2016 Budget: Defence and National Security

A CGI of the LCS, a 3100 tonne Gowind frigate.

SHAH ALAM: IN my preview of the 2016 budget, I predicted that the Armed Forces will get a very big hit. However, it proved to be a softer blow instead as the allocation for next year was only reduced by some RM400 million.

For 2016, the government has allocated RM17.3 billion for the Armed Forces compared to RM17.7 billion, the amount actually spent this year. The Operating Expenditure (OE) for 2016 is RM13.4 billion, a reduction of some RM700 million from 2015 (RM14.1 billion). The Development Expenditure (DE) is RM3.847 billion, an increase of RM229 million compared to last year allocation of RM3.618 billion.

RMAF A400M M54-01 landing at Subang airport after performing a flypast on Merdeka Day
RMAF A400M M54-01 landing at Subang airport after performing a flypast on Merdeka Day

However I was not wrong about the assets to be procured for the year. Prime Minister Datuk Seri Najib Tun Razak in his budget speech presentation stated that among the items to be procured are “the Littoral Combat Ship, A400M, armoured personnel carriers and the VSHORAD system.

One of the first production model Gempita, fitted with the 25mm Bushmaster turret.
One of the first production model Gempita, fitted with the 25mm Bushmaster turret.

The APCs are obviously the Gempita and the AV4 while the VSHORAD is of course the Thales Starstreak system signed earlier this year.

Thales ForceShield. Thales.
Thales ForceShield. Thales.

Najib said the Armed Forces will also get the latest unmanned airborne system for ISR duties. Industry sources had told Malaysian Defence that the UAS being looked were either more Scaneagles (already operating in ESSCOM) or a new medium range UAV to be locally made or assembled. Apart from this some RM523 million will be allocated to build a new camp for the Army at Felda Sahabat, in Lahad Datu.

Deftech AV4 for PDRM. The version for PDRM is shorter than the Army ones.
Deftech AV4 for PDRM. The version for PDRM is shorter than the Army ones.

Najib said the government will also allocate RM864 million to the Malaysian Maritime Enforcement Agency (MMEA) for the procurement of Offshore Patrol Vessels (OPV) and patrol boats. This latest allocation will be a boon for MMEA which had long been hobbled by operating among the oldest patrol vessels in the region.

Whether the OPV will be the same one as shown during LIMA 15 is beyond me at the moment.

A model of the Amazon class at the Radimax booth
A model of the Amazon OPV class at the Radimax booth

For internal security and public safety, some RM13.1 billion has been allocated. Among others 500 patrol cars and 500 motorcycles worth RM35 million will be procured. In the meantime, ESSCOM will be allocated some RM26 million for procurement in 2016.

Take note that the overall allocation for the security sector for 2016 is RM31.2 billion. The OE allocation is RM26.9 billion (RM13.457 billion for defence and RM13.447 billion for internal security). The DE expenditure is RM5.196 billion (RM4.295 billion for defence and RM901 million for internal security). The higher figure for defence DE is not explained though it may well include the allocation for MMEA, ESSCOM and MKN which come under the Prime Minister’s Department.

The overall 2016 budget calls for an allocation of RM267.224 billion.

— Malaysian Defence

If you like this post, buy me an espresso. Paypal Payment

About Marhalim Abas 2205 Articles
Shah Alam


  1. Is the OPV stated for MMEA different from the NGPC that are propose for them previously?

    Obviously its different from the NGPC.

  2. Any news about Police Air Wing helicopters? Other than the AW139s, will there be any other types that will be procured?

    Yes the talk is they are getting the H135s. When is another issue.

  3. it will be end of the MiG…
    the budget is just for what ATM had order and not the one the plan to have it…
    look forward what MMEA will get

  4. Reply
    Obviously its different from the NGPC.

    Noted..any progress on the NGPC so far?

    I am trying to be very hard to get updates..

  5. “..RM13.457 billion for defence and RM13.447 billion for internal security…”

    I find it very hard to comprehend the rational for this kind of numbers. The internal security sector which to a large extend comprise of the police need almost as much allocation as defense. They neither operate nor maintain such heavy weapon system like tanks, fighter jets and submarines. It the west the different is way bigger.

    The figure above is the Operational Expenditure which pays for the salary and operations. The Home Ministry employs more people than the Armed Forces, they also operate more stuff from prisons to immigration check points.

  6. PM did not mention “pesawat rondaan maritim”. Have to wait if this have been “killed”.

    The funding announced is for the next 12 months. He did not announced about the VSHORADs but it happened.

  7. That allocation for Mmea opv equates to about usd 200million.

    Cheap opv’s such as Chinese p18n opv (similar to thai navy opv) costs around Usd 60 million each. Something built in korea should also cost around that. Actually any commercial spec ship around 60-100m in length with good seakeeping and maybe a 30mm rcws should be good enough for offshore patrols.

  8. Lower oe by 700 mil? Hmm could mean MIGs are off plus few more older assets may also be retired

  9. Don’t be too happy about the development budget.

    It is common in Malaysia for projects to exceed budget and require extra allocation.

    If this time extra allocation is not forthcoming, you can expect cuts in project specs or numbers.

  10. Do you have the breakdown for each expenditure according to 3 services (army, navy & air force)


  11. I think defence projects cost overblown is not just limited to Malaysia.Even the first australian air warfare dedyroyer already overblown by aud870 mil. Is just that they are more open about it

    More importantly they have more money..

  12. I don’t know about you guys, but everytime I look at photos of RMN’s new LCS, I keep wondering why they will be fitted with a 57mm instead of a 76mm gun and for the same price, maybe we could have had 8 to 10 vessels instead of 6.

    Sorry just my 5 cents thinking

  13. IMO Mindef has made a mistake by procuring the VSHORAD system which has a maximun ground to air range of only 4-8 km.VSHORAD is good for the Army in the field where you need point mobile defence.But for Navy and Airforce base installations protection, they are ineffective.You need at least Medium Range ground to air capability to protect strategic Navy and AirForce installations.As fas as I am aware no other Armed Forces uses VSHORAD system to protect their strategic installations.So the decision to procure VSHORAD STARSTREAK for Navy and Airforce is a curious one.A real pity because the reported budget of RM900 million plus to purchase VSHORAD Starstreak could have been used to really upgrade our ground to air defence syatem to a credible and respectable level.For the amount of money to be spent, we can get much more superior ground to air defence systems for the Navy and AirForce.

  14. Hmm… what i know now is this new deftech AV4 MRAP will be use for ESSCOM but not for UNIFIL to replace the ageing Condor and Rheinmettal 4×4. How dissapointed………

  15. Kamal,

    There is open bipartisan debate on defence matters in Australia; unlike in Malaysia.

    Other Australian defence programmes that faced delays and other issues included the programme to modify/covert the RAN’s Newports and the Seasprites (this was abandoned).

Leave a Reply

Your email address will not be published.