The defence budget for 1996

P R E S S . R E L E A S E
The Royal Ministry of Defense

THE DEFENCE BUDGET FOR 1996

The defence budget for 1996 expresses a strong priority of the Armed Forces and reflects the Government’s determination to pursue the long-term objectives, says Norway’s Minister of Defence, Jørgen Kosmo. Altogether the budget amounts to 24.1 billion NOK, which represents an increase in real terms of 0.5% compared to the budget for 1995. The Government’s proposal for the 1996 defence budget implies that the development since 1992, with a reduction of the defence budget in real terms, has been turned around. Hence the Government retains its goal to realize the defence concept and force posture in case of war that was recommended in the Long-Term Report for the Armed Forces and approved by the Parliament (Stortinget).

Despite the substantial reductions in operating costs, the 1996 budget, as the previous budgets, does not undermine the basic principles on which Norway’s defence system is based, the national service included. The initial conscription period will become rationalized. This will provide substantial savings in terms of number of service days.

Measures to fight unemployment among soldiers who have concluded their military service remain a high priority, and the budget for adult education will be kept at the same level as in 1995.

The quality of education, training and exercises for the Armed Forces will be increased. Service by conscripts at one location only during the entire period of the draft, at the training units in North Norway, has led to improved quality of the war posture within training, education and exercises. Reduced average age for parts of the mobilization army has had a positive impact on the quality as well.

In its budget proposal, the Government has placed emphasis on keeping a relatively high level of exercises when adjusted for the number of service days and for the changes in the overall size of the wartime organization. For the Navy, the activity level in 1996 will be slightly over the 1993 level (the Parliament has expressed the opinion that the 1993 level for review exercises for mobilization units should be used as a guideline) and for the Air Force there will be a marked increase. According to plans, all Home Guard units with priority missions will be exercised; first and foremost, this regards units in North Norway and in the Navy and Air Force Home Guard.

For the Army, however, the activity level will be substantially lower in 1996 than in 1993. This is due to the fact that 1996 will be a particularly critical year in the transformation of the Armed Forces. The Parliament has in 1994 and 1995 approved a series of major organizational changes, for the Army in particular. To ensure a cost-efficient implementation, it is necessary to focus the activities in the Army on the transformation process. It will be necessary to employ a considerable number of personnel to prevent this decisive work from becoming delayed or stalled. Once these organizational changes have been carried out, the number of service days for review exercises in the Army will increase, and the 1993 level will according to plans be surpassed in 1998.

Operations and maintenance

In order to reach the main goals of the transformation process it is important that savings in maintenance are carried through as quickly as possible. Because of this the reductions in the budget for operations and maintenance will in 1996 as in the previous years be substantially higher than the average demand for savings that was included in the Long-Term Report.

Defence Minister Kosmo accepts that the goal of achieving 2.2% savings in operations and maintenance in 1996 (excluding UN operations, the Coast Guard, and Search and Rescue) is ambitious. However, the Government thinks it is feasible and acceptable since the restructuring process is on schedule and reflects that the organizational changes that have been carried out produce the intended results.

Operational costs for the Coast Guard will increase by 10.2%. This is primarily a consequence of the implementation of a standing surveillance of the inner coastal waters from January 1, 1996, as well as of the Government’s decision to strengthen the supervision of the fisheries.

The general develompent in international security has required a substantially larger effort and more resources for military UN operations than estimated in the Long-Term Report. Expenses devoted to this effort have increased by 5.6%, partly as a result of an expanded involvement in Bosnia. The Transport Maintenance Company which is part of the UN forces in Lebanon will be discontinued by the end of May 1996.

The Government’s objective is to reduce the costs for buildings and construction to a level which in 2002 will be approximately 25% lower than in 1992. The aim is to have achieved at that point a level of owned and rented building space that will have been reduced by approximately 4.5 million square meters.

Investments

For 1996 the increase in real terms for the materiel investments budget is 5.6%. In evaluating the order of purchases, the plans for phasing in new equipment in relation to the new structure are decisive. The goal to achieve the best possible balance in the materiel structure is to have first priority, which means that all projects are subject to an impact analysis in relation to the current plans to phase in new materiel, the existing materiel structure, and a realistic estimation of future budgets.

The materiel investments’ share of the budget increases from 26% in 1995 to 27.5% in 1996. The Defence Establishment is on schedule to reach the goal of 30 billion NOK (1992 purchasing power) for the planning period of 1994 - 1998. The appropriations for 1996 will mostly be used to continue or conclude projects already under way. However, the Government is proposing one major investment project in 1996. The project “Soldier 2000” aims at purchasing materiel which will increase the survivability, combat endurance, and mobility of the individual soldier, in line with the future concept of combat for the Army.

The Government proposes to increase the appropriations for nationally financed buildings and constructions. In real terms, the proposed increase is 11.3% compared to 1995, and 1.1 billion NOK have been earmarked for investments. Projects that are part of the restructuring of the Armed Forces and linked to the future structure, with an emphasis on more functions concentrated in larger establishments, will be given priority. Environmental improvements are given priority as well, and the Government proposes to spend 568 million NOK on environmental measures in the Defence Establishment in 1996.

NATO financed building and construction projects in 1996 primarily consist of continuing projects that are already under way. The surveillance radars SINDRE II have now been ordered, and installation is in progress on Njunis, Senja, and Honningsvåg.

The relocation of the Armed Forces at Gardermoen is in progress, according to plans. According to the planned schedule, use of the site for the new Air Force station at Gardermoen will commence on December 1, 1996.

Security Policy

The situation in Europe in the aftermath of the Cold War has not at all stabilized, but the potential for an outbreak of hostilities between the great powers, on the basis of traditional conflict lines, has been substantially reduced. The changes in the external setting for Norway’s defence and security policies have, at the same time, modified Norway’s possibilities to exert influence on that setting. Norway’s general approach is to adapt, to participate actively, and to influence the processes of international cooperation that have an impact on our security to the greatest extent possible.

Among the international events that will have an impact also on Norway’s security during the next few years are the Intergovernmental Conference of the EU, the review conference for the treaty on conventional forces in Europe (CFE), the parliamentary elections in Russia, and the presidential elections in Russia and in the United States.

As an associate member of the Western European Union (WEU), Norway’s is of the opinion that the WEU should be kept as an independent organization, but with strengthened relations to both the EU and NATO.

The uncertainties in Russia in terms of political developments, and the continued presence of a substantial military capacity in Norway’s proximity will in a major way have an impact on Norway’s security policy and the defence planning also in the years ahead. The tripartite cooperation between the United States, Russia, and Norway on mapping and handling the environmental challenges related to military activities is an example, however, of how having Russia as a neighbour can provide new perspectives.

NATO’s Partnership for Peace program in which all the Nordic countries participate makes closer Nordic cooperation natural. The same applies to Sweden’s and Finland’s membership in the EU and observer status in the WEU, in which Norway has now registered forces as part of the WEU pool (Forces Answerable to WEU). In addition, the Nordic countries cooperate closely in order to help establish a Baltic peacekeeping batallion.

In 1995 Norway and the United States renegotiated the agreement concerning prepositioning for the American marine brigade which has Norway as a potential area of deployment (NALMEB). As a result, Norway will cover a larger share of the costs of operations and maintenance for the prepositioned materiel in Norway. At the same time, the total American commitments continue without any changes.

In last year’s budget proposal, the Ministry of Defence noted that Norway’s self-imposed restraints, which are part of the security policy, would be reviewed in the light of the overall security developments. This has now been done. The policy concerning foreign bases and nuclear weapons will be kept. The detailed self-imposed restraints have been replaced by general guidelines concerning foreign military activities on Norwegian soil. These guidelines comprise activities under the Partnership for Peace as well. A new Royal Resolution concerning entry to Norway of military vessels and aircraft will, subsequently, be worked out in order to establish general guidelines for such entries. The Bratteli declaration will continue to be an integral part of that policy.

THE DEFENCE BUDGET FOR 1996

<hr>
Budget Item                           Accounts    Revised S
  Proposal      Change  
                                        1994      III 1995    1996 
      1995/1996 (%)<hr>
Ministry of Defence                     89,154       99,080      
95,370      - 3.7
Norwegian Defence Communications       208,005      230,703     
235,350        2.0
and Data Services                                                  
               
Support to external organizations       36,919       36,861      
38,497        4.4
Common institutions and expenses        39,136      282,493     
305,626        8.2
under the Ministry of Defence                                      
               
Common Command and Command             678,242      774,554     
788,541        1.8
Structure                                                          
               
Common institutions and expenses       617,642      716,046     
790,263       10.4
under the Headquarter's                                            
               
Command                                                            
               
The Army                             3,957,098    4,294,670   
4,176,877      - 2.7
The Navy                             2,406,680    2,483,923   
2,468,078      - 0.6
The Air Force                        3,117,904    3,269,914   
3,243,205      - 0.8
The Home Guard                         527,326      551,399     
546,685      - 0.9
Defence Intelligence [1]               445,118      475,706     
387,748     - 18.5
Allied prepositioning [2]               89,025       93,109     
106,480       14.4
Procurement of materiel and          7,976,076    7,657,250   
8,279,978        8.1
buildings and construction [3]                                     
               
Relocation of the Armed Forces at      316,363    1,074,008     
780,582     - 27.3
Gardermoen                                                         
               
The Coast Guard [4]                    489,538      465,591     
548,857       17.9
Search and Rescue Services             238,253      243,039     
224,041      - 7.8
UN Operations [5]                    1,081,474      760,323     
823,123        8.3
Adult education                        107,356      106,859     
109,048        2.0
Cultural issues and measures for        98,340       78,026     
127,408       63.3
the public good [6]                                                
               
Defence Establishment's                  1,285       18,097      
47,064      160.1
Resource Organization [7]                                          
               
<hr>Total Military Defence              22,520,934  
23,711,651   24,122,821        1.7
<hr>

The table refers to nominal changes in the budget, that is, current prices.

1. The reduction under this chapter of the budget is due to the closing of stations in 1995 and implemented personnel reductions and organizational changes.
2. The increase concerning Allied prepositioning is a consequence of Norway’s covering a larger share of the operations and maintenance.
3. The increase under the investments chapter (purchases of new materiel, etc.) is a direct consequence of the key objective: to increase the overall share of the investments budget in order to reach the long-term structural goals.
4. The relatively large increase in the budget for the Coast Guard is due to the establishment of a permanent inner coastal surveillance from January 1, 1996, in addition to the increased funding of the Coast Guard’s ordinary budget.
5. The UN budget increases as a result of the growth in Norway’s involvement in the former Yugoslavia. The increase is reduced by the savings from the discontinuation of the vehicle maintenance company in Lebanon by the end of May 1996.
6. There is a major increase in the budget for cultural issues and measures for the public good since the investments in this field have been separated from the investments chapter. The money will primarily be used to invest in historic fortresses.
7. The budget of the Defence Establishment’s resource organization shows the highest increase. Parallel with the restructuring of the Armed Forces, more presumed redundant personnel may be transferred to the resource organization.