang Berhormat Senator Tuan Amir bin Md Ghazali yang
bertanyakan sama ada kerajaan mempertimbangkan untuk meningkatkan bajet pertahanan
atau mempercepatkan pemodenan ketenteraan dalam menghadapi ancaman yang tidak
dijangka.
Tuan Yang di-Pertua, kerajaan sentiasa prihatin terhadap keselamatan dan
kedaulatan negara terutamanya dalam menghadapi ancaman yang semakin kompleks dan
dinamik. Dalam hal ini, sememangnya kerajaan sentiasa menimbangkan untuk meningkatkan
perbelanjaan pertahanan negara. Bagi pelaksanaan penggal kedua Kertas Putih Pertahanan
khususnya dalam konteks bajet dan perbelanjaan pertahanan, Kementerian Pertahanan akan
mencadangkan agar peruntukan perbelanjaan pertahanan negara diunjurkan sebanyak 1.5
peratus daripada Keluaran Dalam Negara Kasar menjelang tahun 2030 bagi memastikan
kejayaan pelaksanaan Kertas Putih Pertahanan.
Untuk makluman, kita kini memperuntukkan kira-kira 1.1 peratus daripada KDNK
negara untuk tujuan pertahanan. Cadangan meningkatkan perbelanjaan pertahanan ini
adalah seiring dengan pendekatan negara-negara jiran yang memberi keutamaan tinggi
kepada sektor pertahanan bagi melindungi kepentingan negara yang berdepan cabaran yang
semakin kompleks pada masa kini dan masa hadapan.
Dalam aspek mempercepat pemodenan ATM bagi menghadapi ancaman tidak
dijangka pula, terdapat beberapa langkah dan strategi yang telah dan sedang diusahakan
oleh kerajaan.
Pertama, Kementerian Pertahanan melalui Kertas Putih Pertahanan telah menetapkan
hala tuju yang jelas bagi menjadikan ATM sebagai angkatan masa hadapan yang lebih
bersepadu, tangkas dan berfokus menjelang 2030 termasuklah dalam menghadapi ancaman
yang tidak dijangka. Ancaman yang tidak dijangka merujuk kepada ancaman keselamatan
yang berlaku secara tiba-tiba dan sukar diramal. Ini termasuk serangan siber, peperangan
hibrid, serangan pengganas, penggunaan dron dalam peperangan, bencana alam dan konflik
serantau.
Kedua, selain memastikan perolehan aset-aset strategik dilakukan dengan cara yang
memenuhi keperluan ATM, proses pemodenan ATM turut diberikan perhatian dengan meneliti
keperluan-keperluan baharu. Ini termasuklah meneliti keperluan mempunyai angkatan siber
yang khusus, lengkap dan berkeupayaan menghadapi ancaman siber dan misinformation
campaign dengan izin Tuan Yang di-Pertua.
Angkatan ini akan dilengkapi dengan kepakaran teknikal yang tinggi merangkumi
bidang seperti cyber threat intelligence, incident response, digital forensic serta active cyber
defense. Keupayaan ini membolehkan ATM bukan sahaja bertindak balas terhadap serangan
siber, tetapi juga mampu menghalang dan meneutralkan ancaman sebelum ia memberi kesan
terhadap operasi ketenteraan dan keselamatan negara.
Ketiga, Institut Penyelidikan Sains dan Teknologi Pertahanan Negara (STRIDE) telah
turut menyenaraikan bidang-bidang fokus yang kritikal untuk diterokai dan diberikan perhatian
agar sektor pertahanan negara berupaya berhadapan dengan perkara-perkara seperti cyber
warfare, unmanned warfare, drone warfare dan CBRN warfare, dengan izin.
Kesemua ini merupakan antara langkah pemodenan yang bukan sahaja akan
meningkatkan keupayaan ATM secara umum, tetapi memperkemas persediaan negara
menghadapi sebarang ancaman yang tidak dijangka. Terima kasih.
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— Malaysian Defence If you like this post, buy me an espresso. Paypal Payment
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View Comments (30)
I will repost below my comment i made yesterday at the 2025 budget page
I understand that DE (CAPEX) is divided into 2
1) services and supply (including facilities building)
2) asset procurement
I believe we should focus the planning on the DE budget allocation for asset procurement
Even if we don't get that 1.5% of GDP level, maintaining a DE budget at the minimum the amount that we get in 2025 for the next 5 years (2026-2030) will still be a lot more than what we received previously.
https://www.malaysiandefence.com/2025-national-security-budget/#comment-946774
What can we have for our next defence budget in RMK13 2026-2030
If we use the 2025 budget as a benchmark, as the minimum annual budget we can allocate from 2026-2030, i believe that will be a considerable increase in the available CAPEX / DE budget for ATM and APMM.
RM21.2 billion overall defence budget for a year is about USD4.8 billion. Still lower than neighbouring Philippines, Thailand, Indonesia and Singapore but an increase nevertheless.
CAPEX / DE for ATM asset procurement is RM5.585 billion, or around USD1.26 billion.
CAPEX / DE for APMM asset procurement is RM570 million,.or around USD130 million.
If we extrapolate the CAPEX / DE for asset procurement to 5 years :
CAPEX / DE for ATM asset procurement in RMK13 2026-2030 would be around USD6.3 billion
CAPEX / DE for APMM asset procurement in RMK13 2026-2030 would be around USD0.65 billion
So if the government can confirm to allocate that kind of budget for RMK13 2026-2030, the CAPEX / DE for individual services asset procurement could be :
TLDM : USD2.4 bil (from USD2 bil)
TUDM : USD2 bil (from USD1.6 bil)
TDM : USD1.6 bil (from USD1.3 bil)
Tri services : USD0.3 bil (from USD0.1 bil)
APMM : USD0.65 bil (from USD0.5 bil)
With that kind of budget, I don’t see any reason for us needing to lease helicopters etc. if we properly prioritise our future plans for RMK13 2026-2030. Something we still have time to tweak and change.
GST reintroduction is one thing but a better way is to plug all the subsidized goods leakage especially to "neighbor" countries as well as inflow of untaxed items to malaysia like cigarettes, liquor etc
Also GST should be capped at 3 percent for the time being. should be enough to mitigate ron95 subsidies and whatnot
As we are discussing about RMK13 2026-2030 DE, what are the priorities that is known for our military services?
TLDM
- 3x STM Turkiye Corvette batch 2
- 2x MRSS (i don't agree on this, for USD816mil it is better used elsewhere)
- 4x ASW Helicopter (we can have more than 4 if we go for used SH-60J from JMSDF)
- 4x AW139 HOM batch 2 (we should buy outright)
TUDM
- 18x FA-50M batch 2 (maybe we can do a mix of 8x FA-50 + 18x cheaper TA-50 to get more airframes than just additional 18, as we will need extra FLIT numbers for training KAF crew in the near future)
- Kuwaiti Hornets. How much we have to pay, if any? Or it will be traded for our training services for KAF aircrews?
- 4x ATR-72 MPA batch 2
- 3x TAI ANKA batch 2 (i would prefer TB-3 but ANKA would be the one TUDM already have)
- CSAR heli??
- MERAD ?? (i prefer GAPU to take this up)
- Ground radars to replace the Marconis in semenanjung
TDM
- PT-91M SLEP / Upgrade (this is under OPEX or CAPEX?)
- MIFV/Adnan SLEP / Upgrade (this is under OPEX or CAPEX?)
- 155mm SPH
- 105mm towed howitzer (IMO not a priority but seems TDM thinks it is)
- Coastal Anti Ship Missile Batteries (this is my personal opinion)
This is what i think an alternative RMK13 and beyond DE spending for
TLDM
https://pbs.twimg.com/media/GmZDvvhaUAAjR7M?format=jpg&name=4096x4096
TDM
https://pbs.twimg.com/media/Glvjsi3a4AA1fo_?format=jpg&name=4096x4096
UH-60P can also be substituted for JMSDF & JASDF UH-60J
APMM
https://pbs.twimg.com/media/Gm30ifhbYAAjlr4.jpg
i have made mine for TUDM years ago, maybe i will revisit those later
On malaysian GDP
2024 GDP is about USD427 billion
Forecast 2030 GDP is about USD628 billion
So 1.5% of 2024 GDP is about USD6.4 billion (RM28.5 billion)
1.5% of 2030 forecast GDP is about USD9.42 billion (RM42 billion)
But what is the asset procurement DE portion of that?
If 2025 budget of RM21.2 billion (as per graphic) gets RM5.585 billion
https://www.malaysiandefence.com/wp-content/uploads/2024/10/GaO_ecvaUAAcWGh.jpg
That is 26.3% of defence budget allocated for asset procurement DE
Using that percentage, the asset procurement DE in 2030 budget if it is 1.5% of GDP would be USD2.47 billion (RM11 billion). That is double the asset procurement DE allocated in 2025 budget.
That is, if, a very big if, the defence budget is increased to 1.5% of GDP, and our GDP in 2030 is to be USD628 billion as projected.
- "105mm towed howitzer (IMO not a priority but seems TDM thinks it is)
For the simple reason that some of the Model 56s are falling apart.
... -" Coastal Anti Ship Missile Batteries (this is my personal opinion"
The RMN had the UASs and sensors at sea to work alongside the missiles, the army doesn't.
... - "MERAD ?? (i prefer GAPU to take this up"
I'm all for jointness but in this case the RMAF should have the capability as GAPU which has other commitments can't be expected to always be there when needed.
... - " Kuwaiti Hornets. How much we have to pay, if any"
Not trying to "hinder" or speak on "behalf" in case you come up with twaddle again but to me far more pertinent questions is how much will they cost to operate and how much will costs rise as they get older and will we invest in the needed ground support gear and ordnance or will we do things on the cheap again? Lastly, as of March 2025 is there still any serious intent on pursuing this option?
" March 2025 is there still any serious intent on pursuing this option? "
It is not just pursuing, it is almost a done deal.
https://www.bharian.com.my/berita/nasional/2025/02/1356223/pembelian-30-jet-pejuang-terpakai-kuwait-dimuktamad-tahun-ini
One of the request from Kuwait Air Force themselves to TUDM under this deal is for TUDM to do fighter pilot training for KAF new aircrews. A reason why i think we need extra FA/TA-50 airframes for FLIT in addition to training with the Hornets themselves.
" For the simple reason that some of the Model 56s are falling apart "
recently as part of the LG-1 contract, the contractor went around to find all operational L5 pack howitzers and serviced them. In all they found that there are 127 units of serviceable Oto melara model 56 L5 pack howitzers in the inventory of RAD. That is more than what is listed in most open sources (100)
Just because the budget increases doesn't mean one can get better or more things. How one go about the policy of spending those money are far more important.
Just look at the Canadian. They spend almost as much as the Italian but they got no carrier, no f35 yet, and got lot less of almost everything else even number of troops.
Another example is RSN ships. for industrial purposes they reinvented the wheel so to speak and build a custom variant of an existing ship. Custom variant of existing item as we seem with hunter Vs city class would cost 100-200% more.
Secondly because they have a need to be able to work alongside with a 1st rate military in a highly undeniable situation they need extreme qualitative advantage and that means expensive ship like Lafayette or Visby. Which usually are 100% more then the equivalent from SK or turkeye.
Basically let say a Lafayette off the shelf cost myr2 bil, a custom build one would cost between MYR 4 to 6 billions. But if one doesn't need extreme qualitative advantage or industrial manpower training scheme then one can go for an off the shelf Istanbul or HDC 3200 for a bit over MYR 1 billions.
Basically one can get 4-6 ship for the price of 1 if they willing to sacrifice around 10-20 ISH % of qualitative advantage and some levels of industrial capabilities & self sufficiency.
And it doesn't just end with ship, a wildcats,anka & atak for example is around 1/2 to 1/3 the price of Seahawks, reapers and Apache.
Another way to make you limited dollars goes further is leasing and loan. One for example can stay in their parents basement for 10 years to have enough money for a house or they can just move out today by getting himself a 15 years 5% interest housing loan. Similarly one can wait 10 years to get a global eye or wedge tail or they can just pay $25 to $50 million annually and get it tomorrow.