Indonesian president Susilo Bambang Yudhoyono says his country should strive to have a more powerful military than Australia.

About 16,000 Indonesian troops are preparing for joint military exercises in East Java.

Meeting with military commanders, Mr Yudhoyono told them that Indonesia's military should be bigger and more modern than countries like Australia, Singapore and Malaysia.

Indonesia's military boasts 470,000 active troops, while the Australian Defence Force has just over 80,000 full-time personnel and reservists..

It has also embarked on a military upgrade program, building warships and drones, as well buying fighter jets, helicopters and rockets.