The current maritime challenges that Indonesia faced had not led to the development of the navy and air force. While theories of neoclassical realism highlighted the importance of domestic factors when determining responses at the strategic level, inefficiencies within the state bureaucracy had often been the bane of prudent policies. Our article attempts to engage with the neorealist concept of under-balancing to look at the reasons why there is stagnation in Indonesia’s naval and air force development. The proponents of under-balancing blamed inefficient bureaucracy as the cause of the issue. Our study on Indonesia’s naval and air force development indicated that inefficient bureaucracy was not the only driver of under-balancing. Looking at the agenda of naval and air force modernisation, this research argues the lack of commitment from the government, limited economic sources and the different modernisation priorities at the military unit level that had greatly contributed to the mismatch between systemic pressure and the response, in this case through naval and air force development, against it.