Minister of Defence Dag Jostein Fjærvoll

Defence at the Crossroads on the Threshold of a New Century

Oslo Military Society, 4 January 1999

Your Royal Highness – honoured guests and members.

After a Christmas celebrated in peace and tranquillity, may I take this opportunity to wish you all a happy and prosperous New Year. With the advent of the year 1999 we are approaching a marked divide in our reckoning of time. It gives us cause to reflect on the great triumphs – and tragedies – that have taken place over the century, and the millennium, on which we shall be able to look back in barely a year's time. At the same time we cannot but feel a sense of uncertainty combined with hope and belief in what the next century will bring. This applies equally to the present situation and future prospects for the Armed Forces and this is the theme I have chosen for my talk this evening.

I have chosen to call my talk " Defence at the Crossroads on the Threshold of a New Century". It has been said that the future is a country for which we have no map. Irrespective of which way we choose, we march forward through changing surroundings. To be effective we have to adapt to the new surroundings – to demonstrate the ability to evolve and develop. In the course of my talk I shall be focusing on the reasons for the choice of the way ahead that must be taken and, in some areas, indicate what in my opinion is needed by way of change and development in order to meet the challenges that the future will bring.

During the cold war era, the aim of security policy was to achieve a stable balance of power in Europe. Today one might say that a stable security situation is rather a necessary means of ensuring the continuation of the trend towards increased cooperation and integration. For NATO this has meant a transition from the primary cold war objective of counterbalancing a concrete military threat to ensuring, through collective military strength, political freedom of action for the international community. Collaboration within NATO continues to be characterised by a process of dynamic evolution, as witnessed by the fact that the restructuring of the Alliance is still far from complete. The year 1999 will be an important and defining year for NATO. The summit meeting of heads of state and heads of government in April will mark the Alliance's 50th anniversary but it will also mark out the course for NATO into the next century.

The Partnership for Peace has developed to become an important forum for practical collaboration on security-related matters. There is, nevertheless, a clear need to carry this work into a more operational phase, not least for those countries wishing for closer association with NATO. From Norway's side, we will make every effort, both bilaterally and through NATO, to improve the situation of the partner countries in the field of security policy and thereby contribute to the strengthening of European security more generally.

In the development of European security cooperation it is important to strive for the best possible coordination and distribution of responsibilities between the various bodies concerned with European security. With regard to the relationship between NATO and the Western European Union , much attention has in recent times been focused on the development of ESDI or European Security and Defence Identity. Norway sees a need to strengthen the crisis management capability of the European countries. We believe it to be of the greatest importance that this process should be pursued in a security policy "working partnership" between the WEU and NATO. The development of parallel security structures would be most unfortunate, both from a security standpoint and purely as a matter of resources. At the same time there is a clear need to look more closely at the institutional aspects of Europe's security structure. We have to acknowledge that if events move in the direction of the development of a common European foreign and security policy, Norway will face considerable challenges. I would go so far as to say that this question could prove to be of decisive significance to this country's future situation in the field of security policy. Only through participation in the relevant forums, in NATO and the WEU, can we help to ensure that our own interests are taken into account.

One aspect of this process within NATO which is of central importance in the run-up to this year's summit meeting in Washington is the review of the strategic concept. This concept must provide the political basis for the shaping of NATO collaboration and it constitutes the top-level policy paper governing the military planning of the Alliance. The updated concept will reflect the way in which NATO has adapted to the far-reaching changes in the security scene since 1991 when the concept was last reviewed. At the same time it is very important for Norway that the concept should confirm NATO's role as a collective defence alliance. And there does seem to be broad agreement about this within NATO. If NATO is to be able to develop further its collaboration with partner countries in matters of security policy, and continue to act as a stabilising element in the Euro-Atlantic region, this must be on the basis of a credible collective defence capability. If this capability were to be diminished, I believe that both NATO's internal cohesion and its diplomatic potency would suffer greatly.

There is also general agreement that NATO's new tasks associated with peace operations and partnership activities must be given more prominence. The precise balance to be struck between these new tasks and NATO's traditional tasks, however, remains to be clarified. The way in which these new tasks are to be formulated must also be clarified with regard, for example, to the kind of commitments that will be expected of member countries where crisis management and international peace operations are concerned. Because each situation will be different, and will involve different players, our primary wish is to be able to weigh up each situation on its merits before taking a view on possible Norwegian participation. The United States has put forward an ambitious proposal for a programme of shaping the Alliance's military forces in order to meet future challenges. The proposal addresses both the collective defence capability of the Alliance and those tasks which lie outside NATO's primary area of responsibility. For Norway's part we are in favour of NATO having the capability of taking on tasks of the latter type but we would not wish to see them accorded the same degree of commitment as the collective defence of the member countries. Our reasoning is that we see NATO's role as a collective defence alliance as providing the very foundations of its capability to carry out these other tasks.

NATO has, as we know, started work on the introduction of the new command structure. This is a very far-reaching process and is not due to be completed before spring 2003. Norway will form part of the new regional Northern Command with headquarters in Brunssum in the Netherlands. At the sub-regional level there will be separate commands for naval and air forces with joint organisations for the command and control of operations involving all service branches. Deciding on the division of roles and responsibilities between these two types of headquarters at the same level has been a difficult process. We have advocated strenuously that the joint headquarters at Jåtta should be allowed to retain overall responsibility for the coordination, command and control of any military operations in Norway or in areas close to our borders. I am convinced that the solution that we are arriving at will ensure that our national interests are well taken care of.

All the NATO countries have now ratified the declaration of accession for Poland, Hungary and the Czech Republic. These three countries will be formally inducted as members of the Alliance before the coming summit meeting, probably in March. As far as any further extension of Alliance membership is concerned, there is little likelihood of any further invitations being issued at the spring summit. Statements have been made to the effect that the Alliance should rather concentrate on the integration of the three new member countries. This is a view that has full support from the Norwegian side. There is, however, agreement that the "open door" policy should be continued. Any decision to invite further countries will be based on an overall assessment of the political and security factors involved. Norwegian interests suggest that this process must also include consideration of states in Northern Europe.

Relations with Russia constitute a central dimension of Norwegian defence and security policy. Norway's ambition is that priority should be given to contact and collaboration with the Russian military authorities, not least through the Partnership for Peace. Norway wishes to play an active part in the work of fostering links between Russia and the Western countries, including collaboration in defence-related areas. For the present, though, the economic crisis in Russia is complicating such contact and collaboration in the area of defence. The general lack of resources is also having far-reaching consequences for Russian defence, not least in the considerable changes it has necessitated in Russia's conventional forces. These changes have resulted in a shift towards relatively greater emphasis on the strategic forces. The strategic naval forces, largely located in Russia's Northern Area, will therefore continue to play a central military role in Russian defence.

The links between Norway and Russia in the field of defence and security policy are showing signs of positive development, exhibited for example in the now annual planning of measures for contact and collaboration between the defence ministries of Norway and Russia. On the other hand, however, I would not wish to gloss over the fact that disagreements do exist between Russia and ourselves in certain areas. This year, for example, Norway will be arranging an exercise in Finnmark. Units from allied and partner countries will be taking part together with personnel from various voluntary humanitarian organisations. Russia has so far declined an invitation to take part and has voiced its displeasure that exercises should be conducted so close to the Russian border. Another difficult area is the renegotiation of the CFE treaty where Norway and Russia hold conflicting views on the question of the Northern Flank, a subject of great importance to Norway.

The Report No. 22 to the Storting, Guidelines for the Activities and Development of the Armed Forces, describes the role of the Armed Forces as an instrument of national defence policy and defines the tasks with which the Services are entrusted. These tasks span the entire spectrum from peacetime to time of crisis or war and dictate a need for flexibility in the shape of the Armed Forces. When the Storting debated the Long-Term Plan, the Government endorsed this line. The agreement reached on this point means that the guidelines in the Long-Term Plan remain as a fundamental planning assumption.

The Report No. 22 to the Storting emphasises that the main tenets of our defence policy must be framed to allow for the constraints of a tight financial policy. The Government has stipulated that defence planning should proceed on the basis of funding at current levels for the first two years of the four-year period with an annual increase of ½ % for the last two years. The economic situation facing the Government at the time the 1999 defence budget was produced was – and still is – one characterised by low oil prices, severe financial problems for Russia and the countries of Asia and pressure on the Norwegian krone. The Government's aim is to stabilise the Norwegian economy and to bring about a reduction in interest rates and the choice of means to achieve this aim dominated the agenda when the budget proposals were being produced. And in their 1999 budget proposals the Government, as you know, therefore chose to undertake some severe belt-tightening. This means that some sectors of society – including the defence sector – must bear their share of the cuts in order to keep overall government spending within acceptable limits. As Defence Minister I am, however, glad that the Government deliberations and the agreement eventually reached in the Storting have resulted in the adoption of a budget which means that next year's funding for the Armed Forces will be largely in line with the levels proposed in the Long-Term Plan.

Throughout the Long-Term Plan and the Supplementary Report – Report No. 23 to the Storting (1998-99) on the Investment Profile for the Armed Forces – the Government has been concerned to pave the way for a balanced development of the Armed Forces in future years. The situation today is that a two-fold imbalance has developed over time both in the distribution of resources between running costs and investment and between the resources available and the tasks and structure of the Armed Forces.

The reasons why this imbalance has arisen are mainly that the Armed Forces have not managed to achieve their own aims with regard to greater efficiency and cost saving and that it has not proved politically possible to match the annual budget allocations to the aspirations of the agreed long-term plans.

Restoration of the balance in these important areas will be the most important challenge facing the Defence Establishment in the coming years. On this both the military leadership and the political administration are unanimous.

The first challenge is thus to find a reasonable balance between investment and the level of operational activity. The investment plans are vulnerable to operational developments and it is essential that Armed Forces operating costs are stabilised at a sensible level. In my view both the Long-Term Plan and the Supplementary Report signal unmistakably that we must persevere in devising and implementing means of reducing operating costs in order to relieve the pressure on funding in this area. I should like to illustrate this with a few simple figures. The Long-Term Plan envisages a reduced level of growth in the operating budget for the four year period 1999-2002 with the growth rate levelling out from 2003 onwards. If we assume an average growth rate in the operating budget of, for example, 1.5 % for the eight year period 1996-2006, this would entail supplementing the budget for operating costs as set out in the Long-Term Plan by almost 5 billion kroner. This represents about 40 % of the cost of the frigate procurement programme. That is why I attach such importance to ensuring that the operating budget is not allowed to drift in the wrong direction. I am convinced that there are still many stones to be turned in our efforts to keep operating costs under control. Work on these changes will call for determination and perseverance.

The second main challenge that we face relates, as I have mentioned, to the balance between the tasks assigned to the Armed Forces and the resources available. The Chief of Defence has, in his annex to the Long-Term Report, stated that the Armed Forces' principal mission – defence against invasion in one part of the country – cannot be sustained in the long term given the budget profile contained in the Report. He has given notice that, in the course of 1999, he will be looking more closely at the relationship between our aspirations and the financial constraints placed upon them. The question of exactly what is meant by "defence against invasion", i.e. level of ambition that is implied, will also form a central agenda item for a future Defence Commission. I do not, however, envisage the establishment of a new Defence Commission during the current planning period. Defence against invasion will therefore remain the governing factor although it may be necessary to undertake a more detailed reassessment – and perhaps an adjustment – of the content and consequences of this concept.

In order to maintain our ability to meet the new challenges that the future may bring, the defence organisation must continue to reshape and develop its range of activities. Boundaries between the Services or specialist branches must not be allowed to stand in the way of achieving solutions that give a more cost-effective organisation. Units must be considered in the light of their contribution to the achievement of our defence aims and not just for what they do as individuals. As Defence Minister it is my responsibility to fight for, and carry through, the politically difficult measures that are vital if our Armed Forces are to develop as the Long-Term Report envisages. And I am prepared to fight on, for as many rounds as it takes, both in the ring of regional politics and of course in the Storting, to ensure that we do achieve the principal long-term aims of our defence policy. In so doing I am also prepared to take decisions that may be unpopular in some quarters.

The preparation work that needs to be done before a decision can be taken on an organisational change often proves to be a very time-consuming process. Questions surrounding proposed changes often generate frustration and opposition, not to mention accusations of lack of understanding and respect for the views of others. The Ministry has therefore embarked on an assessment of possible ways of improving the presentation of military inputs and the Ministry’s own procedures for handling such matters. Important criteria for such improvements must include the reduction of unnecessary delays, the alleviation of unfounded anxieties, the creation of more rounded and unified assessments and a sharper focus on the quality of working methods and the data on which decision-making is to be based.

Large-scale organisational changes involve difficult and demanding processes. Some will say that the Defence Establishment now needs a period of peace and quiet in which to “gather itself” before marching on. In any forward-looking and vigorous organisation, however, structural development needs to be a natural process. We have to create a corporate culture which is capable of keeping the activity under control while still permitting a continuous process of development. Changes are often seen as threats when proposed by others. They only become opportunities when we ourselves take the initiative. It is therefore important that everyone involved in our defence organisation is empowered, and encouraged, to play an active part in preparing the way. For my part I regard this as my most important single task in the time that lies ahead.

The Armed Forces have experienced considerable changes in recent years, especially at regional and local levels. This has to continue but at the same time it is essential that we should focus more closely on the need for change at the highest levels of military command. This is necessary for the legitimacy of the process itself. We cannot continue to change the outer branches of the defence hierarchy while simply leaving the central command structure untouched. The Ministry of Defence, together with the Headquarters Defence Command, will therefore be carrying forward the work of auditing and refining the upper echelons of defence management. This includes the relationship between the Ministry and the military organisation of the Armed Forces, the location and role of the Inspectors General, our military command structure and the Materiel Commands. One might question whether the extent of the current management structure is reasonable in relation to the future shape of the organisation and its activities. It may, furthermore, be desirable for the Headquarters Defence Command Joint Staff to be better placed and equipped to carry out overall assessments on which to recommend priorities based on the principal missions of the Armed Forces.

Norwegian Defence is based constitutionally on the duty of every citizen to undergo a period of military service and so it will remain for the foreseeable future. We must therefore tend this system of conscript service with care and consideration in order to keep it in good repute. This does not mean liberalisation of all the various aspects of military service or exempting it from measures that will make it more cost-effective. On the contrary, I do not believe that it is possible to rationalise the activities of the Armed Forces without reflecting this rationalisation in the system of military service. We must therefore see how we can make the initial period of military service better, both from the point of view of its content and with a view to reducing the overall cost of the system. We need to discuss further the scope for differentiation in the pattern of service. This may not necessarily coincide with every one of the aims for the system of military service that we have set out in the Long-Term Report but it may be an essential prerequisite if we are to achieve the most important of them.

International operations form an increasingly important part of the activities of the Armed Forces. Because of recruiting problems last year, we decided to discontinue the secondment of a battalion to UNIFIL in Lebanon after something like 20 years service. There is, however, broad political agreement that Norway should maintain a substantial contribution to international peace operations in the future as well. The Ministry of Defence, in conjunction with Headquarters Defence Command, will produce a Report to the Storting on international operations. The report will address the question of how we can best organise and develop our resources, including personnel aspects with the emphasis on making the best use of what resources we have and on the transfer of skills and expertise. One political challenge in preparing the report will be to highlight the connection between our national and international capabilities. Without a robust national defence capability, we would not be able to make a real and lasting international contribution either quantitatively or qualitatively. Conversely, the knowledge and experience gained in the course of such service abroad will be of great benefit to individuals in their future jobs at home. We attach great importance to ensuring that the future arrangements for the generation of forces for international operations are closely integrated with our own internal structures. I have therefore asked for an assessment of possible sources, including 6 Division, for the production of manpower for international operations. The Report to the Storting is due to be submitted in May this year.

Participation in the NATO-led operation, the Stabilisation Force in Bosnia-Herzegovina – known as SFOR – is currently Norway’s largest and most important contribution to international operations. The present mandate for SFOR has no specific time limit but is subject to regular reviews which then form the basis for any adjustments. Norway has also been an active contributor to the operation lead by NATO and OSCE in Kosovo. The substantial contribution made by Norway to the OSCE verification force in Kosovo has been made possible through the support provided by the Armed Forces. Norway’s contribution to the work of NATO in connection with the Kosovo crisis has shown our solidarity with fellow members of the Alliance. At the same time our presence is a visible token of our contribution to international peace and stability more generally. Our involvement in the Balkans also extends to Macedonia. Last year the Government decided to meet the UN's request for an increase in our contribution to UNPREDEP. We have, since last year, participated in this operation with a rifle company which forms part of a Nordic battalion.

A few words, then, on our plans for defence procurement. In order to meet the aspirations of the Long-Term Report, the Government is planning to allocate some 55 billion kroner for the procurement of materiel for the Armed Forces over the period to 2006. In the course of that period a number of major projects, of military as well as political importance, are due to be started or carried through. The frigates are important to our surveillance capability and to our ability to exercise crisis management or act in support of Norwegian sovereignty in our territorial waters. Our capacity to fulfil these tasks in the Barents Sea is at present limited. Norwegian waters are rich in desirable resources such as fish and oil. Against this backdrop it is important that Norway ensures its political freedom of action in situations where our essential national interests may come under pressure.

These major materiel procurement projects cannot, however, be allowed to stifle all other investment in the Armed Forces. So it is vitally important that the projects are subject to continuous monitoring and close control. Another testing challenge lies in keeping abreast of international advances in technology. We need to espouse new technology both with regard to our own defensive capability and to enable us to remain an effective participant in international military operations.

It is one of our principal aims that Norwegian industry and the Norwegian economy should benefit to the greatest possible extent from future procurement projects. We must prepare the ground for those areas of industry that are regarded as critical to the satisfaction of our future needs. In many areas, the defence procurement authorities have helped to build up expertise through far-sighted and carefully directed investment in research and development for new materiel projects. We must seek to establish a framework of conditions which permits further development of these areas. The ongoing restructuring of the European defence industries will also have major repercussions for the Norwegian defence industry. Our aim is to contribute to the ability of Norwegian defence contractors to position themselves suitably in relation to the changing scene. In this connection the Ministry of Defence pursues an active economic and industrial policy. In 1995 we put forward an economic and industrial strategy for future defence procurement projects and last year we presented a national strategy for the Norwegian defence industry. And now we are working on the follow-up aspects of these strategies.

The Army's force structure, from an organisational point of view, is now largely in place. It will, however, take time to provide the various elements with the necessary materiel and to renew the main items of equipment as they approach obsolence. Further development will be aimed at creating the basis of a structure which is more flexible and which enhances the Army's capacity for rapid reaction.

Procurement of the Navy's new frigates will involve international competition and our choice will be critically dependent on both quality and price. I attach great importance to ensuring that there is no cost overrun for the frigate project – even if this means reducing the number of ships built. It would make no sense, however, to reduce the number of ships below five. Irrespective of whether a Norwegian or a foreign design concept is chosen, the spin-off for the Norwegian defence industry, and the benefit to the Norwegian economy, will be substantial. The frigate procurement proposals will be submitted to the Storting in the course of this year, mainly during the spring session.

In its Report No. 22 to the Storting the Government has drawn attention to a possible decision on the procurement of new Missile Torpedo Boats of the SKJOLD Class in the course of the period 1999-2006. A note representing the majority view in the Defence Committee’s report, however, expressed a wish that a decision in principle regarding series production should be taken as early as possible with a view to funding being included in budgets from the year 2000 onwards. Against the background of the limited freedom of action expected for the next few years, the Government takes the view that this will be possible only if additional defence funding is provided or if other projects are downgraded in priority. The Government’s planning assumption is now that series production of the MTBs will commence in 2003 at the earliest. This view is expressed in the Report to the Storting on the Investment Profile for the Armed Forces which is due to be considered by the Storting during this spring session.

The capability of the Coast Guard to carry out its tasks is due to be strengthened through the updating of the NORDKAPP Class patrol vessels and the procurement of a new ship specially strengthened for ice operations. The tight constraints of the 1999 budget have necessitated postponing this purchase for the present at least. The Government will be looking at a possible extension of this project with regard to any cost increase as well as the initiation of procurement in the context of budget year 2000.

During this period the Air Force will receive a boost in terms of aircraft quality through the purchase of new combat aircraft to replace the phased out F-5 and the F-16 aircraft which have been lost. Again, this project will be submitted to the Storting in the course of 1999. The planning phase of this project has taken account of tighter cost constraints and it may also be necessary to consider delaying phasing in if the budget assumptions of the Long-Term Report are not realised.

Let me turn to a few of the challenges facing the Services in the field of personnel policy. The policy of the Armed Forces in this area has been the focus of much attention over the last two years. First and foremost this has been due to the increasing flow of personnel with important skills leaving the Services, mainly because of the expanding civilian job market. The challenge has therefore been to arrive at a suitably integrated personnel policy and the indications are that we are well on the way to achieving this. Both the Long-Term Report and the Defence Personnel Handbook subsequently issued by the Chief of Defence show that we do take the question of personnel policy seriously. Able personnel with the relevant skills are essential if we are to make efficient use of our materiel investments. What remains is to ensure that this policy takes root in all branches of the Services, that is to say to turn our words into deeds. Judging from the feedback I have received both from the representatives of the personnel organisations and from the personnel branches generally, all the signs are that we shall meet with success.

Our civilian staff have from time to time reminded us that their position in the Defence organisation is less strong than that of their military counterparts. One of the reasons given is that there are only a modest number of civilians in senior management posts. It ought to be possible to be able to provide better career opportunities for civilians. I have therefore requested Headquarters Defence Command to identify which of the Defence organisation’s management posts could be filled by civilians.

Over the past year there has been discussion, sometimes heated, on the subject of officers’ participation in the defence policy debate. My own view is that I would welcome broader participation by officers in the debate on questions of defence policy and, indeed, on matters affecting society more generally. I believe that the officers, as a group within society, can enrich this debate. Of course officers, like any other citizens, must be free to exert their democratic rights but there are certain considerations that must be taken into account.

Many ask themselves just where the line is to be drawn regarding what views can be expressed and when it is acceptable to speak out on matters of defence policy. Such a line is not possible to draw nor, perhaps, is it desirable that it should be drawn. Nor are there any detailed rules regarding the rights of officials or public servants to make their views known on matters within their particular areas of work. It is a fact, however, that when commenting on questions of defence policy, greater care is called for on the part of Ministry of Defence officers and other members of staff, and of senior military officers, than in the case of other personnel in our organisation. Caution must be exercised in pronouncing on matters with a political dimension which relate to the area of work of the person concerned. It is obvious that when decisions have been taken, they must be treated with due respect. It is also a question of presenting the outward impression of a tidy organisation. But the processes which have gone into the making of these decisions must be as open as possible and must ensure that all relevant factors have been considered. All concerned must feel that their views have been given serious consideration.

Let me by way of conclusion return to my opening thesis. The future effectiveness of our Defence organisation, and the degree of popular support that it enjoys, will depend on our own ability to adapt to changing circumstances and situations in the world around us. With regard to where we should be heading – the objective of our activities – there is broad political agreement that Norway needs well-equipped defences characterised by their high quality and capable of performing their tasks both in peacetime and in time of crisis or war. We cannot afford anything else.

Future challenges will be many and various but in my view there are four principal areas on which we in the Defence Establishment must focus our attention. These are

• the development of NATO
• Norwegian participation in international operations
• Defence running costs including the two-fold imbalance
• investment in materiel and equipment development

The challenges we face in these areas, allied to the aspirations envisaged in Report No. 22 to the Storting, mean that the Armed Forces and the Defence organisation as a whole have many interesting tasks ahead. It is said that he who sees the future as a headwind is going in the wrong direction. Thus the motto for our Defence as we cross the threshold of the next century must be: evolve, adapt and develop.

Thank you for your kind attention.