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Show Me The Money

Korean Aerospace Industries FA-50PH. KAI

SHAH ALAM: Show me the money. With the world economy teetering with recession (some say its already in recession) and with the Malaysian economy with it, one may assume its not going to be smooth sailing for the national security sector.

Bernama is reporting that the government is already taking measure to reduce public spending. The Malay Mail posted the report datelined Kota Bharu which stated:

KOTA BARU, July 17 — The government is taking measures to save public expenditure by postponing or not continuing any project that has yet to commence, to enable money to be channelled for the welfare of the people, apart from efforts toward the country’s economic recovery.

Minister in the Prime Minister’s Department (Economy), Datuk Seri Mustapa Mohamed, said that the move was in response to a directive issued via the Malaysia Treasury Circular — Guidelines on Public Expenditure Savings.

“I have held meetings with the Public Works Department (PWD) and the Implementation Coordination Unit (ICU) on the financial position, to see the projects that have yet to commence.

“Hence, if it (project) is just about to start, there is no need to continue, while if something has already started, we will discuss which developments we need, either to defer or cancel,” he said.

PAL Aerospace/De Havilland Dash 8 400 P-4 MPA. PAL Aerospace.

Although the report did not specifically stated the national security sector, it is obvious from past experiences – 1997 and 2008 economic crisis – the sector will take a hit. It is for this reason, it is likely that procurement for completely new capabilities – the MPA and MALE UAS – may well be the ones that will be deferred. As the FLIT/LCA project is basically a replacement for a capability that need replacement it may well survived the austerity drive. But the numbers may well be lower than initially expected.
A close up of LCS 1 Maharaja Lela at the BNS yard in Lumut taken in 2018.

As for the LCS project, it also may survive the austerity drive as shutting it down again will have a tremendous impact on the local vendors. It is likely though the project may well be extended well beyond 2030.
FNSS Pars 4X4 equipped with a RWS with anti-tank missiles displayed at DSA 2022. EL/SC

Other projects like the LMS Batch II and the 4X4/6X6 are also likely the ones to be deferred.

— Malaysian Defence

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Marhalim Abas: Shah Alam

View Comments (18)

  • Guess this is what happens when national defence is still stuck in the capability building phase. While its reasonable defence spending is cut during a crisis, it has to be noted, it has been cut or kept low even when the economy is growing. So is LCS still a worthwhile investment? On the LCA, given the government has a tendency to stop buying after the initial purchase, whatever numbers purchase in Phase 1 will likely be all that is available for the next 30 years. Perhaps we need the same situation faced by the Philippines - where a major external threat has been defined - to fix the problem. Singapore justifies its high defence spending by saying they are a small red dot surrounded by volatile and unstable regimes.

    • They put up a whole White Paper on defence in 2019 but failed to justify higher spending. So any further development is futile

  • What I heard from Def. Gov official
    LCS - continue at slower pace
    MPA - cancel or delayed to next RMK
    UAV - to proceed
    LMS - planning stage - next RMK
    LCA - cheaper plane or reduction in number of planes planned. min. 6 or 8, or less. Tejas now under higher consideration together with Turkish. FA 50 lowest priority. Political decision.
    Bases - to proceed (renovation, refurbishment)
    Other smaller procurements - to scrutinize. Delay if possible.

    Malaysia government no money so have to take such drastic actions.

  • We defer the already defered. When good times come, the politicians tend to forget. So we have an armed forces not capable of soing much except defend against non state actors. That also after they have landed.

  • Not even one has been delivered yet. The last time I checked it was supposed to be this August. Anyhow since the contract has been signed the project cannot be deferred

  • If the LCA program is 6 to 8 planes, its probably a dud program destined to be a waste of tax payers money unless the govt commits to 18 planes but stretch the deliveries. The LCA was meant to replace the Hawks and as a part-replacement of the Mig-29. So 6 to 8 planes means the Hawks will need to fly until their wings fall apart or its engines fall out of the sky. In any case, what we have is - no new ships until 2030 (expecting the LCS to be delayed until 2040), no new jets until 2026 (expecting the government to delay deliveries and payments to the next RMK), no new quarters for soldiers (since government thinks building more MRT that no one rides on is a better spend). Sad indeed.

  • LCS – continue at slower pace
    MPA – cancel or delayed to next RMK
    UAV – to proceed
    LMS – planning stage – next RMK
    LCA – cheaper plane or reduction in number of planes planned. min. 6 or 8, or less. Tejas now under higher consideration together with Turkish. FA 50 lowest priority. Political decision.
    Bases – to proceed (renovation, refurbishment)
    Other smaller procurements – to scrutinize.(Kamal)
    Actually thought the same. LMS and MPA will take a hit. But am somewhat mystified how exactly HAL Tejas and TAI Hurjet will bring down any expenditure knocking down possible FA50 buys.
    Are they actually betting on 'fact' that HAL is famed for its delays or TAI may get into delays in its Hurjet program?
    Or given all that, is Tuk Pa actually all there by asserting these defence purchases are the right ticks to be deferred (indefinitely) as usual? Politicians are dumb, mind my language.

  • No, Tuk Pa didn't say anything about defence. But as I mentioned in the story every time the government says austerity drive, its always the national security sector especially defence that took the greatest hit as buying arms if you are not at war is seen as wasteful. Especially if those arms do not have the national interest quota

  • My take.
    Govt austerity drives are mostly lip service, usually last a year or two. After that if they not gonna spend on Item A they will spend on Item B, but regardless they WILL SPEND IT.

    IMHO infrastructure development and new build works (ie new bases, new buildings, new camps) will not be pared down in fact it might get a boost at the expense of others simply cuz it is an easy political tool as an economy driver, a job creator, something the rakyat could see being useful, and something the endusers want as well.

    Equipment buys would be most affected. Those in progress like LCS, OPV, relifes & rehulls, gs cargo trucks, etc would still go on albeit perhaps with stretched timelines. Those with national interest and significant ICP or offsets would likely survive the cull. Others that mostly will involve buying with lotsa foreign currency will surely be KIV, esp big ticket items ie LCA, Caesar SPG, 4x4/6x6 mix IFV, medium choppers (for all branches), etc would high chance to be deferred until such time or a compromise is made thru leasing rather than outright buy for now (yes, yes critics will say it cost more but it comes from a different pocket and nobody in Parliamen is smart enough to do the maths and go 'Hang on a sec...', so yeah whatever)

  • Not much has changed for us since the olden days of Malacca getting captured in 1511 by the Portuguese. We didn't put much stress on the defense back then either. We're doom.

    "The armed forces of the Malayos do not follow the ordered military tactics of Europe: they only make use of attacks and sallies in mass formation: their sole plan is to construct an ambush in the narrow paths and woods and thickets, and then make an attack with a body of armed men: whenever they draw themselves up for battle, they acquit themselves badly and usually suffer heavy losses... The arms which they ordinarily use in warfare are the sword, shield, lance, bows and arrows, and blow-pipes with poisoned darts. At the present day, in consequence of intercourse with us, they use muskets and ordnance. The sword, a blade measuring 5 palmo (110 cm) in length, is called pedang: like the Turkish sword, it has a single edge. The dagger, called Cris, is a blade measuring 2 palmo (44 cm) in length, and is made of fine steel; it bears a deadly poison; the sheath is of wood, the hilt is of animals' horn or of rare stone... The lance called azagaya is 10 palmo in length (2.2 m): these lances are much used as missiles. There are other lances, as much as 25 palmo (5.5 m) long... Their artillery, as a rule, is not heavy; formerly they used mortars and swivel-guns made of various metals[Note 2]... Regarding the employment of artillery amongst the Malayos, we know that on the conquest of Malacca in the year 1511, Afonso de Albuquerque captured much small artillery, esmerils, falconets, and medium-sized sakers... The fortresses and fortifications of the Malayos were usually structures composed of earth and placed between plank uprights. We do find some buildings made of shaped stones joined together without mortar or pitch... In this simple style were built the principal fortresses and royal palaces... Usually, however, the natives use fortifications and enclosures and palisades made of big timber, of which there is a large quantity along the River Panagim on the same coast... So in olden times their fortresses, besides being made merely of earth, were built in a simple form, without the proper military points."

    — "Description of Malacca" by Godinho de Erédia, 1613.