25th October 2016 - 10:00by Gordon Arthur in
Hong Kong
The defence budget
announced by Malaysia on 21 October has taken a serious slash compared to a
year earlier. The amount allocated to the Ministry of Defence for 2017 is
MYR15.06 billion (US$3.6 billion), equating to a 13% drop.
The budget has fallen
to 2012 levels, and it represents the largest single cutback since 1998.
Most of the budget is
for emolument or management expenses (MYR11.68 billion), but it also includes a
development expenditure for buying new equipment. The latter has suffered an
MYR440 million reduction to MYR3.37 billion, the new figure representing the
lowest development expenditure since 2014.
Major acquisition programmes will continue, however, including
six Second-Generation Patrol Vessel - Littoral Combat Ships for
the Royal Malaysian Navy, ongoing deliveries of AV8 Gempita 8x8 armoured vehicles and the final A400M transport aircraft.
Defence Minister Hishammuddin Hussein told reporters on 23
October that other projects in addition to the above will not be affected: MD
530G helicopters, refits for Scorpene submarines, and upgrades to C-130, Hawk
and S-61A-4 aircraft.
Interestingly,
operational expenditure has increased 1.68% to RM13.683 billion.
With tensions in
Eastern Sabah remaining high, money and assets continue to be prioritised to
secure the Eastern Sabah Security Zone (ESSZONE). Thus, RM323 million is going
on personnel deployment along the border, which may indicate a proposed ESSCOM
brigade and border regiment have been funded.
A sea base and helicopter forward operating base are being
established. AV8 and AV4 armoured vehicles will deploy to ESSZONE, and
Hawk jets and H225M helicopters will be located at Labuan Air Base.
The Malaysian Army
will receive the largest portion among the three services (RM5.42 billion), but
all services are suffering tighter finances. The air force suffers the most
with a 34% drop, while the navy’s allocation is 25% lower.
With such a squeeze,
question remarks remain over the air force’s long-running Multi-Role Combat
Aircraft (MRCA) programme, with no sign of any order coming soon to replace
degenerating MiG-29s. Some sources speculate that the Rafale and Typhoon are
now the two strongest remaining contenders.
The sharp drop in
military expenditure stems from stiff economic headwinds being faced by
Malaysia, especially with low commodity prices and a plunge in global oil
prices. However, defence seems to have borne a disproportionate hit.
Malaysia’s purchasing
power has not been helped by a 30% depreciation of the ringgit compared to the
US dollar in the past four years.
Malaysia is now
spending 1.2% of its GDP on defence. The Malaysian Maritime Enforcement Agency,
essentially the national coast guard, receives its funding under the Prime
Minister’s Department rather than the defence budget.
Original post:
shephardmedia.com
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