Decisive choices for a future-oriented defence organisation

New Year address to the Oslo Military Society given on 9 January 2012 by Defence Minister Espen Barth Eide.

Check against delivery

Excellencies, Ladies and Gentlemen,

Happy New Year! On the threshold of the new year I should like to share with you some perspectives on the security and defence policy situation as it affects Norway.

I should like today to direct particular attention to defence policy at a time of widespread economic difficulty. I will talk about the ways in which the economic unrest and our future defence are linked. It is not possible for Norway to remain on the sidelines and then expect that we will not be affected. Let me make it clear; in matters of security and defence policy we are already feeling the effect of the comprehensive budget deficits in the western world. 

As members of NATO we are part of a defence alliance which has “collective defence” as its most important principle. That means that we are mutually committed to one another to continue to develop a strong and credible defence capability. It also means that we depend on our allies having available the necessary capabilities to come to our aid, just as we must be prepared to come to theirs. Europe  currently finds itself at a time when there is less money available for defence, smaller armed forces and, in  worst case, reduced security. We must realise that this is a lasting, rather than a transitory situation. Against such a backdrop we too have to make our future choices.

The reductions in the defence budgets of most western countries require political action. The solutions, unhappily, do not simply suggest themselves. During the coming spring Norway has some important choices to make. This is what politics is all about – the making of decisive choices.

Today, therefore, I would also like to draw attention to the choices that we face. I will stress the importance of continuing to keep our own house in order. Furthermore my  emphasis will be that, in an international context, we are in a very favourable position, but that this cannot provide an excuse for letting things rest.  I would like to share some broad perspectives on defence policy as the Government sees it. I will talk about the important measures that we have taken and I will focus on the crucial choices that we must now make if we are to continue to ensure that we have a future-oriented defence organisation. 

It is natural to start with a look at the defence organisation here at home before turning to the economic turmoil that we see around us. Then, to conclude this address, let me share some thoughts  on our future defence and the next Long-Term Plan for the Armed Forces. 

Transformation objectives achieved
I have had the unique privilege of taking over as Minister of Defence just after the Government had put forward a budget that covers fully the current Long-Term Plan. For the first time in many decades we see a Long-Term Plan that is progressing towards the full achievement of its stated objectives.

We are privileged to have  the most difficult part of our transformation efforts  behind us. Privileged because we are  in the very front rank as countries strive to  transform from an old to a new defence organisation. With this modernisation of the Armed Forces we see the end of the most far-reaching restructuring processes that have ever been attempted in the public sector.

This transformation  has been the fundamental theme running through three Long-Term Plans. The Stoltenberg I government, with Bjørn Tore Godal as defence minister, came to grips in earnest with the acknowledgement that we had to devise an entirely new defence model. We needed a defence organisation and armed forces matched to the future challenges we would be facing. We wanted a defence organisation and forces appropriately structured and equipped with modern materiel that could be used here and now. And we wanted such a defence because we saw a world around us in which the use of military force could not be excluded. Both the Bondevik II government and Stoltenberg II continued the work that Godal had set in motion. And now we are practically at the finishing line.

Our contribution to the Libya operation last year provides a good illustration of the results of our transformation efforts. Some 15 years ago our F-16 aircraft were only capable of air-to-air operations. In the same way we should remember that until well into the ’90s our maintenance  and support facilities were not able to accompany the aircraft when deployed in operations. Our air bases were stationary. The only things that were mobile were the aircraft themselves. So our Armed Forces’ handling of the Libya operation illustrates the emergence of something quite new and it exemplifies the success of our transformation.

I am proud of what we achieved in Libya. In the Libya operation we sent our aircrew and specialists out on a truly front-line mission. Our crews quickly showed that they were amongst the very best in a broad coalition. Proud also of  the way in which our soldiers took such care in the verification of their targets in order to prevent civilian casualties.

This illustrates  that we are restructuring more than our organisation and materiel. It is also about developing a corps of personnel characterised by a unique combination of professionalism and good sense. It is all about maturity and the right attitude. It all adds up to being able to make the right choices. The feedback from NATO concerning Norway’s contribution has been exceptionally favourable. It gives me confidence that what we have done, and continue to do, is right.

Achieving an effective defence organisation, it has been necessary to prioritise. This has involved making difficult and sometimes unpopular decisions. And it has meant making choices crucial to our future.

There are many who deserve the credit for bringing us to where we are today. Farsighted politicians from many political camps have contributed to this process.

Others too have helped to prepare the way. Without the will and determination shown by the Armed Forces to carry through tough restructuring and to improve internal efficiency, this process of modernisation could never have been successfully carried through. The real agents of change are therefore those employed in our defence organisation and in all branches of the Armed Forces.

The major employers’ associations have had an important role to play. They have seen the overall purpose of this activity and put it above more short-term needs. It has been transformation  with dialogue. And we will not forget that this has gradually become the guiding principle in this cooperation.

Our Armed Forces today
We all have reason to feel proud. Proud because we are at the forefront in Europe in the restructuring of the defence sector. Proud because we have successfully developed an armed forces with an enhanced operational capability, increased usability, a strengthened capability for strategic leadership, appropriately concentrated and with a sound base and support structure.

Yes, we have a good “score card”.

We have met the financial targets we set ourselves. Amongst other things the defence sector has, through internal efficiency measures and restructuring, freed around NOK 1 billion. The Government has kept its part of the bargain and has allocated NOK 800 million at 2008 prices to the Armed Forces. In the course of a four year period, therefore, the Armed Forces have had NOK two billion placed at their disposal.

We have kept our promise of a navy with new frigates and corvettes. The Norwegian Navy now has a strong base in Bergen. Last Wednesday Sortland was formally opened as the Coast Guard’s command centre. When the new helicopters and naval-strike missiles are in place, Norway will have one of Europe’s most modern and effective navies.

We planned for an Army with a clear footprint in both North and South. Today we see a Norwegian Army with Inner Troms and Østerdalen as its geographical centres of gravity and that will continue. The Army’s manpower has also grown each year since 2005. The Norwegian Army has carried a heavy burden in Afghanistan. With a reorientation of our force contribution in Afghanistan, the burden borne by the Army will be significantly reduced. This will make it possible for us once again to build up and train at brigade level. We took advantage of this in Exercise Rein in November last year and we shall be doing so again in the major exercise Cold Response in March this year.

We have delivered on our promise to make a decision in principle concerning the acquisition of new combat aircraft. The modernisation of the Air Force has been taken forward in expectation of a decision on the Norwegian Air Force’s new base structure. Our ageing F-16 aircraft have been modernised and new transport aircraft have been procured. New maritime helicopters are being phased in and our maritime patrol aircraft are being updated.

We planned for a far-reaching reform of quality in the Home Guard. Today the Home Guard is scarcely recognisable compared with what it was a decade ago. The Home Guard staff has now been brought together at Elverum. We see more flexible and modern Home Guard forces. One of my first major investment decisions as defence minister was the acquisition of 5,000 hand weapons (HK 416) for the Home Guard. Yes, the time when the Home Guard were the Army’s poor relations, equipped with cast-offs, is fortunately long past. 

We promised to review and renew the Armed Forces’ logistics and support facilities. Comprehensive restructuring and the implementation of efficiency measures have now been completed. When circumstances have changed, we have taken the necessary action. For example, just before Christmas, the Norwegian Air Force’s main Maintenance facility at Kjeller was established as a national facility so that it would able to compete for future maintenance contracts for military aircraft. This national agency, AIM Norway SF, will be able to undertake commercial maintenance assignments for the new F-35 combat aircraft, both for those in service here in Norway and for those operated by our allies. Many  challenges are still to be solved  by the Norwegian Defence Logistics Organisation (NDLO). I will  therefore be looking particularly  at the  skills and capabilities needed by NDLO, focusing not least on administration practices and NDLO’s ability to adapt to changing circumstances.

I could go on. There are so many good results. However, that is not the point. The point is that today we possess flexible, capable forces that are delivering, both internationally and nationally, every single day. It is this that signifies whether we have been successful in our transformation efforts. The answer is self-evident.

We have also seen that there are certain elements of the last Long-Term Plan that have had to be modified along the way. When it became clear that relocation of the training of naval recruits to Haakonsvern would be substantially more costly than anticipated, it was decided to carry on training at HNoMS Harald Hårfagre at Madla. This illustrates the dynamic nature of the restructuring process in which our course can be adjusted underway.

Yes, because we are constantly learning. We adapt and we renew. Our work is affected by what is happening around us.

We have achieved much. At the same time I can also see many  challenges ahead regarding our defence policy here at home. I have already mentioned the areas of logistics and support. Let me spend a little while outlining four important challenges as I see them. 

Challenges in our future work

Competence and personnel administration

First of all, personnel and competence. The renewal and modernisation that we have seen are, ultimately, of no use if we do not have the personnel to operate the advanced new equipment. As I have already mentioned, the restructuring process cannot succeed if we focus solely on structure, geography and the purchase of new platforms. More than anything else, we must invest in personnel.

The story of today’s flexible and responsive defence is, for me, the story of a new set of tasks, new needs for competence. It is also a story about a changing labour market in which the Armed Forces are up against strong competition for the right skills and qualities.

As in other areas, the quality of our defence forces depends on the skills and competence of each individual. In my view, therefore, the time is more than ripe to provide a clear strategic lead in developing this competence and the personal skills and qualities required. Personnel development must have a central place in the management of this sector. It must be recognised that this is crucial to the achievement of the strategic goals we have set ourselves.

The comprehensive changes that have taken place since the ending of the Cold War have not been extended sufficiently to our armed forces personnel. Indeed there is almost tangible evidence that personnel, and the development of their personal skills and qualities, have not been subjected to a unified and systematic review. This is something that I shall be focusing on in the time to come.

For this reason, we carried out a pilot study last autumn involving 200 people drawn from all parts of this sector. The purpose of the study has been to establish how these challenges are being experienced. The study looks at the ability of the armed forces to attract, recruit and retain the right competencies now and in the future. And it describes how the skills and competence of service personnel are developed through their jobs and educational courses, and it looks not least at our ability to apply strategic management to the development of this competence.

This study brings out personnel and competence in the defence sector as a theme for development in the longer term. My wish is that this work will give the new Long-Term Plan a clear orientation towards the area of personnel and the development of competence.

I can well see that having armed forces in which there is a great demand for skills and expertise, we have to provide opportunities for a career as a specialist. We have to recognise that even though our armed forces perform a wide range of tasks, these all form inter-dependent parts of a value chain. And we must acknowledge more widely our mutual dependence on society as a whole. We need to reflect the diversity of the society in which we live through greater diversity in the personnel we recruit.

We have a long tradition for producing skills which benefit the rest of society. On the other hand we made too little use of skills that have been developed by others. In a service environment in which the need for specialist skills is becoming increasingly intense, we must ensure that the competence acquired by the individual remains within the organisation. This means retaining the right people and devising better systems for sharing and documenting the knowledge and experience that we have in-house. We must ensure that the competence structures are tailored not only to meet the actual needs of the organisation as it exists today but that they are also designed with expected future challenges in mind. We must have a personnel policy that enables us to recruit, retain and develop both military personnel and civilian staff who are well motivated and who possess the skills and qualities that match the needs and tasks of our defence forces. Not least, I would stress at this point the importance of retaining and recruiting more women to serve in the armed forces.

I have been impressed on so many occasions by our service personnel. It is true to say that we administer one of our society’s greatest accumulations of skills, competence and expertise. But we need to become even better in managing and developing this hugely valuable resource. Let us be ambitious. My aim is that the Norwegian Armed Forces should be the foremost public sector actor in the strategic management and development of this vast resource. It is my wish, therefore, that this should be an important theme for discussion in parliament and in political circles in the time we have before us. In addition I look forward to working closely with employers’ associations in the defence sector on this topic.

A related challenge – in fact one that occupies my mind today – is whether we have a pay code for service personnel that truly reflects the times we live in, the challenges we face today and the nature of the new flexible, capable defence forces. It is, unfortunately, a fact that as soon as the armed forces have a mission to carry out, at least a mission involving long hours or at a location remote from ones normal place of work either in Norway or abroad, then the taximeter moves into overdrive.

We know from experience with other public services that this is a deep-rooted practice within the state pay and salary system. This does not mean that current regulations are sacrosanct. Nor does it mean that they are necessarily appropriate.

Today we have a pay code which actually limits the ability of the armed forces to carry out their missions. In my view, therefore, it is high time to look at whether the basic pay for officers could be increased and the various allowances cut back. Let me make it clear immediately that this not about saving money! It is not about reducing our overall pay costs but rather about the balance between pay and allowances. Future officers will not earn less than they do today.

It may be that we should aim for a system in which personnel serving in operational roles are given good competitive rates of basic pay. In that case we should also make it clear that the individual might, as part of the job, have to live in a tent, pilot a ship at night or find himself for a period of days at a location far from his usual place of work. In this discussion we would naturally include the servicemen’s organisations and what I say here should be taken as the statement of the challenge rather than an expression of ideas that have been fully thought through. 

Materiel versus running costs

My second point relates to the renewal of materiel. The major investments that we are making in the Navy and the Air Force come at a time when we are continuing to strengthen our presence in  our adjacent areas The platforms being procured will certainly boost our operational capability. At the same time we appreciate that these investments in materiel will entail substantial running costs. That means that we must take extra care to ensure that these capabilities do not take up an excessive proportion of our resources to the detriment of other areas of our military capability. They are intended to form cornerstones of our new defence structure, not cuckoos in the nest. The modernisation of the armed forces must continue to be based on a long-term sustainable balance between investment and running costs.

The frigates and the new combat aircraft are examples of new and advanced platforms with improved capabilities. They are capable of carrying out a much broader spectrum of missions than their predecessors. So it is not sufficient just to think that we are replacing old frigates with new frigates, and old combat aircraft with new combat aircraft – we also need to consider the greatly increased possibilities inherent in these new acquisitions. We must be open to change, to new thinking, and we need to become better at seeing Norway’s armed forces as a unified whole rather than an assembly of different service branches.

Adapting to new tasks – the post-Afghanistan era

Thirdly I see challenges in what, for the sake of simplicity, we may call the post-Afghanistan era. Here we have the sum of a variety of complex challenges that we shall be facing on the day that the last Norwegian soldier returns home from Afghanistan sometime in 2014 – that is to say in a couple of years time. For the present, let me just make one or two observations.

Together with other ISAF countries and our allies, we are on course towards the transfer of responsibility for security to the Afghan authorities in 2014. And I am very proud of the fact that our soldiers are well to the fore in the training and teaching of the Afghan security forces.

At the same time as we head towards the transfer of responsibility in Afghanistan, President Obama is fulfilling his promise to withdraw American forces from Iraq. The last American soldiers returned home in time for Christmas. I believe that these two things, taken together, can mean that the days of major intensive, predominantly land-based, operations may now be over, at any rate for a considerable time. This is in fact a clear signal from the American side, one that was further reinforced when President Obama last week set out the Pentagon’s new Defense Strategic Guidance. One message contained in the defence strategy outlined last week is that the size of America’s armed forces will no longer be determined on the basis of their ability to carry out large-scale stability operations.

The Libya operation points possibly towards a new type of operation in which the set of tasks  and the level of ambition is more limited and more clearly defined. If this is to be the case, we need to position ourselves to face a time when we will no longer be constantly involved in operations under the NATO flag as we have become used to. And it is worth remarking that while we now – almost a decade on from the day we first went into Afghanistan – can also mark the fact that we have come through an operation in Libya that both began and ended in the calendar year 2011. It is a long time since we would have been able to make a similar claim! But here let me hasten to add a warning: we have always had a tendency to try to plan for the next war on the basis of the last. It may well be that, seen from the perspective of history, Libya will prove to be the exception.

In any case this means that we can envisage an army that no longer feels itself stretched and overloaded. Instead we may see an army which is equipped with modern materiel and trained to carry out high-intensity operations but which may have fewer onerous and long-lasting missions in theatres of operation far from home.

These missions have given the Army new competence, new materiel and a qualitatively new and vastly improved capability in defence of our own country. The Army deserves great credit for the way in which it has managed both restructuring and front-line operations at the same time. As I see it, the need for some degree of mental restructuring may not be far away as we place increased emphasis on defence tasks within our own core areas. This will not necessarily be a simple readjustment for all parts of the Army to make and it is important that we focus clearly on this challenge for the future.

Such a development obliges us to consider how we can become better at utilising the unique body of competence that the armed forces possess. The high tempo of operations in Afghanistan has changed the way in which we think about our armed forces and how those in the services think about themselves. We must look at the way we recruit. We must consider more carefully what we do in a situation where training and exercising at home may well, as a rule, come before regular rotation in operations abroad. We have to look at the kinds of capability that are likely to be in demand in the longer term, not least by the UN. And we must remember that it is our national tasks and the requirements of collective defence within NATO that should be the determining factors for the size of our defence, not least the Norwegian Army. And finally, in this picture that forms part of the post-Afghanistan era, I want us to become steadily better at looking after those who have been out serving their country abroad. For this reason I shall be pressing strongly for implementation of the Action Plan   for Veterans.

Aid to the civil community

My fourth and final point is linked to the challenges we have experienced here in this country during the past year. More than anything, 2011 will be remembered for the outrage that took place on 22 July. This dreadful event has also brought into focus the way in which our defence forces can assist the civil community.

As recently as during the period just before Christmas, the destructive storms along our western coast shed light from a different angle on how the armed services can assist. For local communities with little in the way of infrastructure, the Home Guard was a vital and much-needed source of support.

The 22nd of July and the storms in West Norway show, each in their own way, that we have defence forces that are ready and able to assist when society is put to the test. The Norwegian Armed Forces have always provided aid to the civil community to the best of their ability, that goes without saying. In times of crisis, accidents, natural disasters or terror attacks, the armed services are ready to help. And in such situations, the Home Guard in particular has been in great demand.

We believe that we are entering a time when there will be more, rather than less, call for this type of assistance. We are vulnerable not least to climate change. We feel vulnerable, too, to some aspects of new technology. We believe that this will strengthen people’s need to know that the emergency agencies are available and that they are not far away. We realise that feeling truly secure means knowing that help in emergency is there if we need it. Parliament and the Government are now actively engaged in identifying the long-term consequences of lessons learned from the tragic events of last summer.

The Government will therefore make every effort to maintain the country-wide presence of the Home Guard. The Home Guard should be located close to where people live and where there is community infrastructure that needs to be secure. All in all, we will continue to do our utmost to ensure that the Home Guard is appropriately equipped with modern materiel and has a clear set of objectives that are exercised appropriately.

The important processes that are now under way in relation to society’s overall security will form an important backdrop for our long-term defence planning. The Chief of Defence’s Military advise discusses  measures that would  strengthen the security of vital infrastructure and also highlights the need for a clearer division of responsibility vis-à-vis the police and other emergency services. I will be working closely on this with my good colleague and predecessor, Grete Faremo, who, as you know, has now taken up the position of Minister of Justice as from 1 January.  Together we need to be considering preparedness in the broadest possible sense because the next crisis may well be totally different from that of 22 July.

My friends, I have attempted to describe the state of our defence as it stands today. In this, the last part of my address, I propose to look in more detail at some questions associated with the next Long-Term Plan. Let me first, however, turn my attention from Norway to the international situation as I see it.

An outward look – unrest in the global economy
And so, Ladies and Gentlemen, we find our own part of the world, Europe, in the throes of what may be the worst crisis in the region since the Second World War. These are not my words, but those of the German Chancellor Angela Merkel. In those countries most severely affected by this crisis one sees mounting unemployment, a lack of confidence in the future and growing social unrest. Where technocrats are brought in to form a government, this not simply reflects the need for economic expertise. It may also suggest that the trust between the voters and those elected on a political ballot has become very thin. And this is worrying.

The economic crisis has revealed a number of weaknesses in the existing financial system. Not least it has shown how the absence of political control can make otherwise robust democracies quite fragile.

We are witnessing how the political stability in a number of countries is being put to the test. The rule of law is being challenged. In some countries in Eastern Europe we can detect developments that give cause for concern. These countries to which we are close, albeit with a comparatively short democratic history. This is not only serious for the countries concerned, it is also a serious concern for a Europe that could become increasingly inward-looking.

We must also remember that poverty, unemployment and hopelessness provide a breeding ground for political groupings that harbour racist or xenophobic tendencies. The fact that violent, antidemocratic and extreme attitudes tend to flourish in times of economic depression has been borne out throughout history. We must, therefore, watch these developments very closely.

International cooperation is needed today more than ever before. We need more international cooperation and less ‘alleingang’. We must walk the difficult path into the future together rather than in splendid, uncoordinated isolation. We must strive to preserve the collective capability of the Alliance. I advocate strongly that those countries that feel impelled to cut their defence budgets should, as far as is practicable, seek to coordinate these reductions through NATO. We must ensure that the economic crisis does not lead to the re-nationalisation of defence and security policy. That is not a viable path ahead. History teaches us that this has been a path leading to a fragmented Europe. I feel it right in my present role to draw attention to the undeniable risk that a social and economic crisis can develop and become a crisis that also has a security dimension.

I do not believe that this will happen this time. Today we have a far greater degree of robustness in the form of international institutions and mechanisms. On the other hand we should be aware of the possibility of moving towards a more fragmented Europe in the context of security policy. One of the fundamental tenets of NATO and the EU is indeed to keep Europe together, a Europe with solid transatlantic ties.

Both the Ministry of Defence and the Ministry of Foreign Affairs have in the past described how emerging economic superpowers, such as China, India, Brazil and Indonesia, will alter the global balance of power. The same applies to a revitalised Russia. We are witnessing a world in which the traditional political and economic dominance of the West is in decline. The United States will continue for many years to be the world’s only true military superpower. But its lead is diminishing. This is something of which the United States’ political leadership is only too painfully aware.

Indeed we have to acknowledge that the centre of global economic power no longer lies in Europe. The financial crisis has only served to reinforce this fact. It is towards Asia in particular that much of the economic power is now shifting. During the ’60s and ’70s the West’s share of the global GDP was in excess of 60 %. Now it is dropping rapidly towards 40 % and by the middle of this century it may well be as low as 30 %. This, in other words, points towards a world quite different to the one to which we have become accustomed.

We are seeing a world with the United States and China establishing themselves as the two new superpowers. Accordingly we are witnessing a markedly new phase in United States policy towards China. The United States’ new defence strategy confirms what we have long been saying, namely that in the new world order, America’s focus will inevitably turn to Asia and the Pacific region.

The United States is facing an emergent China which, to an increasing degree, is engaging in power projection in its areas of interest. They are encountering a China that seeks to strengthen its room for manoeuvre in the region. China is doing no more than great powers have always done throughout history. The assumption must be that relations between the United States and China will be of great importance to the future international climate. It is actually entirely logical – but the consequences are inevitably that the weight placed by the Americans on Europe will continue to decrease while, at the same time, defence budgets on both sides of the Atlantic continue to be cut.

It is the fundamental structure of the international system itself that is changing. The brief moment of unipolar power is over and the global centre of gravity is shifting eastwards. History has shown us that military build-up and a demand for greater international influence often follow strong economic growth.

In such a scenario, Europe too has to rediscover its role.

The financial crisis is without doubt the greatest challenge currently facing NATO. There are many reasons for this. The economic crisis affects all countries, and perhaps especially their defence budgets. The defence budget is often seen as an easy target when economies have to be made. Any negative effects of a reduction in defence spending are widely perceived as something, almost abstract in nature, that might be felt only in the longer term. It hurts much more to cut the spending on things that are close to us all, like health, education and transport.

The majority of the Allies have cut their defence budgets. These countries are currently spending less on defence than in 2008 when the crisis first became felt. And this is happening at the very time at which NATO’s largest member, the United Sates, is facing a major budget crisis.

For the European allies the defence budget cuts are, however, more dramatic than for the United States. The cuts are coming just at the time when the need for military restructuring is coming to the fore. We see a whole succession of countries that, in contrast to Norway, have chosen to postpone the restructuring of their military organisations. And we see countries where it has not been possible to reach the broad political consensus that we recognise from our own restructuring process. We understood that it would take many years for the benefits of restructuring to become evident. The process takes time. It hurts before it pays off. And we were clear that we had to take the long view when working out the costs of a new structure and new materiel.

The financial crisis therefore brings with it a need for restructuring and cuts at a far more existential level. NATO’s Secretary General Anders Fogh Rasmussen chooses a surgical analogy when he says “There is a point where you are no longer cutting fat; you are cutting into muscle, and then into bone.”

There is no doubt that the financial cutbacks are of critical importance to NATO. They represent a serious challenge in the context of burden sharing and the transatlantic ties. We have to bear in mind that some 75 % of the Alliance’s total expenditure on defence is borne by the United States. That share has increased in recent years. At the same time we know that only the United States is capable of providing the heaviest support facilities that NATO draws on as, for example, in the Libya operation.

Let me add the UN, too, is not immune to the turbulence in the financial markets. We have to remember that the important aid resources that the UN administers also suffer the impact of falling markets. This in turn means that the mechanisms at the UN’s disposal, which themselves have an increasing influence in stabilising a country following a period of conflict, are put under pressure. Those of us who focus our attention on matters of security policy should not lose sight of this.

At the same time: If it is to be assumed that the day of the major, western-dominated, military operation is nearing its close, we can see a need for the global instruments to be strengthened. From Norway’s side we would wish to continue to work to this end.

Today countries are being forced to cut entire elements from their defence structures. If these cuts are not considered in the context of the needs of the Alliance, the process can only lead to substantial gaps in NATO’s collective defence capability. We need, therefore, to see that the cuts are made in a way that takes account of the collective needs of the Alliance. We have to prevent the holes in our common security net from getting larger.

In addition we have to bear in mind that these financial challenges are compounded by the fact that countries outside the Alliance are currently experiencing strong growth.

While Europe and the United States are cutting their defence budgets, defence spending in countries such as Russia and China is increasing. From 2000 to 2008 the Russian defence budget grew by 10 % year on year. While Russia may not have escaped the scourge of the financial crisis, we still see real growth. China has trebled its defence budget over the last decade. This has taken place at the same time as a far-reaching overhaul of its military organisation from what was essentially an invasion-oriented defence with a people’s army as its backbone, to a restructured organisation with modern and mobile forces at its disposal. In this way China is confirming that it has new ambitions with regard to its core areas of interest.

United States budget reductions, coupled with the fact that a growing proportion of its military capabilities are being directed towards Asia, have serious implications for Europe and for NATO. Overall we see less attention being paid to our own continent. But even more importantly, we see a reduced collective defence capability.

In crude terms, it is this situation that is likely to dominate the run-up to the NATO summit in Chicago in May, and perhaps the summit meeting itself.

Let me therefore say something about what NATO is doing to meet these challenges. And some words on  what  this means for NATO,  what Norway is doing, or rather  what is required of Norway.

Towards a closer and smarter defence collaboration
Over the years, a Norwegian response has been to seek various shared solutions, either through NATO or through Nordic or bilateral arrangements.

We have to create collaborative solutions that enhance a common capability. This is clearly in the interests of both NATO and the individual countries concerned. In the same way, here at home we need to find ways of getting better defence value for our money.

What makes NATO really unique is its combination of an integrated military structure and its permanently available mechanism for political decision-making. No other organisation possesses such a combination. This is what differentiates the Alliance from other comparable international organisations. That is why it must be maintained and not diluted.

Over the course of the last two decades we have witnessed developments in which NATO has become associated to an increasing extent with a succession of military engagements outside its own core area. Today there are many who seem to believe that this is the real purpose of NATO. Among the generations now growing up there is little realisation of why NATO was originally established.

Many in this gathering here today will remember another NATO. A NATO whose military capability had exactly the desired effect, albeit at a time when there was no need actually to use it. Deterrence was achieved by keeping the relevant forces at readiness, decade after decade. We remember also that this was the most important reason for maintaining land, sea and air forces and a readily available joint command structure. It was the safeguarding of our own territory, collective defence and Article 5 of the North Atlantic Treaty that lay at the core of the Washington agreement.

Times have, of course, changed. We must continue to recognise the importance of the Alliance’s operational engagements. We should continue to use the Alliance when the UN and the global community request it. But the pendulum has swung too far. We have to find a sustainable balance.

We need to know that NATO is coming home and that Article 5 rests on solid ground. This has been Norway’s message for many years and it has won broad support, not least in the new Strategic Concept.

Let me mention two important tracks that we, on Norway’s part, are actively working for in NATO.

For Norway’s part we have made clear the importance we place on the European allies coming together to develop the essential joint support capabilities with NATO as the framework and facilitator. Norway currently participates in all the multinational joint capability projects within NATO’s frameworks. One of the capabilities I was able to see for myself when one of our new, common-financed C-17 transport aircraft took us to Afghanistan just before Christmas. In one corner of the cargo space we could see a Bell helicopter together with a large amount of equipment and a large number of aircrew. That says something about the scale of the resource that these aircraft represent.

We should remember that such joint capabilities are crucial to NATO’s effectiveness and credibility. It is capabilities like a joint command structure, AWACS and airborne ground surveillance (AGS) that give NATO its operational advantage. Withdrawal from NATO’s joint projects, as we have seen in recent times, not only serves to chip away at NATO’s military capability; it also make NATO even more dependent on America, an America that is turning its attention increasingly towards the Pacific region.

Early tomorrow morning I shall be travelling to Washington to meet my American opposite number. The meeting with Defense Secretary Leon Panetta comes at a good time. We are both relatively new in our posts as defence ministers. The United States and Norway share views on many of the matters that are now facing NATO. There are strong links that bind us. I shall be discussing with Secretary Panetta how we can together help to ensure that NATO emerges strengthened from the current crisis by some creative thinking in areas such as that of “smart defence”. 

It is also important for me to discuss the follow-up of another significant Norwegian initiative. The Core Area Initiative was, as you know, launched in 2008 as means of finding a better balance within NATO between out-of-area operations and the regional focus on the vicinity of the territory of the Alliance. . We now wish to take this initiative one step further.

The Core Area Initiative advocates giving more thought to so-called smart defence. It gives NATO increased synergy. It brings NATO home.

We wish to see NATO coming home because we need it. Simply because we cannot risk the erosion of NATO’s core tasks. NATO’s fundamental competence in Article 5 situations and contingency planning must be maintained at a time when the experience of the majority of officers stems from Afghanistan or the Balkans.

The existence of such shortcomings became clear during the course of NATO’s annual crisis management exercise last year. The exercise showed that the competence, procedures and routines for dealing with Article 5 situations are in need of improvement. Unfortunately we were proved right in our concern that the high operational tempo had detracted from the Alliances ability to maintain its core tasks.

The Core Area Initiative alone cannot remedy this situation but it points in a direction that attracts broad support within the Alliance. We should like to use the Norwegian Joint Headquarters as a pilot project in which cooperation with NATO’s joint headquarters could be formalised over the course of a trial period. We hope to use this project to give NATO’s command structure a regional focus. We would also like to show that it is “smart defence” to connect national headquarters with NATO’s command structure and to show that this gives synergy both for the Alliance and for Norway. This would give more defence for our money as well as increased security for NATO – and for Norway.

Yes, I am glad to see how different collaborative solutions are now being established within the Alliance. Hastened by the financial crisis, so-called “smart defence” was firmly placed on NATO’s agenda last summer. In my view it was high time that this was done.

A number of our allies are now looking closely at our arrangements for Nordic cooperation. What many had perhaps viewed as a non-traditional form of cooperation is now a possible pattern to be followed. While many were sceptical, we now see growing interest and a wish to learn. And let me be clear, we are not considering Nordic cooperation as an alternative to our cooperation and the obligations we have as a member of NATO. We are just creating an important supplement. It is in our interest to bind the Nordic partner countries closer to NATO. Our Nordic neighbours  takes exactly the same view about linking Iceland and ourselves more closely to  the EU’s common security and defence policy.

The Nordic countries have been working together for many years to develop joint solutions. This is nothing new. In the current economic crisis we wish to set a good example. As close neighbours, our geographical location gives us particular advantages. But we also enjoy a high degree of mutual trust. Our thinking is not bound by tradition or by national borders. We have similar views on the need to make our armed forces more effective. And we share the ambition to make the most of our national resources. I am glad that Denmark too now places noticeably greater weight on Nordic defence cooperation than was the case just a few years ago.

These cooperative activities have come a long way. Procurement, logistics, operations and training – these are all areas in which cooperation is up, running and steadily developing. Norway and Sweden have collaborated to produce a new artillery system. Today there are Swedish, Finnish and Norwegian combat aircraft exercising regularly across national borders. Last year saw 62 days of joint training and exercising involving the air stations at Bodø, Rovaniemi and Umeå. Here we meet other “foreign” aircraft. We fly in other countries’ air space. Our training benefits hugely at no extra cost, no-one has to be re-deployed and all costs are borne from existing training budgets.

To give you another example: During my recent meeting with Nordic defence ministers at Örebro, agreement was reached between Norway, Sweden and Denmark to assess the possibility of cooperation in the use of Hercules C-130 tactical transport aircraft. We share in the common intention to set up a future joint pool of aircraft on which we can draw as the need arises.

Also participating in the meeting in Örebro were defence ministers from the United Kingdom, Germany and the Baltic States as well as senior representatives from the Netherlands, Poland and the United States. This is what we call the Northern Group. The Northern Group is an important arena for us in which to strengthen existing arrangements and establish new multinational solutions.

We wish to cooperate still more closely with our allies in the North Sea region. Sweden and Finland, as partners in NATO, think along the same lines and have well-advanced military cooperation arrangements with countries in our region. I would claim that the Alliance is strengthened by countries with common geostrategic interests coming together. It gives us a new and important building block in the overall defence structure. 

At the same time we wish to strengthen our bilateral defence cooperation with a group of countries including Germany, Poland, the United Kingdom and the Netherlands. Some of these arrangements have already been in place for years and the aim is to strengthen and develop these links still further. Norway is currently upgrading its defence cooperation with all these countries.

On the Army side our collaboration with the Netherlands and Germany has been important, not least for the Telemark Battalion. Another example is the multinational cooperation on combat aircraft under the auspices of the European Participating Air Forces group. We have worked together on operations and the support and maintenance of the F-16. Procurement of the F-35 Joint Strike Fighter opens the way to developing this cooperation still further.

The development of our collaboration with these countries is not restricted to defence. Let me remind you that, with countries such as the United Kingdom and Germany, the Government is engaged in a broad range of strategic initiatives. Collaboration in the field of energy is one such strategic area.

The EU’s strategy on defence cooperation is something that we, from the Norwegian side, wish to follow up. It is our view that the EU’s military cooperation should be strengthened. This applies to such areas as research and development, procurement, training and the military missions one chooses to undertake.

Norway is therefore playing an active part in those cooperative solutions that represent added value for us. One such arena is the European Defence Agency. This gives Norway and the Norwegian defence industry valuable access to the European defence market and the whole area of research and technology. In Norway we have a strong and competitive defence industry that has experienced rapid growth in recent years. This is a development for which we want to prepare the way for still further growth.

Ladies and Gentlemen,

I have drawn attention to a number of important building blocks. I could have chosen other examples. That is not the point, however. The important thing is to stress the point that these are blocks we are building for Europe and for NATO. It is the aim of strengthening the overall capability of the Alliance that has been the guiding principle for our work. It is in the collective strength of the Alliance that Norway’s security ultimately lies. 

Closer defence cooperation, “smart defence”, does not happen by itself. We also need “smart government”. We need far-sighted politicians who dare to think in a longer perspective rather than in terms of short-term populist solutions. Not least, what we need today are politicians who dare to make the decisive choices.

In the final part of my talk, let me therefore come back to the choices that we ourselves will soon have to make.

The coming Long-Term Plan
By the end of the coming year we can expect to have forces and a defence organisation which strike a balance between ambitions, structure and resources. We have a solid foundation on which to base the further development of our defence. We see that structural rationalisation and internal efficiency measures have freed substantial sums that have already given us a considerably enhanced operational capability.

We see that we are in a position where we are better able to make changes because they are sensible, not because we have to, but because we still want a defence which continues to deliver increasing operational capability.

Since the transformation is, for all practical purposes, now complete, we could simply continue with the structure that we have today. Why should we not take that course? My answer is three-fold:

One reason is that an international rule of law is not a good that is simply there. It must constantly be protected, defended and developed. Our freedom and our values must be maintained and protected in an uncertain world. When countries cut their defence expenditure it is not because they expect the world to have become a safer place. When countries choose to reduce their security arrangements, it is not because we need less security. Of that we can be quite sure.

The second reason is that, even after a successful transformation, we do not wish to abdicate from the ambition to create a better defence. We modernise in order to get the best value for our money. We modernise to give ourselves the possibility of having a defence not only for today but for future generations. The financial crisis tells us not only that we must work for better and more integrated solutions both within the Alliance and in the Nordic area. It also tells us that, in an acute situation, we may perhaps have to do more on our own, without this leading to the increased nationalisation of security. And that tells us that we must keep our own house in order.

My third and last answer is that we wish the positive effects that we feel materialising today to continue to make themselves felt in the years ahead. Allow me to remind you  that today our operational capability is increasing proportionally more than the amount we spend on it. That is a good indication that transformation is working. It means that we have succeeded in transferring resources from an overlarge support structure to the delivery of operational activity. There are solid statistics to support this and we shall continue to follow this course. Not necessarily through further major structural changes but by renewing and improving the way we work to make it more effective, not least in areas such as personnel and competence management.

The coming Long-Term Plan will be new from the ground up. It is a long-term plan but not quite like the old ones. We can see that there is a need for a new and better adapted planning logic which will make it possible to introduce changes as and when the need arises, so that there is no need to wait until the next 4-year plan. Today we are able to concentrate on those areas of the Armed Forces where developments indicate that important decisions must be taken.

The guidelines for the direction we need to take come from many sources. The current Long-Term Plan – which was of course put forward by this Government four years ago with the same parliamentary majority that we have today – sets out certain guidelines. The Government Platform from 2009 sets out a clear and unambiguous vision of where the Armed Forces are heading and it states the objectives that the Government envisages for the defence sector. Then shortly after I took up this post, I received another very important input, namely the Military Advice from the Chief of Defence, General Harald Sunde. 

As expected, the Military Advice has been the subject of some debate. That is as it should be. Public interest in defence issues in Norway is strong, it touches the lives of many people and many are keen to take part in the debate. And that is only natural while we are talking about one of mainland Norway’s largest investments. And it is natural not least because of the considerable repercussions that could be caused in those locations that are candidates for housing our new combat aircraft. As I see it, however, it is important that that such a debate not only is  a dispute between local politicians.

Defence policy involves weighing up a multitude of factors. For me, as defence minister, my first priority is to ensure that Norway has relevant, sustainable and capable forces  that are matched to the needs of the NATO alliance. We must have a defence adapted to the challenges that may face our society and our national security. It is here that I hope that the main focus of the debate will lie, whether one comes from Ørlandet, Bodø, Evenes or from any other place in Norway.

At a time when we are about to make one of the largest public sector procurements ever, my primary concern is not so much to discuss the background to all this, but rather to state the fundamental reasons that underlie our need to have an effective defence.

It is gratifying to know that 80 % of respondents in a recent opinion poll believe that membership of NATO makes this country safer. And we can take pleasure in NATO’s positive assessment both of what we have achieved internally and of our contribution to the Alliance and its international operations.

At the same time we cannot avoid the fact that fewer and fewer of our citizens have any contact with the Armed Forces, either through military service or in the local community. It is our responsibility to ensure that the Armed Forces do not become something only for those with a special interest in defence. We therefore need a discussion of defence policy per se.

I could have spoken at greater length of the tasks of the Armed Forces, and why we have a defence organisation. Allow me, however, to content myself here in sharing one fundamental perspective.

When the taxpayers are willing to give us 40.5 billion NOK annually in the form of the defence budget, there is one overarching reason for this: they expect us to do a good job of defending Norway.

We talk about what the Defence Commission in 2007 called the timeless need. That a state needs armed forces not only to meet the threat that exists at any given time, but also as an answer to a world that is heading we know not where. That the Armed Forces fulfil a timeless need – to safeguard the nation’s security.

To prevent war is about having strong enough defences to eliminate any temptation to challenge us militarily, or to force us to adopt a given policy through the threat or use of force and military power. That is the reason for having Armed Forces.

More than anything else, the primary purpose of the Armed Forces is to prevent conflict by establishing a threshold. Together with a sensible foreign and security policy, the Armed Forces’ deterrent threshold will contribute to stability in our own neighbourhood. This is not only in Norway’s interest. By keeping our own house in order we also contribute to regional stability.

Our NATO membership is a part of the deterrent threshold and will continue to be the rock on which Norwegian security and defence policy is founded. Norway’s defences thus contribute to NATO’s stabilising and conflict prevention capabilities. At a time when many of our allies are trimming back their defences, as Defence Minister I feel this responsibility particularly strongly.

In conclusion, therefore, let me focus especially on a central element of the deterrent threshold. An Air Force equipped with modern combat aircraft is a prerequisite for the establishment of a deterrent barrier against aggression. We therefore have to give this high priority. Just as we gave priority to the frigates and corvettes during the past decade. And just as we have consistently given high priority to the modernisation of the Army.

That is why the acquisition of new combat aircraft will be a recurring theme in the coming Long-Term Plan. This is because combat aircraft are crucial to the dimensioning of the remainder of our defence structures. And because Norway cannot risk having an Air Force without effective combat aircraft.

It is vital that we share this perspective. We cannot afford to fall behind or to create a gap that our successors will have to strive to fill. We must have armed forces, equipped with the most modern equipment available, that are worthy of a place in the front rank. The Armed Forces are a knife that has to be kept sharp.

Now and then I hear someone say that we cannot afford to purchase the F-35 because it may weaken the Navy or weaken the Army. My response to this is simple: We are not purchasing the F-35 for the Air Force, we are buying it for the whole of the Armed Forces. Without control of the air space, both the Army and the Navy are vulnerable.

Nor did we purchase the F-16 to be kind to the Air Force. There was just one single reason why we at that time purchased 72 F-16 aircraft. That was because Norway needed these aircraft in order to exercise its sovereignty in the North and to participate in the Alliance’s collective defence.

We will recall that this was a defence purchase that shattered the financial limits that we had become used to. In fact the purchase of the F-16 had a greater impact on the national budget than the F-35 purchase will have in the coming years. Thorvald Stoltenberg, who played a central part in this decision, both as State Secretary and later as Defence Minister when the F 16 was chosen in the ’70s, says there is nothing new under the sun. Today’s combat aircraft debate is being sewn on the same last. Also at that time, figures for the cost were the subject of much dispute. And then, as now, there were tough discussions about the number of aircraft and their disposition. Apparently competent people doubted that anything would come of the F-16, or even whether it could fly if it was built. Some claimed that the wings would fall off. Well, there is something special about combat aircraft. They were a hot topic then and they are a hot topic today. That is just the way it is.

Among those who have followed Norwegian defence and security policy, I believe there are very few who would claim that the Nordli government, Rolf Hansnes and Thorvald Stoltenberg took the wrong decision. Today most people agree that it was a far-sighted decision. I would like to think that the next generation will be able to say the same about the decision we have taken.

We are aware  that the investments we will be making are heavy tall for our country.  In addition we have to develop a base structure that will stand the test of time. So it is important that we make sure we arrive at the best solution. We cannot live with solutions that are second best. We also have to remind ourselves that we are not buying the F-35 for just one part of the country. We are buying it for the whole of Norway. Let me, however, make one thing quite clear: irrespective of where the aircraft are to be located, the most important tasks for these aircraft will be in the northern areas.

Therefore we must also ensure that we have an effective base structure capable of underpinning these aims. As I see it, it is about the choice between putting in more flying hours or salting away funds from the defence budget to operate resource-intensive bases. It is about giving operational capability priority over increased expenditure on base and support structures.

Our choice will, not least, be about this. We have to ask ourselves if we should give up the benefits of scale that we gain though the shared use of, for example, buildings, support services and skills at one and the same location. And we must also ask ourselves how appropriate we think it is to make use of public funds on investments at two bases rather than one.

Our answers to these questions will have a bearing on the further development of the whole of the Armed Forces. When I have to weigh this up, I do so in the context of a Government that takes responsibility for creating a balance for future generations. If we give something to one area, we have to take it away from somewhere else. This is the course advocated by the Chief of Defence. A responsible government will make the same choice.

Conclusion

Ladies and Gentlemen,

As Oscar Wilde once said: “What is a cynic? A man who knows the price of everything and the value of nothing”.

In a Europe bedevilled by economic challenges, it is easy to be a cynic. It is in times of economic downturn that short-sighted policies are easy to turn to.

We know that defence policy is about taking the long view and the ability to deliver if needed. It is about taking responsibility – and looking beyond one’s own horizons.

It is, not least, about understanding the mechanisms that apply in a rapidly changing world. Almost exactly one hundred years ago, the British writer and journalist Norman Angell postulated in his book “The Great Illusion” that economic independence, higher levels of education and new technology would make war not only futile but quite simply impossible. In any case a war between modern industrialised countries would be over in a very short time. This was written in 1910, just a few years before the shot fired in Sarajevo led inevitably to the First World War. The book was good but failed in its predictions for the future. Just as far from the mark as Prime Minister Gunnar Knudsen’s utterance in that same year that there was not a cloud in the sky from a global political perspective.

We have learned that the world is undergoing rapid change. We know that we can be drawn in directions that were thought impossible only a short time ago. No-one was able to foresee the fall of the Berlin Wall. Nor could anyone foresee 11 September 2001, or that by 2012 our forces would have been engaged in Afghanistan for a decade. Nor could they have predicted that Norwegian fighter aircraft would be helping to protect Libya’s population and contributing to the fall of Muammar Gaddafi. And there is no-one who can predict how the world around us will look in five, or in 10 or 15 years’ time.

That is why we must have a strong defence and a responsible, realistic foreign and security policy.

That is why we have to find solutions jointly with like-minded countries.

And that is why it is once again time to make those decisive choices.

Yes, a national defence  has a certain price but a still greater value, both today and for future generations.