MAINTAINING THE MALAYSIAN ARMED FORCES AMID FISCAL CONSTRAINTS: OUTSOURCING OF MILITARY SUPPORT FUNCTIONS

Abstract

The need for more modern equipment for MAF and stronger defence capabilities cannot thus be denied. With most of its vital assets had reached obsolescent phase, the capability of MAF in defending national interests and sovereignty is much questionable. Although the government’s decision to increase the 2024 defence budget by RM 2 billion is laudable, the increment is nominal, and defence spending continues to be lower than what the MAF require. Competing priorities for government funding will likely continue to constrain defence spending. Considering the limited budget, the MAF could consider striving for greater efficiency in the utilization of the Operating Expenditure (OE) by outsourcing some of the support activities. Outsourcing of military support functions is not new phenomenon as many countries have devolved such functions to the private sector given the economic benefits, and opportunity for maintaining a leaner and meaner force dedicated only to core combat activities. This paper will thus explore the feasibility of outsourcing MAF support functions to the private sector to maximize the limited annual OE and produce an operationally ready force. This matter should be examined from both economic and military perspectives; the former to determine whether outsourcing offers a cost-effective solution whilst the latter is designed to consider the practicability of relying on the private sector for combat and non-combat activities. This paper also will investigate the problems faced by MAF with its current outsourcing program and will recommend few changes that can be made which may not only improve the outsourcing program but also further spur the nation defence industry.