How Important Is Indonesia Buying Fighter Jets Amid Budget Efficiency?

JAKARTA Indonesia has officially bought up 48 units of KAAN advanced fighter jets from Turkey. Is the purchase of this fighter jet needed amidst budget efficiency?

Indonesia has signed a contract to purchase 48 KAAN fifth-generation stealth fighter jets made in Turkey in a strategic agreement worth around US$10 billion or equivalent to Rp163.4 trillion at the IDEAF International Defense Industry Exhibition 2025, Saturday (26/7).

Defense Minister Sjafrie Sjamsoeddin witnessed the signing of an implementation contract between Turkish Aerospace Industries (TAI) and PT Dirgantara Indonesia (PTDI) for the procurement of 48 units of KAAN national fighter aircraft.

Through this contract, Indonesia not only obtains high-tech defense equipment, but also gets great opportunities in developing the capacity of the domestic defense industry. The local industrial base to be formed in Indonesia is expected to be clear evidence of mutually beneficial and friendly partnerships.

The collaboration between Indonesia and Turkey in the defense sector shows the close bilateral relations between the two countries, not only defense diplomacy, but also technology transfer and increased the independence of the national defense industry, said a written statement sent by the Ministry of Defense.

However, the purchase of this fighter jet received the spotlight of economists, considering that it was carried out when Indonesia was in a deficit in the State Revenue and Expenditure Budget (APBN).

"I don't understand, what do you want to pay for? The money (APBN) is almost gone, except to increase debt. But it can trap debt and become a systemic failed country," said Bhima Yudhistira, Executive Director of the Center of Economic and Law Studies (CELIOS).

But on the other hand, military observers reveal that the purchase of these fighter jets is needed because the Pacific situation is experiencing an increase in tension.

The purchase of this fighter aircraft is also not the first time under Prabowo's command. While still serving as Minister of Defense, in 2022 to be precise, Prabowo ordered 42 Rafael fighter jets from France with a contract value of more than IDR 130 trillion and bought a series of other weapons. Last year, Indonesia also bought KF-21 from South Korea.

The procurement of 48 KAAN national fighter jets worth IDR 163.4 trillion is Turkey's largest defense export contract in history, according to Turkiye Today.

But because of this fantastic value, the procurement of KAAN fighter aircraft received the spotlight of CelIOS economist Bhima Yudhistira. The purchase cost of KAAN aircraft is greater than the total LPDP education endowment fund of IDR 154 trillion, or a third of the social protection budget of IDR 504.7 trillion, which targets tens of millions of residents.

This purchase was also made amid calls for budget efficiency by President Prabowo Subianto. In fact, recently, the Ministry of Finance estimated that the 2025 APBN deficit would reach IDR 662 trillion.

"I don't understand, what do you want to pay for? The money (APBN) is almost gone, except to increase debt. But it can trap debt and become a systemic failed country," said Bhima.

He continued, around 25 percent (Rp552 trillion) of tax revenues were exhausted to pay interest on state debt which reached Rp800 trillion. If the purchase with a large budget uses the APBN, Bhima predicts that it will lower the budget allocation post for priority expenditures, such as education and health.

"So the APBN does have almost no room to maneuver, such as buying security defense equipment with a very large budget allocation," Bhima explained.

Another option, said Bhima, is to increase debt. However, Indonesia's obligations until the end of 2024, including debt, have reached IDR 10,269 trillion.

From a military observer's perspective, observers assess that the purchase of KAAN fighter aircraft from Turkey is needed.

The Pacific region is experiencing an increase in tension, both from the dynamics of the South China Sea, America-China rivalry, the possibility of open conflict between the Taiwan Strait and its surroundings, said Khairul Fahmi, a military observer from the Institute for Security and Strategic Studies (ISESS).

"For that, our defense posture must be more adaptive, flexible, and of course more resilient and highly afraid," he added.

Khairul also added that the purchase of KAAN agreed in July 2025 was not carried out in the near future. According to him, KAN mass production will only start in 2028, and this Indonesian contract will last for 10 years.

"That way, this aircraft will not be purchased for today, but KAAN will be the backbone of the Indonesian Air Force in 2030. So this is not a purchase that directly burdens the state budget today, but a long-term investment," said Khairul.

With the condition of budget efficiency, Khairul encouraged the KAAN procurement process to be accelerated. However, he reminded that the government must prepare a payment scheme for 10 years. So that state finances remain safe, but also certainty for the TNI modernization process can be provided.

"In fact, because the budget is limited, we need to make strategic decisions that are of long-term value. KAAN is not paid at once, and is not used today," he explained.

And, most importantly, according to Khairul, supervision and management must be properly monitored. "Don't let us hold it but can't maintain and care for it," said Khairul.