Democratic Governance in Indonesia: Obstacles to Ending the Military’s Off-Budget Funding

The largest Muslim democracy and home to the world’s fourth largest population, Indonesia is vital to the United States, Southeast Asia, and other Muslim nations. Yet nine years after the end of Suharto’s military regime and a remarkably smooth transition to democracy, Indonesia’s military-business complex remains largely intact and civil control of the military remains elusive. Why has so little progress been made in implementing the statutory requirement to transfer all the military’s business activities to the government by 2009? What is a realistic goal for full budget funding of the Indonesian military? What can the U.S. and other friendly countries do to help the Indonesian military become more professional and more effective in defending the country against external and internal threats?

The Brookings Institution and the United States Indonesia Society hosted a panel discussion on Indonesian military reform in connection with the launch of a book, Out of Business and On Budget: The Challenge of Financing the Military in Indonesia. Authored by Lex Rieffel, a Brookings nonresident senior fellow, and Jaleswari Pramodhawardani, a researcher with the Center for Social and Cultural Studies at the Indonesian Institute of Sciences, the book focuses on thirty tough policy issues that will have to be addressed in the process of getting the military out of business and fully funded by the government budget.