Malaysian Military Modernisation Poised to Pick up Pace

16 April 2022

Janes expects growth in Malaysia's defence budget to slowly accelerate from 2024 onwards (image : Jane's)

The modernisation of the Malaysian Armed Forces (MAF) seems certain to remain on hold for the near future due to constrained defence spending and political indecision.

These restraints have prompted a renewed push to maximise local involvement in procurements and ensure that bidding for imports, when they do occur, is highly competitive.

This emphasis, which has been highlighted at the Defence Services Asia 2022 (DSA 2022) exhibition in Kuala Lumpur, is linked to achieving cost efficiencies and the country's diversification strategy, the latter of which has also received an impetus from Russia's invasion of Ukraine.

Malaysia's defence budget for 2022 is set at MYR16.14 billion (USD3.8 billion), a nominal 1.8% increase over the original allocation a year earlier.

The 2022 allocation comprises MYR11.10 billion for operations expenses and MYR5.04 billion for development expenses. These represent a year-on-year decline of 2% and an increase of 12%, respectively.

According to Janes Defence Budgets, real-terms growth in Malaysia's total defence budget (once adjusted for inflation) was 1.2% in 2022, falling from 5.3% in 2021, and from a high of 9% in 2020. The government, however, has attempted to protect defence procurement from bearing the brunt of such declines.

Janes analysis of Malaysia's defence budget shows that funding for asset acquisitions has increased from around USD500 million in 2020 to nearly USD1 billion in 2021. In 2022 a further small increase takes spending on assets to almost 27% of the total budget, nearly double the proportion in 2020.

(Jane's)