Press Release

Date: 5 October 1998

The 1999 Defence budget

The Government’s Defence budget proposals for 1999 amount to NOK 23.9 billion which entails a nominal increase of 0.3 %. When adjusted to salary- and price compensation and changes in income, this does however entail a reduction in real terms just below NOK 600 million (some 2.5 %), when seen in relation to the resource basis that was presupposed in the Report (White Paper) to the Storting (Parliament) No. 22 (1997-98). Through a re-disposition within the defence budget it is suggested to provide international peace operations with an addition of up to NOK 220 million during the second quarter of 1999. Means to peace operations during the second half of 1999 will be suggested allocated as supplementary funds outside the framework.

Main aspects of the security situation

The dissolution of the earlier political blocs has eliminated the danger of a large-scale, co-ordinated attack on Western Europe in the foreseeable future, but it has also made society more susceptible to smaller armed conflicts. At the same time, the development has opened up new channels of contact and co-operation across earlier dividing lines. Uncertainty is nevertheless a dominating and probably lasting feature of the security situation.

Even though no concrete military threat is directed towards Norway today, we still need to maintain an effective and credible defence. Equally important is our participation in a broad international collaborative effort to maintain stability and a peaceful development in Northern Europe, and to resolve international conflicts and prevent new ones from arising.

Collaboration within NATO continues to represent the by far most important dimension of Norwegian security and defence policy. In 1999 the co-operation in the Alliance will to a large degree be marked by the summit meeting in Washington, D.C. in April. During the meeting NATO’s Heads of States and Governments will formally approve a revised strategic concept, new Member States will have joined the Alliance co-operation and the 50th anniversary of the Alliance will be duly commemorated. In addition, NATO will make decisions next year about the implementation of the new command structure. The relationship to Russia and the management of international crises and conflicts will also be put high on the Alliance’s agenda. In parallel with the security policy upheavals in Europe over the past decade, the orientation of the NATO collaboration has changed radically. The adjustments within and by NATO will probably continue. Norway supports this whole-heartedly, while we at the same time strongly emphasise that the core of the Alliance’s traditional collaborative effort be retained as a necessary precondition for an effective and credible military-political collaboration across the Atlantic.

In the northern region the development of the security situation is positive and stable, but the deterioration of the economic and social conditions in Russia may influence the security situation. The development in Russia is characterised by a lack of political continuity and by changing alliances between individuals in the Presidential Office and in the remaining political and economic top echelon. President Yeltsin’s sudden dismissal of the country’s Government both in March and in August 1988 reinforced this impression. This situation reduces the central authorities’ possibilities of carrying out a long-term, consistent and predictable policy. Different military sector interests, traditional thinking rooted in the Soviet era, and in particular the lack of economic resources still hinder reforms within the Russian defence. Nevertheless, the Russian defence has carried out very comprehensive changes during 1998.

The situation in Southeast Europe is unstable and partly explosive in the Balkans. There is no indication that the need for international peace operations and international crisis management will diminish in the foreseeable future. On the contrary, a possible new conflict in the Balkans may increase this need, perhaps especially the need for NATO-led operations.

The changes in our strategic situation, combined with the considerable uncertainty attached to future security developments, will require a broader-based and more flexible defence than earlier. The Defence Organisation remains the main pillar of the Government’s security policy and it must have sufficient capability to face a broad range of challenges in peacetime and times of crisis and war, nationally as well as internationally.

The budget’s main profile

The Government proposes to allocate NOK 23.9 billion over the Ministry of Defence budget. This entails a nominal increase of 0.3 %. The guidelines and main targets set out in the White Paper and the Recommendation to the Storting No. 245 (1997-98) about the future development and restructuring of the Armed Forces for the period 1999-2002 determine the principal priorities in the 1999 budget. The White Paper’s presupposed level of resource were aimed to maintain the 1998 budget level, except for expenses earmarked international operations. These operations required extraordinary allocations.

Norway’s economic situation however compels a reduction in public activity. When adjusted to salary- and price compensation and changes in income, this does entail a reduction in real terms of nearly 600 million NOK (some 2.5 %), when seen in relation to the resource basis that was presupposed in the White Paper. The decline is caused by a general framework reduction as well as the suggestion that the Defence Budget cover current peace operation activities in the first quarter of 1999. Early in the year the Government will make a proposal to re-allocate resources within the expense framework amounting to some NOK 220 million for the second quarter.

A suggestion will be made to designate possible expenses in the second half as an addition to the defence budget. It is the Government’s intention, starting with the budgetary year 2000, to comply with the resources presupposed in the White Paper.

On the basis of the above-mentioned reductions it has been necessary to considerably tighten up remaining parts of the operations budget. This is among other things because the White Paper puts great emphasis on our host-nation responsibilities toward the NATO exercise Battle Griffin. It is thus necessary to, on a temporary basis, reduce the period of initial service. This will be achieved through a combination of short-term measures such as a shift in the main call-up from July to October 1999, early discharges and possibly a reduction in the number of persons drafted.

It is necessary to adjust the balance between operating costs and investment. The operations situation makes it necessary to prioritise aspects within operations and maintenance that affect the accessibility of material and the selection of means to solve certain tasks. The Armed Forces must consolidate today’s operations level in order to accomplish large planned investments such as, among other things, new frigates and fighter planes.

The Government aims to continue the engagement in Bosnia and Herzegovina (SFOR), within the framework of a Nordic-Polish brigade in the U.S. sector in the northeastern part of the country. Resources have been earmarked until the first exchange of the forces. As a consequence of recruitment difficulties the Norwegian participation in the UN Interim Forces in Lebanon (UNIFIL) will be phased out by the end of 1998. The UN Security Council has decided to extend and expand the UNPREDEP mandate in view of the developments in Kosovo. Norway has been asked to participate and the Government will consider the framework for a possible Norwegian contribution.

In 1999 the NATO exercise Battle Griffin 99 will be the Armed Forces’ most important exercise. Here, U.S. Marine infantry exercise with prepositioned materials in Trøndelag. The exercise and training activity shall exhibit Norway’s capability and will to operate together with allied forces, and thereby demonstrate that Norway is a credible co-operation partner. The exercise Barents Peace will be the highest prioritised activity together with the partner nations, in the Partnership for Peace (PfP) framework. The Army and to some degree the Home Guard will raise the activity level concerning the refresher duty, while the Navy and the Air Force will reduce the activity in this field.

Following a comprehensive evaluation of the rescue helicopter detachment at Vigra, it has been found that the rescue missions originating there may be equally well handled out of Ørland. A continuation of the detachment is therefore not a cost-effective use of resources. Hence, the Government suggests to close down the detachment as of 1 January 1999. To strengthen the rescue readiness in the Oslofjord-region it is suggested to station a Sea King rescue helicopter at the Rygge Main Air Station as early as possible in 1999.

Tasks at sea will be given priority in the Coast Guard’s operations budget. The Inner Coast Guard will have an activity level equivalent to the framework of expenses that the Storting adopted for the budgetary year 1996. This means, among other things, that four of today’s seven vessels are taken out of duty. The number of gear protection cutters will be reduced from seven to five, one of which will be transferred to the Inner Coast Guard. The purchase of the Coast Guard vessel ‘Svalbard’ is being deferred.

In accordance with the Storting’s directions with respect to the White Paper, the effort to further develop the force structure of the Armed Forces will be given priority. The capacity to resolve the full range of the Armed Forces’ tasks are based on the quality and quantity of the force structure, its reactivity and endurance. New elements in the war structure will be sustained and procured, older and inadequate material will be phased out, and the adopted war structure of the Army and the Air Force will be established. The development of the Air Force’s war structure entails a change in its peace organisation.

The Navy’s regional organisation and force production is being evaluated, and the development of the role of the Home Guard continues. The planning and procurement of new elements in the war structure continues. In the establishment of the Army’s war structure, the restructuring of 6 Division is prioritised. Mobility and flexibility is being emphasised. The work aiming to co-localise parts of the Army and the Home Guard carries on.

In the Navy several procurement projects are essential, while older and inadequate material are being phased out. Several aspects of Navy activities on land are being evaluated.

The peace organisation will be evaluated with a view to effectuate the war structure and to strengthen prioritised areas of operation. Currently, change proposals in the Navy organisation are being worked on, as well as recommendations concerning future operations and ways to manage and organise the supply activities. The Ministry aims to present these matters to the Storting as early as possible.

The White Paper provides guidelines for the progress of the investment projects in the budgetary year 1999. The Ministry has therefore been intent on avoiding spending resources on or making commitments to activities that will not be carried through. There are no new prioritised material projects, ‘Category 1 projects’, in 1999.

The propositions concerning construction and building investments reflect the investment strategy and main priorities related to the restructuring. The national investment resources available will in 1999 continue or terminate previously commenced projects. NATO-financed construction and building activity in 1999 essentially encompasses projects already underway.

The White Paper spells out guidelines also in the area of personnel policy. Resolving the Armed Forces’ tasks in peacetime and times of crisis and war imposes high demands on the personnel’s expertise, continuity and experience. At the same time the Armed Forces must be prepared to compete in an expansive labour market. The random departure from the forces is still on the increase, and the want of personnel is noticeable throughout the organisation. The degree to which the Armed Forces succeed in recruiting, keeping and developing qualified staff is vital for the organisation’s quality and results. These challenges and demands must be met with a comprehensive personnel policy. The principal goal of the Ministry is to maintain a highly motivated personnel corps that has the competence needed to solve the tasks put before it. The basic elements of the personnel policy will be competence, career and equality, family, organisational evolution and the development of managerial skills.