Bridging the Gap: Military Expenditure Imbalances Between Indonesia and Singapore as a Case for ASEAN-Wide Defence Investment
A comparative analysis of defence expenditure patterns and regional security implications in Southeast Asia.
Southeast Asia is a dynamic region actively pursuing economic integration under ASEAN. On average, member states allocate only about 1.96 percent of GDP to military spending, deliberately staying below the 2 percent threshold (Tene, 2023). This reflects ASEAN’s foundational philosophy: reducing mutual threat perceptions, fostering stability, and accelerating regional prosperity.
Among ASEAN members, Singapore and Indonesia represent the region’s two largest defence spenders – yet the disparity between them is striking. Despite Indonesia’s far greater geographic scale, population size, and territorial complexity, it allocates considerably less to defence than the much smaller Singapore. This imbalance raises a broader regional question: what strategic opportunities ASEAN can draw from it.
Military Expenditure of Southeast Asian Countries (2018)
Made with Flourish
Military Expenditure of Southeast Asian Countries (2023)
Source: Sukoco
Why Does Singapore Spend So Much?
Paradoxically, Singapore’s lack of abundant natural and human resources drives its outsized military investment. Constrained by geography and scarcity, Singapore built its economy on trade, investment, and technological innovation. As a critical hub for trans-Asian supply chains, it attracts foreign capital across banking, finance, and industry. Authorities responded by investing heavily in military research and development (RSIS, 2024) and strengthening communication and navigation infrastructure.
Today, Singapore hosts over 170 international shipping groups and serves as a global center for maritime finance, insurance, cybersecurity, shipbroking, and legal services (MOE, 2025). It is one of the world’s leading transshipment ports and the busiest bunkering port globally. Protecting these assets requires a capable, well-funded military. While Singapore cannot produce advanced platforms such as submarines or combat aircraft domestically, it compensates through partnerships, procuring Invincible‑class submarines from Germany and F‑35B Joint Strike Fighters from the United States (MINDEF, 2025). It has also developed a credible domestic defense industry, producing multi‑role combat vessels and armored fighting vehicles. This approach echoes a historical pattern. Lipson (1985) noted that military strength has repeatedly served as a deterrent against hostile takeovers, citing the British Royal Navy. Singapore’s ability to sustain the largest military budget in Southeast Asia, despite its small size, demonstrates effective resource management.
Indonesia’s Military Expenditure Problem
Unlike Singapore, Indonesia does not occupy a strategic maritime chokepoint. Yet governing an archipelago of over 17,000 islands and 270 million people demands significant military investment. Indonesia is aware of intensifying geopolitical pressures across the Asia‑Pacific, but its spending reflects structural imbalances.
Roughly 55 percent of the 2024 defence budget is directed toward management support, with modernization and procurement receiving only around 30 percent (Triantama, 2025; Kementrian Keuangan RI, 2024; Santika, 2024). The new National Armed Forces Law further expands the military’s mandate into civilian domains such as food security (Syawfi, 2025), increasing personnel demands and crowding out capability development.
Source: Kementrian Keuangan Republik Indonesia and Santika
Acquisitions such as French Rafale jets and reported interest in Turkish Kaan, Chinese J‑10, and Russian Su‑35 aircraft are often framed as modernization, but analysts caution against overstating their significance. These purchases reflect fragmented procurement rather than a coherent long‑term strategy (Syawfi, 2025). With personnel expenditure, salaries, allowances, and retirement obligations, already dwarfing allocations for research and development, Indonesia’s military has emphasized size over strategic effectiveness, a challenge that remains unresolved.
Indonesia’s Response: DEFEND ID
In April 2022, Indonesia launched DEFEND ID, a state‑owned defense holding company intended to reduce dependency on imports (Kemenhan RI, 2022). The holding consolidates five enterprises under PT Len Industri: shipbuilder PT PAL, land systems manufacturer PT Pindad, aerospace company PT Dirgantara Indonesia, and explosives specialist PT Dahana. While promising, DEFEND ID’s financial performance remains modest and heavily reliant on state capital injections, suggesting ambition has yet to translate into large‑scale industrial capacity.
Toward an ASEAN-Wide Defense Investment Framework
The Singapore–Indonesia contrast reveals a broader regional opportunity. Narrowing this capability gap requires a coordinated ASEAN initiative to cultivate a favorable investment climate for defense‑related foreign direct investment, particularly in research and development. Such a framework would: Attract foreign capital, accelerate regional defense technology, enable joint production and maintenance of equipment and, harmonize procurement capabilities across member states This sits at the intersection of economic interest and strategic necessity. By leveraging investment logic, ASEAN can achieve what defense budgets alone have struggled to deliver, preparing the region to face an increasingly volatile global order.
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