The Defence Budget 2000. Summary

linkdoc006005-990225#doc

English summary of White Paper No. 1 (1999-00) to the Storting

October 4, 1999

1. Headline figures:

* Under «Budget 1999» those chapters that are discontinued in 2000 have been excluded
** The figure for 1999 is the first quarter only, while the 2000 figure covers the whole year

2. Minister of Defence Eldbjørg Løwer: "Defence in a new millennium"

On the threshold of a new millennium it is natural to pause and reflect on what has been achieved and what still needs to be done. There are some facts that we simply cannot avoid facing: As we approach the year 2000, we in the Defence Establishment have to carry with us a burden that includes high running costs and a shortfall in investment. In relation to White Paper No. 22 (1997-98) to the Storting, the Long-Term Report on the Armed Forces for the period 1999-2002, overall defence funding is already NOK 180 million below the level of the Long-Term Report resource assumptions. The shortfall is only 0.4%. What is more worrying is that running costs over this period have not been reduced but rather have increased, so eating into the funds that should have been available for investment. For the period 1999-2000, these operating expenses have increased by NOK 474 million compared with the forecast while investment has fallen short of the forecast by NOK 654 million. The request of the Storting to bring forward the start of the MTB procurement programme, increased emphasis on tasks associated with international peace support operations and the continuing pressure on the operating budget make it increasingly difficult to follow the investment plans set out in White Paper No. 23 (1998-99) to the Storting.

In addition to this, our defence organisation is generally too big and top-heavy. The process of restructuring is going too slowly. For this both the Storting and the Defence Establishment itself cannot afford to close eyes to these questions any longer. It is also important not to let local policy concerns not govern the development of our defence. In cases where defence policy and district policy may not be combined in a sensible manner, the needs of our defence must take priority. Without broad political support for real cost-saving measures, and without greater determination in defence circles to carry through the planned restructuring, operating costs will continue to develop adversely. NATO’s reduced contributions towards infrastructure and equipment costs, as well as our «double imbalance» between the funding of the Armed Forces and the tasks assigned to them, and between operating costs and investment, call for the urgent reassessment of priorities.

I would like to evaluate anew the Armed Forces’ investment profile. The departments and agencies concerned with materiel administration, which together employ around 7,000 people, clearly offer some potential savings. The principle of universal military service must stand but higher priority must be given to more flexible and cost-effective training for our service personnel. These are some of the challenges with which we need to come to grips without delay.

A new millennium means Armed Forces that are attuned to the new challenges we face. The East-West block structure of the Cold War has been replaced by a situation involving a series of local and regional conflicts. This affects our security and is facing the world community with new challenges. We must strengthen our capability to participate in international peace support operations in concert with our allies and others, but this requires soldiers who are better trained and equipped.

I look forward to an open debate about the further development of the Armed Forces. A Defence Policy Committee (DPC) set up by the Government and the Defence Study of the Chief of Defence will address a number of questions of defence policy. In the light of developments in the wider security situation, DPC and the Defence Study will produce proposals for our future defence priorities.

The goal is a credible defence capability maintained at a level which is realistic in relation to the funding available and which is capable of performing in a flexible manner all the tasks entrusted to it. My wish is that the Armed Forces stay well rooted in society, that it maintains supported by our country’s inhabitants, and that it function as the security element it is intended to be. Our Armed Forces shall also in the future be made up of women and men who are proud of the professional choice they made!

Minister of Defence

Eldbjørg Løwer

3. Main aims and priorities 2000

The Government budget proposals for defence are based on overall funding of NOK 24,670 million of which NOK 17,051 million is allocated to operating costs and NOK 7,619 million to investment. When adjusted to take account of changes in pay and prices, this represents a real reduction in real terms of NOK 130.5 million compared with 1999.

As for all other sectors of society, the Defence must adapt its activities to a neutral budget level, in order to avoid an increase in the total demands for goods and services.

White Paper No. 22 (1997-98) to the Storting, the Long-Term Report on the Armed Forces for the period 1999-2002 (LTR), proposed a slight annual increase in operating costs for the Armed Forces over the period 1999-2000 (0.5% /NOK 120 million per year) with a corresponding decrease in investment. There was thus to be no overall change in defence funding in real terms. For the years 1999-2000 taken overall, the budget proposal entails a reduction of NOK 180 million, i.e. –0,4%, compared with the LTR. This reduction is made up of an increase in operating costs of NOK 474 million and a reduction of NOK 654 in the overall allocation for investment relative to the LTR assumptions.With regard to this trend, the Government wishes to take steps, first to stabilise and then to reduce defence operating costs.

Outside the budget framework, the sum of NOK 860 million has been earmarked for international peace support operations.

The overall budget allocation is one important factor affecting the feasibility of realising the aims of the Long-Term Report. Another, and very important, element is the way in which operating costs are developing and the total amount involved. It is the Government’s wish that the future development of Norway’s Armed Forces should be in line with the guidelines set out in the Long-Term Report. Considerable emphasis is being placed on first stabilising and then reducing the current level of defence operating costs.

A series of cost-saving measures will be needed in the year 2000. The Government therefore proposes a number of such measures including, for example, taking advantage of current opportunities for reduced initial military service/early demobilisation, increased utilisation of the 6 months period of service and delaying by up to 5 weeks the call-up of an Army contingent. The operating budget is not sufficient to allow all materiel to be properly maintained. NOK 5,747 million is earmarked for investment in materiel in the year 2000. This represents a reduction in real terms of 1.4 percent. In order to keep within the overall cost framework for investment, strict priorities will be required for the implementation of large and important materiel procurement projects including those for new frigates and combat aircraft. The investment budget for 2000 is already under pressure, among other factors, due to slippage in activities originally planned for 1999.

Investment in nationally financed properties, buildings and constructions is to be given priority where future cost savings will result from restructuring measures which require the provision of new buildings. A total of NOK 1,872 million has been earmarked for investment in defence property, buildings and construction work. Compared with the corresponding figure for 1999 this represents an increase in real terms of NOK 230 million, i.e. an increase of 14.3 percent.

Priority will continue to be given to the maritime tasks of the Coast Guard. For the Inner Coast Guard, the Government proposes to maintain the funding at the level already approved by the Storting, but a small reduction in activities will be necessary. The activities of the Search and Rescue (SAR) helicopter service will remain unchanged.

Training and exercise activities in Norway in the year 2000 will continue as in previous years. In order to provide adequately for the security and protection of Norway’s oil and gas installations, and for Norwegian participation in international military operations, an appreciable increase in Norway’s Special Forces is needed. This is under consideration but the intention is to bring about a modest increase in the strength of the Special Forces as early as 1999/2000.

Budget changes in relation to the assumptions in the Long-Term Report*

* Real change

Defence Policy Committee

The Government has set up a Defence Policy Committee. The principal aim of the Committee is to carry out a review of Norwegian defence policy as currently implemented in the light of developments in the international security situation and to propose priorities for the future tasks of the Armed Forces. The Committee is due to present its findings in summer 2000 when the Chief of Defence are also due to complete his current Defence Review. These two reports will provide an important basis for the Government’s work of preparing the next Long-Term Report and will help to establish the premises on which Norway’s future defence will be based.

4. Security policy fundamentalsSecurity policy fundamentals

The security situation in neighbouring regions is generally positive at the present time. Dialogue, cooperation and partnership have, in the various forums, contributed to a strengthening of Norway’s security. Instability in some areas on Europe’s borders and in some countries of the former Soviet Union mean, however, that uncertainty and unpredictability will continue to overshadow the situation as we enter a new millennium.

Any comprehensive attack on Western Europe is improbable for the foreseeable future. The risk of minor conflicts arising in areas on NATO’s borders cannot, however, be excluded. Minor conflicts with the potential to spread could well also have serious consequences of a non-military nature such as large-scale enforced migration, environmental destruction and humanitarian disasters.

NATO’s new strategic concept also lists peace support operations and cooperation with partners as fundamental tasks necessary for the maintenance of security and stability in the Euro-Atlantic region. The traditional core aspects of NATO policy, such as its collective defence capability, transatlantic solidarity and acting as a joint consultation forum, are retained in the new concept. At the same time it is emphasised that NATO’s new tasks relating to crisis management will be based on international law as framed in the UN Treaty, preferably supported by a mandate from either the UN or OSCE.

Norwegian territory and the adjoining areas continue to be of strategic importance in both a European and a broader perspective. Instability, both social and economic, continues to overshadow developments in Russia. This will remain a major focus of attention and will continue to represent a central factor in Norway’s security situation.

Norway is responsible for exercising sovereignty and control over extensive sea areas.

From autumn 2000, as a result of the Schengen Treaty, Norway will be responsible for its external border controls on behalf of all the Schengen countries. The tasks involved will be linked with the Navy’s existing maritime surveillance tasks and the Army’s monitoring of the border with Russia in the North.

Cooperation in defence matters between the Nordic countries is undergoing significant development. It is important for Norway to maintain the dialogue concerning the future evolution of the EU, especially with regard to the development of a European Security and Defence Identity (ESDI).

The NATO summit in Washington in April marked NATO’s 50th anniversary and set out important political markers for the future activities of the Alliance, among others, a new strategic concept. The Czech Republic, Poland and Hungary became members of NATO on 12 March 1999.

Matters of central importance to NATO policy in the future include:

1. International peace support operations and crisis management, including operations outside NATO’s core area
   Such operations are in the main not connected with self-defence in the sense of Article 5 operations and are thus generally referred to as «non-Article 5 operations». International peace support operations can be divided into:
   Conflict prevention operations, military observer missions, peacekeeping operations, peace enforcement operations or humanitarian operations.
2. Implementation of new command structure from the year 2000 -
   NATO will, for example, consist of two strategic commands: The European Command and the Atlantic Command. The European Command (Allied Command Europe) will be divided at the Alps into two Regional Commands with headquarters at Brunssum (Netherlands) and Naples (Italy). NATO will retain a multinational headquarters in Stavanger.
3. Continued priority for Article 5 operations –
   Article 5 of the North Atlantic Treaty, which in turn refers to Article 51 of the UN Charter concerning the right of individual or collective self-defence, allows for operations undertaken in self-defence. Any attack on a NATO country shall be considered an attack against them all, and all NATO countries are obliged to contribute to the self-defence of countries within the Alliance.
4. Partnership cooperation with the countries of Central and Eastern Europe
5. To prevent and oppose the proliferation of weapons of mass destruction
6. Defence Capabilities Initiative (DCI) –
   the overall aim is to strengthen the Alliance’s capability to carry out joint military operations through comprehensive modernisation. The initiative covers the whole of the military sector and will include all areas of defence planning both for the Alliance as a whole and for individual members of the Alliance. By placing increased emphasis on mobility, survivability, self-protection and a capability for the effective engagement of hostile forces, the DCI aims to establish highly mobile strategic forces equipped with the most modern weapon systems and with the best possible logistics and support. The DCI represents an obvious challenge for a national defence based mainly on conscription and mobilisation.
7. Further development of a European Security and Defence Identity (ESDI) –
   Norway has played an active part in the work of developing arrangements for cooperation between the WEU and NATO against the background of the decision to develop a European Security and Defence Identity (ESDI) within the Alliance. As a link in the development of the EU’s security and defence role, the aim is that the EU should have direct access to NATO’s planning facilities and to NATO’s military resources

5. International exercises and peace support operations International exercises and peace support operations

Participation in international military operations contributes to international peace and stability as well as strengthening Norway’s own security. Stronger participation in international peace support operations will also bring an important benefit by enhancing the competence of our own national Defence. But we also have a moral obligation to play our part internationally when the security of others is threatened.

In the year 2000 Norway will be an active contributor to international peace support operations, with KFOR, the NATO-led international force in Kosovo, as our most important contribution.

The Norwegian Armed Forces’ contribution to KFOR will, during the initial phase, consist of a strengthened mechanised infantry battalion with more than 1200 personnel. It is the Government’s intention to maintain a lower level involvement in SFOR in Bosnia in addition to the current UN operations.

By taking part in international exercises and peace support operations we show Norway to be a reliable collaborative partner with the will and the capacity to operate in concert with allied forces.

The Government also intends to strengthen the capability of the Armed Forces to contribute to international peace support operations under the auspices of NATO, the UN, the OSCE or the WEU.

At the same time the fundamental principles of our participation in international peace support operations remain unchanged: Norway shall only participate in operations which have a clear basis in international law. Norway’s contributions shall be significant enough to play a meaningful role but they shall at the same time also form part of a broader strategy involving the use of economic, political and humanitarian measures. It is also a fundamental prerequisite that the personal safety of members of the Norwegian forces shall be protected to the utmost extent possible and that participating units satisfy NATO’s requirements for the Alliance’s reaction forces.

The Euro-Atlantic Partnership Council (EAPC) and the Partnership for Peace (PfP) form the framework for NATO’s cooperation with other European countries. One of the central aims is to give the partner countries greater influence in the shaping of PfP activities as part of an increasingly close cooperation between NATO and the partner countries. Norway has, among other things, arranged and participated in PfP exercises and exercises «in the spirit of PfP» – i.e. exercises with selected partner countries. The Government has placed particular emphasis on bringing Russia more closely into this cooperation. Norway’s contribution is primarily in areas in which we have special expertise.

Nordic cooperation in the area of peace operations will be developed further through the joint Nordic exercises «Nordic Peace» which consists of a series of exercises within the framework of PfP. The core activity in the field of defence and security remains cooperation in international operations within the framework of NORDCAPS (Nordic Coordinated Arrangement for Military Peace Support). The aim is to be able, when required, to provide a joint Nordic force of up to brigade strength composed of units from all service branches. All the Nordic countries are involved in each of the major multilateral projects directed towards the Baltic countries. Nordic cooperation on defence-related support for the Baltic countries will be given progressively greater emphasis over the next few years.

White Paper No. 38 (1998/99)

In White Paper No. 38 (1998-99) on our future capacity to provide forces for international military operations, the Government recommends the establishment of an «Armed Forces Task Force» for international operations consisting of over 3,500 personnel. The aim of the White Paper is to sketch out the types of forces that we need for our future participation in operations abroad. Without laying down definite guidelines for the future shape of Norway’s defence organisation, the White Paper describes how the Task Force should be organised. The White Paper also discusses the capacity of the Task Force to react more rapidly and with the appropriate contributions in different kinds of international military operations, as well as considering how Norway can maintain a significant involvement in operations abroad over time in terms of both quantity and quality.

Norway’s participation in peace support operations now and in the past:

Norway’s participation in international peace support operations is at present concentrated in the Balkans. Since 1995 we have contributed something over 800 men and women to the NATO-led peace support operation in Bosnia-Herzegovina (IFOR/SFOR) within the framework of the Nordic-Polish Brigade and the Telemark Company. From October 1999 Norway will contribute a mechanised infantry battalion with a strength of over 1,200 to the recently established NATO-led peace force in Kosovo (KFOR) which will number approximately 50,000 in total. Apart from its extensive participation in the Balkans, Norway contributes a more modest number of military observers in the Middle East (UNTSO), East Slavonia (UNTAES), on the Prevlaka Peninsula in Croatia (UNMOP), in Sierra Leone (UNOMSIL) and a number of personnel in Sinai (MFO).

Norway’s participation in international peace support operations since 1947:

6. Armed Forces structure Armed Forces structure – further development – further development

The management of crises or conflicts requires a capacity for the rapid reorganisation and redeployment of the available resources. Unless this capability is present in peacetime, it is scarcely likely to be there when crises arise. Like any other enterprise, the Armed Forces must be capable of adapting their organisation and force structure to match the external conditions that may exist at any time.

The Army and the Home Guard

The new Army structure, which was integrated into the war structure as from the mobilisation term 1999, will remain essentially the same in the year 2000. The Army’s main contribution to invasion defence consists of 6 Division with three divisional brigades and divisional troops. The resource situation, however, means that 6 Division is unlikely to receive all the materiel that had been envisaged. A slightly less ambitious programme is called for and some delay in implementation will be necessary. The Home Guard war structure will be carried on. Further work will be done towards achieving the aim of a total strength of 83,000. Conditions for allied joint training and exercising in Norway will be improved by giving Åsegarden, Steinkjersannan and Voss garrisons the status of allied training centres. The Border Guard in Finnmark will be allocated extra funding for investments within the overall figure of NOK 50 million earmarked for the additional tasks made necessary as a result of the Schengen Treaty.

The Navy

The Navy’s principal missions are to safeguard supplies and reinforcements being transported by sea and to protect Norwegian territory against the seaborne landing of hostile forces. New frigates have an important role to play in this context. The procurement costs amounting to NOK 12.2 billion will be spread over several years. The Government has allocated NOK 670 million for new frigates in the year 2000. The prototype of the new type of MTB (Missile Torpedo Boat), KNM Skjold, will be undergoing trials and evaluation until summer 2000. The Coastal Artillery will undergo further development to provide enhanced mobility and flexibility through the acquisition of mobile missile batteries. Cost-saving measures, such as reducing the number of maritime defence districts and the centralisation of stores functions, will receive continuing attention.

The Air Force

The Air Force’s mission is to ensure air superiority over a limited geographical area for a limited period of time. The updating and life extension programmes for existing F-16 fighter aircraft will continue throughout the year 2000. A contract for the supply of new combat aircraft is expected to be placed during this budget year. It is proposed to phase out the remaining F-5 fighter aircraft and disband 336 Squadron at Rygge. The possible phasing out of two maritime patrol aircraft (Orion) and four light transport aircraft in the course of the year is also being considered. Air Force activity will be concentrated at the few possible air stations.

The Coast Guard

In peacetime the Coast Guard exercises our sovereignty in Norwegian territorial waters. An agreement concluded at a 1999 meeting of the North-East Atlantic Fisheries Commission, concerning a scheme of mutual control in international areas, entails a number of tasks for the ocean-going part of the Coast Guard. For the Inner Coast Guard a small reduction in activities is proposed. Increased use of satellite surveillance and the coastal radar chain will allow a reduction in the hours flown by Lynx helicopters and Orion maritime patrol aircraft and in the used of leased aircraft.

The Search and Rescue Service

The Defence Search and Rescue (SAR) helicopter service is provided by 330 Squadron with helicopters based at the Banak, Bodø, Ørlandet and Sola air stations and one helicopter temporarily based at the main air station at Rygge. The activities of the SAR helicopter service will be carried forward into the year 2000 within the existing organisation and readiness requirements.

Management and organisation

In the year 2000 priority will be given to compliance with the Defence Management Concept and National Finance Regulations, and to the harmonisation of defence management and information systems, organisational structures and regulations. Recommended changes in the management and organisational structure of the departments and agencies involved in the administration of defence materiel have been circulated for comment (the STYFOR project) and the Ministry envisages putting these recommendations before the Storting around the turn of the year. The introduction of a new common finance system for the Armed Forces will also be given priority.

Structural units - Army

* Number of soldiers

Structural units - Navy

Structural units - Air Force

7. Investment

The Government proposes to allocate NOK 7,619 million for defence investment, of which NOK 1,872 is earmarked for defence property, buildings and constructions while NOK 5,747 is earmarked for investment in materiel. Material investment is reduced by NOK 75 million in real terms (approx. 1.4%) compared with 1999. The Ministry of Defence intends to select a contractor and place a contract for the supply of new frigates by late 1999 or early 2000. It is also intended to place a contract for new combat aircraft during the budget year 2000 and to commence building a new ice-reinforced Coast Guard vessel, CGV Svalbard.

Earlier in the year the investment profile for the Armed Forces was set out in White Paper No. 23 (1998-99). A number of factors, however, now make it necessary for the Ministry of Defence to review this investment profile. These factors include:

1. The Storting’s decision to request the Government to make room for an earlier start to the MTB procurement programme.
2. Increased emphasis on tasks associated with international peace support operations.
3. The continuing pressure on the operating budget which is making it increasingly difficult to realise the investment plans.
   This review will form the basis for a report back to the Storting in spring 2000.

Implementation of White Paper No. 38 (1998-99), on adapting the Armed Forces for participation is international operations, will entail rationalisation and cuts in operating costs in some areas. But the overall package proposed will allow a net increase in funding for investment and operating costs within the overall defence allocation, consequently affecting some current investment projects for the Army and the Air Force.

In all, the sum of NOK 1,872 million has been allocated for investment in defence property, buildings and constructions in the year 2000. This represents an increase in real terms of NOK 230 million (14.3%) compared with 1999. The emphasis on building projects in the year 2000 reflects the efforts being made to realise future cost savings through reorganisation and rationalisation. The large amount of new defence materiel being delivered also underlies the need for new building projects.

Health, safety and environmental requirements, and the need for improved functionality, comfort and technology, all serve to increase the cost of refurbishment and new construction. Efforts to compensate for these increased costs are being made through hastening the disposal of land and housing no longer required by the Armed Forces.

The largest contracts planned for the year 2000

Important milestones in the year 2000

New or changed property, building or construction projects over NOK 25 mill

8. Personnel and military servicePersonnel and military service

People constitute the Armed Forces’ most important resource and military service forms one of the most vital cornerstones of our Defence. The principle of universal military service remains unchanged. At the same time, our Defence organisation is too large and the costs of providing training for the entire annual intake are too high. We have to make a clearer choice between, on the one hand, the principle of fairness and the universality of military service and, on the other, the need to tailor training to the requirements of the Armed Forces. More conscripts for the Army and the Home Guard will serve for a 6 months period and the call-up of an Army contingent will be postponed by 5 weeks.

Conscript training will to an increasing extent be tailored to the requirements of the Services and the resources available. Existing patterns of service, with 12, 9 and 6 months periods of service, will continue.

The main emphasis will be on a 12 months period of service but the manpower needs of the Army and the Home Guard will, on cost grounds, dictate that a larger number of conscripts will serve for a 6 months period.

The system of 9 months service for the Coastal Artillery will be continued. Because of lower birth rate, the number of conscripts called up in the year 2000 will be reduced by approximately 2,400 compared with 1999. It is assumed that these reductions in the period of service will not adversely affect defence preparedness or the level of training. The current arrangements, allowing demobilisation to be brought forward by up to 6 weeks for those who are serving for 12 months and who have secured an offer of employment or a place for further education, will remain in place.

While the Armed Forces as a whole are overmanned, the number of people with important special skills who are leaving constitutes a serious blow for the Services. There is a current imbalance in the officer corps in terms of both age and professional skills. The additional sum of NOK 94 million, over and above the 1999 funding level, will be allocated in the year 2000 in order to strengthen officer training.

The Ministry of Defence considers it most important that the training policy should result in highly motivated personnel with the necessary level of professional skills to enable them to meet whatever challenges they may face now or in the future.

Training will continue to be given the high priority required to ensure competitiveness in the labour market and to compensate for the loss of personnel with special skills. Training will in general be based on the requirements but in such a way that due account can be taken of the career wishes of the individual.

Recruiting for international operations has been difficult in recent years. The reasons are many and various. The White Paper No. 38 (1998-99) gives notice of a series of measures to be taken with a view to improving recruiting for such service.

Further work will also be done to bring the proportion of women, both officers and conscripts, closer to the target of 7 percent in all the service branches by 2005. More attention must also be paid to women, both in terms of providing more information and when they are recruited, to ensure, for example, an increase in the number of women attending the Defence Academies. As a further measure, a programme oriented towards women in management posts is being developed. The Armed Forces also attach much importance to measures designed to boost recruiting of more people with an immigrant background. The plan of action to attract more apprentices into the Armed Forces has resulted in a very satisfactory increase in the intake of apprentices over the last few years. The Ministry of Defence will pursue its objectives with regard to family-related matters in the context of the strategic plan for equal opportunities in the Armed Forces. Priority will be given to ways of encouraging individuals and families to move to a new place of duty rather than to commute.

Period of service

* for all categories