Strategising Malaysian Defence Budgeting During Economic Recessions

Abstract

Economic recessions and financial crises can have a direct impact on a country’s defence
budget and its subsequent defence expenditure. It is about striking a proportion of the country’s
national income for socio-economic development and defence so as not to compromise the
country’s integrity and sovereignty. The aims of this study are: (1) To analyse the defence
budgets and defence expenditures for Malaysia; (2) To analyse the operating and development
expenditures in the defence budget for Malaysia. This study applies a content analysis from the
data compiled including relevant secondary sources for both the aims of this study. The study
reveals that there are defence budget cuts due to economic recessions, the 1997 financial crisis,
2008 recession and the 2014 oil price crisis. Operating expenditures are on the rise as compared
to development expenditures. As such, there is a need for budgetary and financial strategies
astuteness contributing towards the continued sustainment of the Malaysian Armed Forces
(MAF) capabilities and readiness including its longer-term strategic developmental plan to
ensure its development can continue unabated during economic recessions or financial crises.
Additionally, to ensure that the country’s future security and defence needs can be met
objectively.