KLSreview Logo


Defense Development Budget was slashed 50% by Malaysia

KLS:In order to implement "people centric" policy, Malaysia's government slashed defense Development Budget 2009 to 2.3 billion Ringgit, a decrease of 49.8 percent compared to the same period last year.

According to the Budget 2009 released by Ministry of Finance, the Ministry of Defense gets 13.2 billion Ringgit budget in which the Operating Budget is 10.6 billion Ringgit, an increase of 8.2 percent compared to the same period last year. However, the Development Budget not only 49.8 percent less than last year, but also almost 40% less than in previous years.

After the Development Budget was slashed drastically, its overall budget decreased 1.5 billion Ringgit or 10.47 percent. This move, however, is in line with the open speeches which made by high-ranking officials of Ministry of Defense previously that defense budget would be cut by 10%.

Defense budget accounts for 6.6 percent of the total budget in which Ministry of Defense is the fourth largest financed ministry that after the Ministry of Education, Ministry of Higher Education and Ministry of Health accordingly. This tremendous decision is in line with the government's "people centric" policy, that social and economic projects will be given priority.

The Budget 2009 says 10.6 billion Ringgit of Operating Budget will be used in most of the payment of salaries and the rest used in the procurement of uniforms, bullet and ammunition, spare parts, maintenance payments for aircraft, vessels, facilities and equipment.

Most of the Operation Budget will be used in the maintenance of the equipment in which an increase from last year's RM 440,056,800 to RM 891,685,500; followed by service and supply (from RM 5,195,989,400 to RM 5,440,132,200); its third, payment for emolument (from RM 4,134,536,100 to RM 4,247,222,600) respectively.

It is noteworthy that, ratio of Operation and Development budget reaches its peak of imbalance, 2005 is 1.9:1; 2006 is 2.1:1; 2007 is 2.3:1; 2008 is 2.1:1, and 2009 reaches to a serious imbalance 4.5:1!

Meanwhile, the Budget 2009 will eliminate 844 military posts that the total number of civilian and military posts in MINDEF, will drop from 2008's 170,739 people to 169,895 people. The most affected programs are Malaysian contingencies which stationed in overseas to support United Nations' peacekeeping operations.

As for the Development Budget, Navy faces the greatest impact in which its budget for arms procurement decreased significantly from RM 811.12 million to RM 100,000, followed by Army from RM 1,303.87 million fell to RM 136.1 million.

However, Air Force is not affected, in contrast having an increase from RM 1.482 billion to RM 1.613 billion, which believes large amount is to be used to cover the cost of procurement of 18 SU-30MKMs and 12 new type of utility helicopters.

Obviously, there will be no large-scale military procurement projects in 2009, except the authority may launch some programs that without using "real money".

In addition, Malaysia Maritime Enforcement Agency, which is paramilitary forces, gets RM 651 million for Development Budget, while its Operating Budget is RM 314.9 million, that total amount of budget is RM 965.9 million. Compared to last year its expenditure RM 188.64 million, it is nearly 5 times increment.

Editor's note: All information obtained from the Budget 2009; The Exchange rate between USD and Ringgit on October 21, is 1 USD to 3.5255 Ringgit

Chinese Version Click Here