2020 Budget, Defence and Internal Security Sub Sectors

Maharaja Lela was sprayed with sea water as part of the launch gimmick. This was the closest she got to the sea.

SHAH ALAM: 2020 Budget, Defence and Internal Security Sub-Sectors. The Defence Ministry has been allocated RM15.6 billion in the 2020 budget, with the Home Ministry getting RM16.9 billion. The allocation for security sector is RM32.5 billion from a total expenditure of RM297 billion. Finance Minister Lim Guan Eng when announcing the Malaysin national budget at Parliament today said the Defence Ministry budget was an increase of RM1.7 billion from RM13.9 billion allocated in 2018.

It must be said when the 2019 budget was announced last year, the figure was RM13.9 billion but it was announced several weeks later that an extra allocation of RM1.45 billion was allocated and this increased the 2019 budget to RM15.376. This means that 2020 budget for Mindef is actually an increase of some RM300 million. Apart from the speech, 2020 budget document also used the original figure announced for Mindef during the 2019 budget.

A screenshot of the Defence Ministry release in 2018 on the increase of its 2019 allocation.

I guess that this is the official line as even Mindef says it gotten an increase of allocation of RM1.67 billion.

The Defence Ministry posted this graphic on its Twitter page.

I reported the increase in allocation in my updated 2019 budget post.

Defence Ministry graphic on the 2020 budget allocation.

The Operational Expenditure for the Defence Ministry is RM12.5 billion while the Development Expenditure is RM3.1 billion. The DE allocation is actually lower than figure originally announced last year which was RM3.6 billion.

LCS PCU. Maharaja Lela. Her name could be seen on the stern.

From the budget document, it appears that the navy will received the biggest DE allocation, RM945 million for equipment and RM27 million for infrastructure. The Army is getting RM746 million for equipment and RM113 million for infrastruture and air force, RM383 million, equipment and RM17.5 million for infrastructure. For the tri-service or Joint Force command, its RM485 million for equipment and RM48 million for infrastructure works.

Marine police special operators during a training mission.

As for the Home Ministry, this was the second time that its budget had passed the Defence Ministry. This is not surprising as since last year, the Malaysian Maritime Enforcement Agency (MMEA) was moved to the Home Ministry. For 2020, the Home Ministry is getting an OE of RM13.8 billion and a DE of RM3.088 billion. The OE is an increase of RM1.24 billion compared to last year figure of RM12.565 while the DE see an increase of some RM100 million or so.

MMEA OPV

The first MMEA OPV undergoing final assembly at THHE yard at Pulau Indah, Port Klang.

As for the police, it is getting a DE allocation of RM1.67 billion, a marginal increase from last year while the MMEA’s DE allocation is RM414 million, a decrease of some RM30 million from 2019. Note they are other agencies under the Home Ministry from immigration to the prisons department which also received funds from the budget allocation.

–Malaysian Defence

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33 Comments

  1. Aii, 300mil increase or 1.7bil increase? I’m “confused” and I think Malaysian Defence line on the increase is more accurate. Maybe in weeks to come there will be another “extra alloc” ?

    Reply
    Its wayang kulit lah, no idea how they going to redo it

  2. Seems like the RM300mil is to cover the cost increases and inflation. Do we know how much percentage of the defence budget vs the overall budget?

  3. @nimitz
    Just their usual back-slapping, self-praising each other. Once you see past it, its all just a wayang.

  4. It is official MY defence budget is on par with the philippine.
    It will affect degree of readiness as we have seen in sukhoi MKM.

  5. For the home ministry, there is a substantial increase as this year the budget was RM15.62 billion compared to next year budget of RM16.9 billion.

    Marhalim, do you have a breakdown on that? What is the allocated DE budget for APMM out of the RM16.9 billion?

  6. Something does not tally about the home ministry DE.

    RM1.67 billion plus RM414 million does not add up to RM3 billion…

    Anyway the amount for APMM is still around USD100 million that i calculated to be needed anually for my APMM plan. If the amount is maintained for 10 more years, yes it is possible for 20 large OPVs in APMM fleet.

    Cant wait for the DWP next.

    Reply
    Of course it does not tally up to the DE allocation, there are other agencies under the Home Ministry.

  7. Romeo & Joe, kinda agree. This budget is adjusted for inflation 🙂 and the percentage share for defence spending is shockingly similar to the Philippines, at between 1.1-1.2% of GDP. We’ll, not much we can do unless we go down the China Route. Perhaps we’ll be seeing JF17s instead of FA50s/Hornets streaking across our Langkawi skies come the next LIMA! Hahaha…

  8. Philipines is different. There’s merit in being deemed poor. You get all sorts of aid, Inc military aid and grants which are not available to us. Their FA50 was long in coming too .. .

    Reply
    Not really we can and has always received aid and military grants. However some to think getting old equipment as being a dumping ground thats why we dont accept most of the stuff when it is offered. Of course we must be smart not to accept just anything.

  9. @ taib

    However different our predicament to the philippines the fact is, our defence budget is the same as theirs for 2020.

    No harm at all in getting the FA-50 for TUDM. A good aircraft in its class while being designed from ground up to be both an advanced trainer and light fighter. Thailand, which has one of the highest defence budget in asean also buying them.

    @ marhalim

    After the skyhawks have not accepted many used military equipments. The 3rd batch of hercules and the laksamanas are technically “white tails” build but not taken up by others.

    What we got used after that
    – vehicles from UK for bosnia
    – newport class LST (which was a maintenance hog even for a navy like australia)
    – The training sub Ouessant
    – ex JCG OPVs for APMM

    Some of what we missed or declined
    – MB339CB from new zealand
    – 2nd Newport class LST which was already allocated for malaysia
    – LPD ship from USA
    – OHP class frigates from USA
    – Mark V boats from USA
    – Blackhawk helicopters from Brunei
    – M109 SPH howitzers from USA

    Reply
    The Japanese P-3Cs

    The Nakhoda Ragam corvettes (white tails)

    The River class patrol boats

  10. @ marhalim

    Ah forgot to type about the nakoda ragam and P3s. Distracted while typing that.

    We are offered the river class? Which one? Those that went to brazil? Or the current still in use by royal navy?

    Other than buying used military euipments, we should also be more active in selling them. Rather than going to waste, we should actively plan to sell those equipment that we will replace. Having a system something like EDA or even UK and Australian MOD would be great.

    Reply
    The ones UK are putting back into service. When the RMN declined it was then offered to the MMEA but they could not get the funding. It must be noted that some of the offers even from the US or Japan were made to the services directly first, if they said yes, only then an official offer was made to the government. This was the case with the Japanese P-3C offer, it was made to the RMN, when it accepted, the Japan embassy offered it to the government via the Defence Ministry. That is why some offers were not publicly known.

  11. Philippine has underdevelop forces. They dont have decent jets, ships and armour vehicle. They dont have to spend much on operational and maintenance. They can buy some assets. While MY has different story, the budget is lower then needed even for maintenance/upgrade and operational. Armour vehicles, C-130s, ciksu etc…are in need to be upgraded/maintained.

    MY defence budget at least 3% of GDP, defence budget at 1.2% of GDP is too low. MY can not follow indonesian budget style that only 0.8% of GDP because their GDP 3X of MY

  12. When people say our defence budget is same as philippines, we really need to look past face value tbh. We got the same but we already had more less modernize our force since the 90s. Sure the modernization process has been slow for the past 5 years but we’re still in the middle of accepting more new equipments while retiring the old ones. There are gaps in capability (SPH, AEW and medium ranged air defence) but overall our forces are in pretty good shape.

    Phillippines, meanwhile, is doing a hastened, somewhat haphazard effort in modernization with the same amount of money. We only started seeing some semblance of modernization effort during the latter half of aquino jr. administration going into current du30 administration. We’re seeing a bunch of used M113s (surplus stocks from the US) being obtained and hurried into action, polish-made sokol helicopter (which was bought because othey could only afford AW109 otherwise), indonesian-made N219 aircraft (roughly the same class as out old caribou), among other things. So for an annual budget ours arent that bad all things considered.

    Still, the nakhoda ragam and even OHP is a missed opportunity imo. I guess the navy didn’t even want to deal with its gas turbine and diesel conversion would be too costly but then again, we would’ve got the biggest, most heavily armed ship in our fleet

  13. @ romeo

    We cannot have 3% of our gdp on defence. People will be outraged. Other stuff would need to be cut. Increase to about 1.5-1.8% would be okay IMO.

    What we need is not so much on seeing what do we get next year for every year, but a long term commitment of Development Expenditure (DE) budget from the government. If the government could commit say at least USD5 billion per rancangan malaysia for the next 3 rancangan malaysias for DE then the services could have a more visible and longer term planning, rather than having to ask and justify for its budget every single year.

    @ dundun

    The philipines are having quite a detailed DE plan called the horizon in 3 phases. The current Horizon 2 from 2018-2022 has a budget of USD5.6 billion. Yhis amount is split into $890 million for the Army, $1.44 billion for the Navy and $2.61 billion for the Air Force, with the rest of the budget going to the militarys General Headquarters and the government’s arsenal.

    Of course not all was able to be implemented but so far they are increasing their capability in leaps and bounds.

    Some stuff they are getting
    – used M113s but with upgrades by elbit to include unmanned 30mm turrets.
    – 12 brand new blackhawks
    – 6 brand new super tucanos
    – 155mm howitzers from israel
    – complete integrated UAV systems, including MALE uavs and 1000 small uavs.
    – 2 LPD SSV plus 2 more in future
    – 8 brand new AAV-7
    – 12 FA-50 LCA
    – 2 ASW frigate plus 2 more in future
    – 2 ASW helicopter wildcat
    – 1 used ASW corvette plus 2 more in future

  14. @romeo
    Agreed with you, we should have a yearly fixed percentage defence budget. Should not be compared with PH as their equipment are less advanced (thus less maint costly) at the moment. They are likely spending more of the pie on buying new hardware than we do.

  15. @…
    “government could commit say at least USD5 billion per rancangan malaysia for the next 3 rancangan malaysias for DE”
    No government could do that and accurately predict the next 15 years unless the said country economy is chugging along smoothly and no external economical threats, or unless part of the economy relied on defence industry. Neither of which applies to our country. Realistically, they need to have an overall plan (like TLDM 15to5) and fit their allocated budget during each RMK into this overall plan.

  16. >leaps and bounds

    Sure it looks like when the capability is nonexistent in the first place. At one point phil af is practically a helicopter force before FA50 came in. Same goes to the frigate.

    The point is to look beyond the figure.

  17. @ joe

    ” No government could do that ”

    Yeah, tell that to the philippine govenment.
    http://en.wikipedia.org/wiki/AFP_Modernization_Act

    @ dundun

    Right now we are talking about capability development. When our budgets are the same, it is not hard to compare is it? I know that their baseline is like practically zero for most of the capabilities. But look at what they are getting. They are getting multitudes of UAVs, they are buying ASW helicopters. They are getting FA-50s.

    Anyway what do you want me too look beyond the figure anyway? We are trying to discuss what positives we can learn from other countries and implement them for our own defence.

    What I am trying to say is that we can learn from the philippines, that buying something that is 80% of capability is still something rather than waiting forever to get your dream weapons.

    For example, rather than steadfastly requesting for MRCA when the required budget is not there, it is better to recapitalize our hawks, MB339 and MiGs first with the LCA/LIFT program. The airforce is on the right track IMO to have the LCA/LIFT requirement in the 1st place. What is needed now is not to have the program hijacked by political agendas, such as pushing the russian aircraft for the requirement. My personal opinion is that the FA/TA-50 is the best aircraft for the requirement, as it is designed with advanced training and light fighter duties in mind, and it has the required supersonic performance to take up the QRA duties previously shouldered by the MiGs.

    Reply
    Don’t fret, you will get the LCA in the next RMK though I am not certain what aircraft will be selected.

  18. Off topic

    KF-X mockup unveiled. As can be seen it is at best something on par with the super hornet on stealth matters (yes many people does not realise super hornet has build in stealth features). Waiting to see the final cost of this, surely must be cheaper than the F-35. Knowing the koreans, meeting the deadline on time is just not good enough and this will surely be flying in a few years time. Our neighbour did a good call to jointly develop this, even if they are behind in the payment of R&D costs (which clearly shows developing own fighters does not cost peanuts and living in dreamland). If they who have significantly larger defence budget than us struggle to pay for the KF-X partial development, how on earth we can afford to independently develop a next gen fighter?

    http://pbs.twimg.com/media/EGzx8Y6X4AUXipX?format=jpg&name=large

  19. @…
    I wouldn’t put Philippines as the paragon of consistency. They change policies as they change governments & presidents. Even their presidents can easily change tack (case in point: Duterte’s closeness with China after antagonising them).

    That being said, their economy are more insular as compared to us, or at least they don’t suffer hugely from cyclic economic downturns as we do. Can they keep to their mandated budget for the next decades? We shall see… they certainly have a higher chance than we do.

    One country that could probably stick to their decades long plan would be SG. They have the resources, and political stability to drive towards that. But they, more than us, are susceptible to economic issues plus their citizen growing discontent to NS and military defence matters.

    For our case, we cannot commit to a fix sum but what’s budgeted should tied to a comfortable fixed percentage of GDP (say 2-3%). In that way, if our economy shrinks, our defence budget shrinks as well and our guys will have to make the best of it.

  20. @ joe

    Whatever it is, they put that in stone by putting its long term defence plan in a parliamentary act. Are we incapable of doing something similar?

  21. We also declined an ex USN Perry. ex Saudi FH-70s and a pair of ex RN Oberons included in the 1988 MOU with Britain. Had we accepted an offer from Kockums in the 1990’s ; a pair of newly built boats would have come with a pre owned one for training – the deal was cancelled and Lekius ordered instead.

    As for selling pre owned stuff; maybe not recently but in the past : Heralds, Tebuans, HKs, SLRs and various RMN ships (non combatants) including KD Sotong. The problem with us selling stuff is that a lot of retired stuff are simply too worn out or uneconomical to maintain for a new owner: i.e. the Saktis and Laksamanas. Early 2000’s we did look at selling some 81mms that were intended but never issued to the PFF.

  22. @ azlan

    ” The problem with us selling stuff is that a lot of retired stuff are simply too worn out or uneconomical to maintain for a new owner ”

    That is why we need a holistic approach to our defence materials. Why I keep on asking for a retirement date for our equipments, so that a long term plan that could include selling them on could be initiated. Why IMO we should put retirement dates for something like lekius and kasturis, so we could sell them off in the future.

  23. @…
    What I do know, the current administration can do UTurns on policies already in Parlimen, even the ones they enacted, so putting it into law still don’t set it in stone.

    Security & defence spending is a very prickly issue, give more or the same and joe public plus opposition will barrage with questions on the necessity (esp if economy is getting worse), give less and they likely lose their voter bank from the servicemen & women plus their family members.

    Reply
    Politicians are all the same

  24. @…
    I agree with you. Indonesia has made a good call on KFX. So far they have made a good decision on defence cooperation and production. Anoa, Harimau medium tank, Makassar class LPD and CBG submarine are some of their successful stories.

    By looking at it, KFX is designed as 5 gen fighter although at present it still a 4.5 gen fighter. No need to challenge F-35/F22. On paper KFX already better than other 4++ gen. On paper With RCS 0.5m2, it already surpass others 4++ gen fighter.

    After Turkey with their TAI TF-X, now india also racing for their 5 gen fighter.

  25. @ romeo

    That is why, in the larger scheme of things, going gaga now over rafales and typhoons is not the best thing to do, and it is better for us for now to spend our money on LCA/LIFT first.

    In a few more years (2021) we would see the KF-X flying. By the end of next decade quite a few of southeast asian countries would have these aircraft in their inventory, the KF-X, F-35 and Su-57. There would be no difference in capability against these stealthy fighters if we buy typhoon or rafale compared to just hanging on to our MKM and hornets. Better to wait out and have the option to buy the next generation of fighters in the class of KF-X.

  26. Breakdown of OE for ministry of defence.

    Army rm5.7 billion
    Navy rm2 billion
    Airforce rm2.5 billion
    Joint command rm1.4 billion

  27. …. – Why I keep on asking for a retirement date for our equipments, so that a long term plan that could include selling them on could be initiated“

    Yes. As I keep saying; it all depends on the government giving the armed services a realistic timeline and keeping to it. What we should do and what we are forced to do are profoundly different; as long as there are no firm guarantees/commitments from the government.

  28. It is sad to see that the overpriced LCS at usd466 millions will not be ready anytime soon. This is a critical asset for national security. BHIC had been playing the gov all the way from the start. The fake launching & keel laying for 3rd & 4th unit when there are not a single unit was delivered when the gov already paid RM6 BILLIONS!!!!! I think Macc gonna pay Bhic a visit soon.Cutting the steel so that the gov cannot cancel the orders. So now we know why there was a yellow balloon on deck during the launch. To distract attentions lol. No propeller too. If we look inside maybe the engine too was not installed. America new freedom lcs only cost usd387 millions. Can we consider that BHIC is robbing the nation in broad daylight & go scot free. Bad bad bad.

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