1. Introduction

Your Majesty, Generals and Admirals, honoured guests,

"Even the heavens wept," the papers told us, when soldiers and their officers marched out of the Old Town in Fredrikstad for the last time, last summer.

"Even the heavens wept".

And it was a sad moment for many when the ensign at Oscarsborg was hauled down. Yes, it is sad – for us all, whether in uniform or not – when the Services close a fortress, a garrison, an air station or any establishment with defence traditions.

I can understand that many will ask how our Armed Forces can abandon this place or that.

But would I be doing my job, as Defence Minister, if I were to seek to preserve everything that has gone before?

We will take care of our fortresses.

We will respect our history.

We will preserve the traditions of our Armed Forces.

But we cannot, for sentimental reasons alone, continue to embrace a defence structure outstripped by a changing world.

If we want a defence relevant to future needs, our starting point must be the world as it is today. We have witnessed the emergence of a new generation of challenges to our security. These new challenges in turn call for a new generation of defence capabilities.

It is perhaps a triviality to say "Look, the Cold War is over!" but it is far from trivial to remind ourselves that the nature of the challenges facing our Armed Forces has changed. It is a sensible defence policy – a sensible security policy – to ensure that our defence resources will be in good shape to meet and deal with these new challenges.

And it is a sensible policy to make sure that Norway’s Armed Forces are not found lacking in relation to those of our allies. It is primarily our allies in NATO that we shall be working with. It is their forces that we shall be operating with – both in Norway and abroad.

So we must not find ourselves in the same situation as Poland in 1939 when, because modernisation had been neglected, the army sent cavalrymen on horseback to do battle with tanks!

No war has ever been lost because of too much reorganisation. But there are countless examples of crushing defeats because of a failure to reorganise enough.

We must learn from history. We must be in a position to tackle the unforeseen. That is just the point.

It is for this reason that we are adapting to the far-reaching changes in the international situation.

It is for this reason that we are investing in a modern, flexible defence structure capable of undertaking the widest possible range of missions.

And it is for this reason that we must invest in quality and modern military capabilities for our Armed Forces.

To believe that old-style brigades with large numbers of footsoldiers and armed with last generation weapons can withstand an opponent equipped with modern high technology weapon systems – that is wishful thinking!

The reason for this introduction to my New Year address to the Society is that we have now completed the first year of this 4-year period. Far-reaching changes are under way and during 2002 we have in many places seen the consequences of our political decisions become reality.

2. A change of course – the new Defence

More will follow in 2003. The good ship "Defence" is in the process of changing course. This is causing some reaction. Reactions almost of sadness in many who had become used to the old course. My message is, however, crystal clear: This change of course is essential!

The connection between what we do at home and what we do in the wider world is all important. That is why our military presence in the North is attracting increased political interest, not the reverse. But I will come back to that.

My main message today is that we are on course for a better Defence!

Yes, our Forces will be smaller than before.

Yes, they will operate from fewer locations than before.

Yes, there are major organisational changes under way.

But we are on the way to achieving modern Forces adapted to the changing threats of today’s world.

So we can accentuate the positive! The Armed Forces have shown us here at home, our allies and the world at large that we can hold our own amongst the best. The defence budget is on the way up – 2 billion kroner more in just over a year, after a decade of cuts and reductions. Investment in new materiel is increasing. The ship is moving ahead.

And when it comes to our most vital resource – our men and women – the quality has never been better. The officer candidate schools have more applicants than ever. And the system of military service gives the Armed Forces access to the best of Norwegian youth. The Forces provide an exciting and challenging environment in which to work.

And we need the best.

Without high quality – in both men and materiel – all of us here in this hall would indeed have good reason to worry.

And to you who work in Defence and in the Armed Forces: Without your contribution, and without your belief in what we are doing, we simply would not be able to achieve the ambitious aims that we have set ourselves.

All of us face even tougher demands. Even with the increased funding allocated to defence, we are expected to get still better value from the billions that we spend.

The requirement to maintain close and continuous contact between the political leadership and the Service chiefs – particularly where crisis management is concerned – is easy to appreciate and clearly necessary.

The requirement for high mobility and deployability – and for full interoperability with our allies – is absolutely fundamental.

And the requirement to be able to react rapidly with flexible and accessible military capabilities when the need arises – at home as well as abroad – is of decisive importance.

And on top of all these requirements there are the major organisational changes that have been agreed.

Headquarters Defence Command Norway is being disbanded and replaced with an integrated Ministry of Defence manned 50/50 by civilian and military personnel. In addition, we shall also have a new Defence Staff.

Defence Command North Norway and Defence Command South Norway have been abolished and replaced by Joint Headquarters North in Stavanger.

Our reorganisation has a clear parallel: Just 25 years ago we had to wait months to have a telephone connected. At that time Televerket had hundreds of manually operated exchanges spread throughout the country. But that was not the kind of telephone coverage we needed – we needed a modern telecommunications network.

Today Norway’s telecommunications network is one of the most advanced in the world. But the manually operated exchanges have gone for ever.

That is how it is with the Armed Forces today. We no longer need garrisons and buildings all over Norway. That would mean that the entire defence budget would be needed to run and maintain them with nothing left over for "defence".

What we need are modern, well-equipped, flexible and accessible military forces that can be deployed wherever – and whenever – they are needed.

Then we shall have a good capability for national crisis management.

Then we shall have a good capability for fulfilling our NATO commitments.

And, then we shall have a good Defence that is also well able to deal with unforeseen threats or surprises.

It should be remembered that all our principal allies are focusing on advanced, readily deployable high readiness forces. That means that they too can be made available wherever – and whenever – they are needed, including here in Norway if the need should arise.

The Armed Forces must adapt to match the challenges posed by today’s new threats both to Norwegian sovereignty and to international peace and security.

We have to live with the consequences that flow from the steady erosion, in a global context, of the distinction between national and international security. And because Russia today does not pose the same military threat to Norway as did the former Soviet Union, we now have a freedom of action that allows us to address other threats to our security – including threats that may arise far from our own borders.

This is forward defence of Norwegian security.

Our participation in the Balkans has been, and remains, directed towards the defence of European security interests, thus constituting a forward defence of Norway.

Our contribution to the operations in Afghanistan are about combating the global threat of terrorism, again a part of the forward defence of Norway.

International terrorism respects no borders. Manning our old border posts would be of little use against such forces.

Terrorism and other asymmetric threats are like streams flowing down to the sea – they take the path of least resistance. So we in Norway too, must ensure that we are equipped to defend ourselves – actively and passively – against such threats.

There is another aspect. That of the Alliance. The obligations of NATO members are two-way. During the Cold War, the defence of Norwegian territory was the most important contribution we could make to the security of the Alliance. That is no longer the case.

Now we must contribute to NATO operations and international security not only in Norway but in other areas, in some cases outside Europe. This poses a range of new and different demands on the organisation, equipment and training of the Armed Forces.

NATO is, and will remain, the cornerstone of Norwegian security.

So we must contribute actively to ensuring that the Alliance remains both strong and relevant.

So we must contribute actively to ensuring that the United States continues to believe that its interests are served by allied cooperation through NATO.

So we must contribute actively to equitable burden-sharing – the distribution of responsibility and tasks – within the Alliance.

I am often struck by the way in which some people who, while being advocates of a strong NATO, at the same time look back almost with nostalgia to the days of the Cold War and the Armed Forces we had at that time. But those Armed Forces would not be able to contribute realistically to keeping NATO relevant, now that the "Wall" has gone and the world has changed in consequence.

If all the Allies had insisted on keeping NATO as it was at that time, the Alliance would today be an irrelevance, a museum, a mere relic.

Could it perhaps be the consequences of the current restructuring process here at home that lies behind the "Cold War nostalgia" that we can sometimes glimpse? It is painful for some to depart from the comfortable defence organisation as we knew it. But the pain must never be allowed to cloud the realities.

Let me therefore sum up three hard realities.

(1) Norway possessed an unusually extensive national defence organisation which had been built up over an early phase of the Cold War. But we never had to pay for it ourselves.

Norway would contribute forces produced through the normal process of conscription and by mass mobilisation. The capital costs, on the other hand, that is the cost of weapons, materiel, facilities such as airfields and other defence installations, were paid for largely by the United States and NATO.

Today’s modernisation is costly, and we are paying for it ourselves.

(2) The second fundamental reality is that the military sphere has been completely transformed. The day of the massed armies – Napoleon’s legacy – is long gone.

In the past, military defence was personnel intensive. It cost relatively little to equip a soldier. Now the reverse applies. Defence has become capital intensive. Behind every soldier in a modern defence force, there is a huge investment in training and technology.

Modernisation therefore means fewer Service personnel than in the past, and fewer units. This is true for all countries embarking on the modernisation of their defence forces. It is true for the United States. It is true for Russia and it is true for Norway.

Is a smaller, more capital intensive Defence worse than a Defence which is large and personnel intensive? Back in 1991 the Gulf war made the answer clear. Saddam Hussein’s army of a million men had no answer to far smaller forces backed by high technology.

When the difference in quality in terms of military technology is too great, the balance can never be redressed simply by bringing in new legions of footsoldiers!

(3) A third reality is that, as long ago as 1985, we already had a good idea of what it would cost to modernise our defence structure as it then existed. The 1985 Defence Study came out with a proposal for modernisation over a 15 year period, the cost of which would necessitate an increase in the defence budget of 7% in real terms for the first eight years and 6% in real terms for the next seven.

Defence funding of this magnitude was beyond the bounds of realism – even during the Cold War.

The 1985 Defence Study was quickly consigned to a desk drawer. Today it has been forgotten. But the dream of a ’60s-style defence structure lives on in some hearts.

But because modern, high technology military capabilities are so demanding in terms of capital investment, "new" Armed Forces – involving a military transformation – will entail both huge investment and major organisational changes. So operating costs must be cut and the organisation streamlined.

Having two garrisons if we can manage with one is no way to provide extra money for the "sharp end" where it is needed. The same applies to military airfields, local and regional command headquarters etc.

Money saved is money earned. And money earned means money to invest in the future, more real defence, more security. So simple and yet so difficult. But we are moving ahead. The good ship Defence is now turning onto its new course.

We must therefore stop sadly sucking our teeth.

We know what we want and we know what we have to do.

I have three principal overall aims in view for the Armed Forces. As Defence Minister I cannot achieve these aims on my own. We all have to pull together. And we all have to pull in the same direction.

Everyone – from conscript private to Chief of Defence, whether he or she serves in the Army, the Navy, the Air Force or the Home Guard, in the Ministry of Defence or in the defence agencies or in the field, everyone must make these aims our common goal:

Firstly: Norway must have a modern defence, adapted to today’s needs and with a balance between the structure and the funding available to finance it. That calls for unwavering concentration on the restructuring.

Secondly: In those areas on which we focus our efforts, we must be up there amongst the best in NATO. As a small country we cannot expect to do everything, or to be able to field many large units. But the units that we do have must be top quality.

Thirdly: The Services must be able to recruit the best. To do military service, train as an officer, wear the uniform – that must be a sign of quality and credibility.

I am certain that we can succeed in achieving these aims. But it means that we have to look forward, not backwards. What was, was. What will be, that we have to create.

There are many eloquent speakers in this hall. But may I be permitted to remind you of what the former British Prime Minister David Lloyd George once said: "The finest eloquence is that which gets things done!"

3. At home versus abroad

Some contend that out international involvement is conducted at the expense of our defence activities at home.

That is not correct.

In the first place: Norway’s security is not a purely national matter. Norwegian security is an integral part of European and international security – whether we like it or not.

In the second place: We are not cutting back on the Armed Forces’ activities in the North. On the contrary, we are increasing them.

In 2003 the level of naval activity, according to current plans for the Coastal Fleet, will be higher than last year – in fact higher than for a very long time.

-The intention is that HNoMS Valkyrien, with its towing and recovery capability, will spend more of its time in North Norway. This will be of substantial benefit from a readiness point of view.

• The time during which Royal Norwegian Navy frigates are present in the area will be extended from 8 to 26 weeks.

• The main Coast Guard fleet will be strengthened by the introduction of a seventh vessel.

• Norway’s naval presence in the north will be further augmented when modifications to all 14 Hauk Class MTBs have been completed.

• When the new Skjold Class MTBs and new frigates come into service, naval activities in the north will be strengthened still further.

And, in the course of January, five out of six Orion patrol aircraft will be fully operational.

Two major exercises, Joint Winter 03 and Flotex 03 will also be held in the north during 2003.

Military activity in North Norway will also be strengthened as a result of an ambitious programme for allied training in Norway. A total of 320,000 man-days of training for units from other countries are scheduled for 2003, mainly in North Norway.

All this means a notably high level of Norwegian and allied activity in North Norway and our other northern regions. While our proximity to Russia may be of less strategic importance to our allies that it once was, we now have greater strategic importance as a unique training and exercise area. Few locations in Europe are as well suited both to joint operations and to exercising the practical aspects of interoperability.

And what, one might ask, is it that makes our allies so interested in training in Norway, with Norwegian forces? It is not just the rugged and challenging terrain and the excellent training facilities. Through our military involvement in international operations in Afghanistan and Kosovo, our allies have seen for themselves that Norwegian forces make ideal, and relevant, partners to train with. They know that they will find it rewarding. And the same is most definitely true for our Norwegian forces.

In sum this amounts to increased Norwegian activity, and an increased allied presence, in the north. Ørland – the location for NATO Air Meet, Bodø – with its main air base for F-16s and the headquarters of Regional Command North, Inner Troms – home of the Army’s "force pool", Halkavarra with the Garrison in Porsanger, the Finnmark Border Guard, Ramsund and Olavsvern. These add up to a fantastic composite resource on which to base joint training and further transformation.

So it is certainly not the case that our involvement in Afghanistan and Kosovo is at the expense of our military presence here at home and in the northern regions.

Our contribution to international operations is no cuckoo in the nest, eating into the agreed allocation of 118 billion kroner. On the contrary, the plan is to allocate 900 million kroner annually to international operations abroad, a sum that is actually smaller than we have seen for some years. Increased funding for defence, combined with less spent on international operations – that actually boosts national resources. And that is a fact.

Furthermore, the experience gained from our participation in Kosovo and Afghanistan, and from increased cooperation with our closest NATO allies, actually provides the basis for an increased presence, and a higher level, of military activity, in the north.

There is a strong and definite connection between the part we play abroad and what we do here at home. Each benefits from the other, and it is time that this sinks in.

4. Important tasks

2003 will be an exciting and challenging year. I should like to summarise some of the most important tasks that we have to face and carry through.

a) The top echelons of the defence organisation will become leaner and more effective. With closer coordination between political and military leadership. The organisational structure will be flatter and more modern. These are consequences that flow from the resolutions endorsed by the Storting in June last year.

The new, integrated Ministry of Defence becomes a reality in August. And until a new building at the Akershus Fortress is completed – blending with and becoming part of the Historic Buildings – the Ministry will occupy existing building in the Fortress area.

When a new building is ready we shall have a modern Situation Centre where all the threads – political as well as military – can be pulled together for effective crisis management. This is something that we lack today..

Locating the integrated Ministry at Akershus means that a military presence, and full use of the Fortress area, is assured for the future – so continuing and building on the history, roots and long traditions of the Armed Forces.

And co-location with the new Defence Staff will, together with the National Defence College, the Armed Forces Staff College, the Institute for Defence Studies and the other defence agencies at Akershus, create a centre at which strategic-level decision taking, academic knowledge, military experience and professional expertise come together with all the benefits of synergy – at Akershus.

b) Another important challenge for 2003 will be to find Norway’s place in the new Allied command structure. At the Prague Summit it was decided that NATO should continue to have two strategic commands, one in Europe and one in North America.

One of these strategic commands, the one based in Europe, is to head the operational chain of command for the whole of NATO and will be designated Allied Command Operations.

Under Allied Command Operations there will be two joint operational headquarters, one in the south and one in the north, each with its component headquarters for air land and sea operations.

Such a new and streamlined operational chain of command will probably mean the closure of both the existing third-level headquarters at Jåtta and the Allied Air Control Centre at Reitan.

In any event it will mean that the NATO presence on Norwegian soil will differ fundamentally from what we have had in the past.

Much interest is therefore centred on the other Strategic Command, to be located in the United States at Norfolk, Virginia. It will be known as Allied Command Transformation, and will be responsible for "transformation" of the Alliance’s military capabilities.

Military transformation embraces the development of concepts and doctrines, force planning, education, training and experimentation. The challenge is not least to develop means of combating opponents employing asymmetric warfare – so-called fourth generation warfare.

Military transformation embodies activities designed to give us wholly new capabilities which, in parallel with modernisation, will enable us to develop and improve further the capabilities that we already possess.

If only some Allied nations were to commit themselves to a process of comprehensive military transformation while others were to hang back, NATO forces would no longer be interoperable.

Here we already have a transatlantic problem in that we European allies are lagging behind the United States in terms of development.

The new Allied Command Transformation will also have a presence, a "substantial photocopy", in Europe for the purpose, not least, of strengthening the military ties between the United States and Europe.

It is important to make use of both American and European competence and it is also vital to ensure that transformation is actually carried through in practice on both sides of the Atlantic.

Just how this European "photocopy", or the European commands, will be linked up under Allied Command Transformation in Norfolk, Virginia, remains to be worked out. But some kind of central link with Jåtta in Stavanger is a real possibility.

Of course we should like to see as substantial a "photocopy" as possible in Norway, and we are working hard to show that Norway would be a very good choice for the Alliance.

For example, a headquarters with responsibility for joint education and training in NATO would fit well with our national headquarters in Stavanger. Norway can offer excellent training facilities for land, sea and air forces – especially in North Norway.

This is a solution that would be good for our allies, it would suit us well and be of particular benefit to North Norway. Much of my time between now and the NATO Defence Ministers’ meeting in June will be devoted to ensuring that Norway will play as central a role as possible in the new command structure.

We must all pull together on this – in the MOD, HQ Defence Command, Joint HQ North, the NATO delegation in Brussels and our people on the Military Committee – everyone.

We are certainly not at the finishing line, we are only on the starting blocks.

Regardless of what is agreed at the NATO ministerial meeting in June, Norway must prepare for military transformation here at home – both in terms of competence and organisationally.

We must have "battle labs", like the Norwegian Battle Lab Experiment (NOBLE) at Bodø Main Air Station, we must have joint training with allied units like the training sessions we now run in the north, in fact we must focus on "joint" aspects in all that we do. Where technology is concerned, we must place the main emphasis on interoperability, on ensuring that our forces and those of our allies can "talk to one another". Only through the development of common concepts and doctrines, interoperable materiel and joint training can we work efficiently together in an operational setting.

We have to absorb the experience gained in practical operations and put it to use in our training – and vice versa. We must develop our doctrines as rapidly as the course of events requires.

It is a question of grasping the concept of military transformation.

Because it is here to stay.

It is going to be an integral part of the Alliance’s future activities.

It is the practical embodiment of what has been termed the Revolution in Military Affairs, with network-based defence as a central concept.

Our military transformation will have to be achieved through a good combination of preparation and direction from above with creativity, renewal and development from below, both nationally and within the Alliance.

As Norwegians we must be prepared to make an active contribution to the work of the Alliance in this field. We must be ready to learn from our allies in matters where they are ahead of us, and we must be able to implement solutions which have been agreed within NATO.

If we do not measure up in these ways, our service units will not be capable of operating jointly with units from other service branches, or indeed with allied units – either in Norway or abroad.

The integrated Ministry of Defence, the service colleges, academies and schools, and our operational units, will all have an important part to play in this transformation here at home.

The Joint Headquarters in Stavanger, the Defence Research Establishment at Kjeller and the Armed Forces Schools Centre at Akershus Fortress may also have increased parts to play in their various but complementary fields.

Creativity, and the ability to think innovatively and in a future-oriented way, will determine which role each can best play.

Our military transformation will constitute an important part of our long-term planning. During the course of 2003, we shall be preparing the next long-term planning document.

c) Work on the Chief of Defence’s Military Study is already well advanced and the report will be issued in late autumn this year.

I am very well satisfied with the ongoing cooperation between the Ministry of Defence and Headquarters Defence Command in the work of preparing the report, and in a year’s time, when the next long-term Proposition is being prepared for submission to the Storting, this will be taking place in an integrated Ministry.

d) At the NATO Summit in Prague we all made firm commitments to give urgent attention to the improvement of our countries’ military capabilities – the so-called Prague Capabilities Commitment.

This action will be followed up during 2003, together with the formation of the Alliance’s new task force, to be known as the NATO Response Force.

Some of the new capabilities will be realised during the course of the current planning period, while others must wait until the next.

e) In future years we also want to strengthen cooperation with our closest allies. In this context the United States and the North Sea countries – the United Kingdom, the Netherlands, Germany and Denmark – occupy a special position. This cooperation, referred to as "the North Sea Strategy", has both a transatlantic and an European dimension.

The North Sea Strategy entails increased investment in multinational solutions involving procurement, operation and maintenance, strategic transport, logistic support, command and control systems, education, training and exercising as well as operations – for all the Armed Services.

The North Sea countries share largely coincident security interests and cooperation between the countries, both culturally and politically as well as militarily, is excellent.

The North Sea Strategy does not exclude the possibility of close cooperation with other countries. During the 1990s, for example, cooperation between the Nordic countries has gained in importance, not least in Kosovo.

We shall also be following up NATO’s decision to begin accession talks with a group of countries aspiring to full membership and will do our best to help prepare our new allies, not least the three Baltic States.

f) Norway will support a division of roles and cooperation between NATO and the EU. The agreement reached in Copenhagen means that Europe will avoid having to waste money on duplicated structures while at the same time the EU will assume a more concrete significance in the development of European security policy. That poses a challenge to us as "outsiders".

g) We will be following up the work of the NATO-Russia Council and will work hard towards the objectives of a deeper partnership between NATO and Russia and more substantive cooperation in the NATO-Russian Council. Only in this way can the Council preserve its value.

5. Conclusion

Your Majesty, Generals and Admirals, my fellow guests.

I should like to close by underlining three key points:

• We do have a strategic vision for the Armed Forces which is based on the threats of tomorrow and which binds us inseparably to our allies through an evolving and relevant NATO.

• We do have a plan for how this vision can be transformed into real and relevant military capabilities.

• We do have the political will to implement this plan, and in June last year we obtained a broadly based majority in the Storting in favour of a four-year strategy firmly based on a predictable, and increased, level of defence funding.

And we are in full swing with the plans for the next period, post 2005.

I am proud of what the Armed Forces have achieved.

I am proud of the ambitious and single-minded course on which we have embarked.

I am proud of all who work for Norway’s defence.

And they have every reason to be proud of themselves.

This last year has been both demanding and very hard work. That is something that there is no reason to hide. For me it has been a fantastically interesting, motivating and rewarding time, even though the headwind has gusted a little strongly at times.

I hope that everyone who works in Defence – whether in uniform or not – can experience the same conviction: that working for the Armed Forces really is rewarding. Then we can certainly withstand a little rough weather en route.

In this address, I have been speaking to every single member of the defence organisation, just as much as I have been speaking to you sitting here.

I have also offered some thoughts to weigh against nostalgia for the way it was.

The restructuring of the Armed Forces – the military transformation on which we are embarking – is not a move away from something which we would rather have retained. It is a re-shaping into something new and better.

Restructuring has its price. Some changes are hard, and perhaps sad, for some. But let us all focus on what is most important – on what it is that we want to achieve.

To bring about change requires enthusiasm.

We are moving ahead. We need full power to reach our objectives. That asks a lot of all our officers – and it means that all must pull together.

As a former officer of the General Staff and lecturer in strategy and the history of war at the Military Academy expressed it in 1914: our officers must possess "the clarity of thought of a mathematician, the imagination of a poet and the enthusiasm of an apostle".

Thank you for your kind attention.