(Presentatie Ghesquiere [Mode de compatibilité])€¦ · GDP/head 38,577 US$ Def. Exp/Head 1150 US$ NATO joint 13.8 Billion US$ 1.33% of defence funding expenditure NATO common 2.9

NATO Office of Resources

Bureau OTAN des Resources

FUNDING NATO

Royal Higher Institute for Defence

Plans & Policy Branch

NATO UNCLASSIFIED1

Joris GhesquiereBranch Head, Plans and Policy


Royal Higher Institute for Defence

4 November 2013



NATO must have sufficient resources – financial, military and human – to carry out its missions.

Those resources must, however, be used in the most efficient and effective way possible.

We will:

NATO UNCLASSIFIED2

- maximise the deployability of our forces,- ensure the maximum coherence in defence planning,- develop and operate capabilities jointly,- preserve and strengthen the common capabilities,- engage in continual reform

Strategic Concept, paragraph 37



What does the Alliance need resources for?

Narrow- For its own running: civil and military headquarte rs

- To sustain its own activities and programmes:

science, partnership for peace, research &

NATO UNCLASSIFIED3

science, partnership for peace, research &

development activities, education & training

- To run Alliance Operations & Missions

- To have the necessary capabilities to meet its

objectives and prioritiesLarge



- NATO resources or resources of NATO nations?

- How is the Alliance funded?

- National, multinational and joint funding

- Common funding: Civil Budget, Military

NATO UNCLASSIFIED4

- Common funding: Civil Budget, MilitaryBudget, NATO Security Investment Programme

- Contributions in Kind and Trust Funds

- Current resource issues - reform and capabilities

- Role of common funding within NATO



NATO resources or resources of NATO nations?

’13 (estimates)

Population 911,866,000

Labour force 438,494,000

GDP (ppp) 35,177 Billion US$

NATO UNCLASSIFIED5


GDP/head 38,577 US$




’13 (estimates)




Armed forces 4,690,000 1.07%

Defence exp. 1,049 Billion US$ 2.98%

NATO UNCLASSIFIED6


GDP/head 38,577 US$


Def. Exp/Head 1150 US$




’13 (estimates)




Armed forces 4,690,000 1.07%


NATO UNCLASSIFIED7


GDP/head 38,577 US$


Def. Exp/Head 1150 US$

NATO joint 13.8 Billion US$ 1.33% of defencefunding expenditure

NATO common 2.9 Billion US$ 0.28% of defencefunding expenditure

NATO international 17,939 0.38% of armedmanpower forces



How is the Alliance funded?

- Alliance resources are national resources,

the resources of Alliance nations

- 95% or more of national defence budgets remains

NATO UNCLASSIFIED8

under exclusive national control

- national spending remains the default option:

NATO is not a supranational organisation

-although increasing, multinational forms of alloca ting

defence resources remain the exception to the rule



How is the Alliance funded?

- Alliance resources are national resources,

the resources of Alliance nations

- 95% or more of national defence budgets remains

But,

Impact of NATO Defence

& Capability Planning

NATO UNCLASSIFIED9

under exclusive national control

- national spending remains the default option:

NATO is not a supranational organisation

-although increasing, multinational forms of alloca ting

defence resources remain the exception to the rule

Impact of international commitments

Growing trend to multi-nationalapproaches

Smart Defence!



What are the Alliance’s multinational forms of fund ing?

- Multinational funding proper

- Joint funding

NATO UNCLASSIFIED10

- Joint funding

- Common funding “Contributions in kind”

“Trust funds”



- Multinational funding proper :

- funding outside formal NATO structures

NATO UNCLASSIFIED11

- a multitude of bilateral and multilateral arrangem ents

- the substance of the arrangement, the funding mech anisms &the funding levels remain entirely with the nations concerned




- funding outside formal NATO structures

But increasingly within the broaderDefence & Capability Planningframework of both NATO & EU

And with deployable capabilities,

NATO UNCLASSIFIED12



And with deployable capabilities,multi-national forces and multi-nationallogistics arrangements driving the issue

And with resource limitations pushingnations to explore the issue further




- funding outside formal NATO structuresThe Secretary General’s Smart Defenceinitiative is putting a lot more emphasis

on multinational cooperation as a means

NATO UNCLASSIFIED13



on multinational cooperation as a meansof using (reduced) defence budgets in

a more efficient and effective way.



- Joint funding :

- structured forms of multinational funding within t he terms ofan agreed NATO Charter

NATO UNCLASSIFIED14

- participants identify requirements, priorities and funding levels

- NATO has visibility and provides political & finan cial oversight

NATO PRODUCTION AND LOGISTICS ORGANISATIONS



NATO Production and Logistics Organisations

LogisticsNAMSA1919 M€

BICES4.3 M€

Air DefenceAir Surveillance

28 nations

28+5 nations

NATO UNCLASSIFIED15

NAHEMA1211 M€

NETMA5851 M€

CEPMA121 M€

NAMA70 M€

Production

NAMEADSMA425 M€

NAPMA307 M€

6 nations

4 nations

28 nations

6 nations

10 +2 nations17 nations

3 nations

NAGSMA134 M€

15 nations




Logistics

NSPA

BICES4.3 M€

Air DefenceAir Surveillance

28+5 nations

NATO UNCLASSIFIED16

NAHEMA1211 M€

NETMA5851 M€

NSPA2110 M€

Production

NAMEADSMA425 M€

NAPMA307 M€

6 nations

4 nations

28 nations

(6 re CEPMA)

(10+2 re NAMA)

17 nations

3 nations

NAGSMA134 M€

15 nations




Research

RTANACMA

Communications &Information Systems

NATO UNCLASSIFIED17

RTA5 M€

55 M€

NC3A418 M€

NCSA193 M€

NSA126 M€

All nations

Mainly common-funded




Research

RTO

Communications &Information Systems

NATO UNCLASSIFIED18

RTO(including CMRE)

32 M€ NCIA667 M€

NSA126 M€

All nations

Mainly common-funded



This reflects decisions by Heads of State and Government at the Lisbon Summit to consolidate the NATO Agencies and functions into:

- a Support Agency (CEPMA, NAMA, NAMSA & NAPMA O&S)

- a Communications & Information Agency (NACMA, NC3A, the static portion of the NCSA and the ALTBMD Programme

NATO UNCLASSIFIED19

the static portion of the NCSA and the ALTBMD ProgrammeOffice)

- a Science & Technology Organisation (NURC and RTA), and

- a Procurement Agency as a framework for future multinationalprogrammes and into which current Agencies such asNAGSMA, NAHEMA, NAMEADSMA, NAPMA and NETMAcould be integrated progressively.



- Common funding :

- Allies provide the funding

- NATO authorities identify requirements and priorit ies

NATO UNCLASSIFIED20

- Civil Budget

- Military Budget

- NATO Security Investment Programme



COMMON FUNDING: THE 2013 CIVIL BUDGET

Finances the NATO HQ in Brussels:

- Personnel 119.1 Million €

- Operations & Maintenance 26.9 Million €

NATO UNCLASSIFIED21

- Capital investments 7.1 Million €

- Programmes 28.9 Million €

- Pension schemes 33.5 Million €

Total 215.5 Million €

Financed from Foreign Ministry budgets, supervised by the Budget Committee, implemented by the NATO Internati onal Staff.



COMMON FUNDING: THE 2013 CIVIL BUDGET (cont'd)

Not included in the Civil Budget proper is the cost of the new

NATO HQ Project.

This is currently estimated at some 1 Billion € of which

NATO UNCLASSIFIED22

This is currently estimated at some 1 Billion € of which

- some 84% will be commonly funded (on the basis of a

separate cost sharing key) and

- 16% will be nationally funded (this part covering the

space for the national delegations).

The 2013 budget for the new HQ project amounts to 1 18.4 M€



COMMON FUNDING: THE MILITARY BUDGET

- in fact some 50 separate budgets;

- finances the operation and maintenance cost of the NATOCommand Structure, NATO-wide C3 and Air C2 capabili ties,the NAEW force, Alliance Operations & Missions, the NATODefense College and some research elements (RTA and NURC);

NATO UNCLASSIFIED23

Defense College and some research elements (RTA and NURC);

- 2013 budget allocations of 1,449 million Euro inc luding 537million Euro for Alliance Operations and Missions;

- financed from Defence budgets, supervised by the B udgetCommittee, implemented by the various commands and agenciesunder the control of the respective Financial Contr ollers.



Military Budget allocations for 2013

NAEW&C 17.4%

R&D 3.4%

Command Structure 14.7%

Pensions5.9%

PfP0.6%

TEE 2.6%

AGS 0.2%

NATO UNCLASSIFIED24

Air C2 Capabilities

3.5%Alliance Operations

& Missions37.1%

C3 Support 10.5%Support

Depl. Forces 1.2%



NATO SECURITY INVESTMENT PROGRAMME- funds investment projects in support of Alliance r equirements

- total identified requirements amount to some 7 Bil lion Euroto be implemented over the next 5 to 10 years

- main components are:

- Deployable Forces: 2.3 billion €

NATO UNCLASSIFIED25

- Deployable Forces: 2.3 billion €- Air C2 (including ACCS): 1.8 billion €- Logistic support/sustainment: 1.0 billion €- NATO-wide C3 support: 0.9 billion €

- Operations & Missions: 0.3 billi on €

- 2013 contribution ceiling at 700 million Euro

- financed from Defence budgets, supervised by the I nvestmentCommittee, implemented by host nations and agencies



NSIP expenditure estimates for 2013

Logistic Support 13.6%

Deployable Forces 16.7%

C3 Support 12.9%

Command Structure

3.6%

TEE 1.8%

NATO UNCLASSIFIED26

Air C2 Capabilities

31.5%

Alliance Operations & Missions

17.8%



International Manpower requirements

Depl. Forces7.8%

Air C2 Capabilities13.3% Command Structure

34.7%

TEE3.8%

PfP0.7%

NATO UNCLASSIFIED27

C3 Support15%

For a total of some 17,939(14,481 military & 3,458 civilians)

Alliance Operations & Missions23.5%



COST SHARE PERCENTAGES FOR THE PERIOD 2012 - 2013

AlbaniaBelgiumBulgariaCanadaCroatiaCzech RepublicDenmarkEstoniaFranceGermanyGreeceHungary

Civil Budget0.08432.04480.30685.93580.31150.93441.22270.100411.421214.57450.95000.7005

Mil. Budget NSIP0.08432.10480.30685.93580.31150.93441.34090.100411.172614.88820.95000.7005

0.08432.10480.30685.93580.31150.93441.34090.100411.172614.88821.10290.7005

NATO UNCLASSIFIED28

HungaryIcelandItalyLatviaLithuaniaLuxembourgNetherlandsNorwayPolandPortugalRomaniaSlovakiaSloveniaSpainTurkeyUnited KingdomUnited States

0.70050.04928.76380.14470.21430.13933.21321.49752.49080.94971.06290.45630.23234.92923.679411.851121.7394

0.70050.04928.80000.14470.21430.13933.28551.50822.49080.85001.06290.45630.23234.88923.679411.167722.2000

0.70050.04928.64710.14470.21430.13933.28551.50822.49080.85001.06290.45630.23234.88923.679411.167722.2000



COST SHARE PERCENTAGES FOR THE PERIOD 2012 - 2013

AlbaniaBelgiumBulgariaCanadaCroatiaCzech RepublicDenmarkEstoniaFranceGermanyGreeceHungary

Civil Budget0.08432.04480.30685.93580.31150.90101.26190.101411.920114.84110.80000.6850

Mil. Budget NSIP0.08432.10480.30685.93580.31150.90101.50200.101411.620015.53600.80000.6850

0.08432.10480.30685.93580.31150.90101.50200.101411.620015.53601.10290.6850

Moving towards a single set of cost share figuresbased on relative Gross National Income

NATO UNCLASSIFIED29

HungaryIcelandItalyLatviaLithuaniaLuxembourgNetherlandsNorwayPolandPortugalRomaniaSlovakiaSloveniaSpainTurkeyUnited KingdomUnited States

0.68500.06588.50000.13670.20480.13933.21321.49752.49080.94971.06290.45630.23234.92923.679411.851121.7394

0.68500.06588.64670.13670.20480.13933.28551.50822.49080.85001.06290.45630.23234.88923.679411.167722.2000

0.68500.04509.01890.13670.20480.13933.28551.50822.49080.85001.06290.45630.23234.88923.679411.167722.000

next step on 1/1/2014end of transition period 1/1/2016



- “Contributions in kind”

- Participation in activities or programmes in non-m onetary ways

- provision of existing facilities or capabilities

NATO UNCLASSIFIED30


- provision of personnel and know-how

- Within NATO such “contributions in kind” are not n ormally costed, i.e. their value is not measured in financi al terms



- “Contributions in kind”

- Participation in activities or programmes in non-m onetary ways


Land and local utilitiesfor NATO facilities

French and UK contributionsto the AWACS capability and

to Alliance Ground Surveillance)

NATO UNCLASSIFIED31


- provision of personnel and know-how

- Within NATO such “contributions in kind” are not n ormally costed, i.e. their value is not measured in financi al terms

to Alliance Ground Surveillance)

Military personnel in theNATO Command Structure

Force contributions toAlliance Operations and Missions



- “Trust Funds”

- Voluntary financial contributions for a given scop e

- Entrusted to an existing entity for applications o utsidethe normal budget of that entity

NATO UNCLASSIFIED32

- Opens the way for contributions by non-NATO nation s

- Examples are the Trust Funds within the EAPC/PfP e nvironment(mainly for the destruction of excess ammunition an d forbuilding integrity activities), the Trust Funds sup porting thestand-down of the KPC and the standing-up of the KS F in Kosovo, and the Trust Fund to sustain the Afghan Na tional Army.



- Trust Fund status:

- 13 ongoing trust fund projects in the EAPC/PfP env ironment ranging from 250,000 Euro to 10.9 MEUR (total 44 mi llion);varying number of nations both NATO and non-NATO;

- KPC Stand-down Trust Fund: 13.6 million Euro, 12 c ontributing nations of which two non -NATO (closing down);

NATO UNCLASSIFIED33

nations of which two non -NATO (closing down);

- KSF Stand-up Trust Fund: 37.6 million Euro, 15 con tributingnations of which two non-NATO (nearing completion);

- ISAF Post-operation humanitarian relief fund: 5 mi llion Euroto date 11 contributing nations of which 2 non-NATO .



- Trust Fund status: the ANA Trust Fund

- currently 570 million Euro donations, 23 contribut ingnations of which 9 non-NATO;

- scope concentrating on the sustainment of the Afgh an NationalArmy and on long -term literacy of the Afghan Security Forces

NATO UNCLASSIFIED34

Army and on long -term literacy of the Afghan Security Forces

- running for a period of five years with fund gener ation to bea combined effort of nations, NATO and the Afghan g overnment

- requirements estimated at around 3 billion Euro/ye ar;

- MOU, Project document, Project Board.



- Trust Fund status: the ANA Trust Fund

- currently 428 million Euro donations, 22 contribut ingnations of which 8 non-NATO;

- scope concentrating on the sustainment of the Afgh an NationalArmy and on long -term literacy of the Afghan Security Forces

At the Chicago Summit ISAF nations committed to assistAfghanistan in sustaining Afghan National Security Forces

post-2014

Target amount 1 billion Euro/year to be channelled through

NATO UNCLASSIFIED35

Army and on long -term literacy of the Afghan Security Forces

- running for a period of five years with fund gener ation to bea combined effort of nations, NATO and the Afghan g overnment

- requirements estimated at around 3 billion Euro/ye ar;

- MOU, Project document, Project Board.

Target amount 1 billion Euro/year to be channelled throughThe UNDP Justice & Rule of Law Trust Fund

and an adapted ANA Trust Fund

RPPB developing the necessary adaptations to satisfydonor nations’ requirements in terms of transparency,

efficiency, effectiveness, accountability, reporting and auditing



Funding sources: finding the right balance

National

Multinational

Joint

Common

Contributions in kind

Trust funds

NATO UNCLASSIFIED36

Contributions in kind

The Alliance uses a variety of mechanisms and arrangementsto fund its activities

There is no single, pre-set rule to define the appropriate funding source

Key to success is finding the right balance between what nations should do and what should be done by the Alliance




Capability required as:

- an integral element ofthe national force?

- affordable at the national level?

- no significant potentialfor economies of scale?

Yes? Nationalfunding

Within the realm ofnational responsibilities

Multi-national

NATO UNCLASSIFIED37

for economies of scale?

No?

Need for some formof co-operativearrangement toimplement the

capability

national responsibilitiesor nations wishing to

retain national capability?

nationalfunding

Need for long-term subjectspecific framework based

on separate user communitywith its own funding source?

Jointfunding

Need for an integrated approachin an area without an

established user community?

Commonfunding




Capability required as:

- an integral element ofthe national force?

- affordable at the national level?

- no significant potentialfor economies of scale?

Yes? Nationalfunding

Within the realm ofnational responsibilities

Multi-national

NATO UNCLASSIFIED38

for economies of scale?

No?

Need for some formof co-operativearrangement toimplement the

capability

national responsibilitiesor nations wishing to

retain national capability?

nationalfunding

Need for long-term subjectspecific framework based

on separate user communitywith its own funding source?

Jointfunding

Need for an integrated approachin an area without an

established user community?

Commonfunding

Trust Funds?



THE CURRENT RESOURCE ISSUE:

TRANSFORM THE ALLIANCE TO MEET NEW CHALLENGES

- Alliance Operations & Missions

- NATO Command Structure

NATO UNCLASSIFIED39

- NATO Command Structure

- Agency reform

- Resource reform

- Capabilities for NATO 2020 and beyond



ALLIANCE OPERATIONS & MISSIONS- “Costs lie where they fall”: participating nations cover their own costs

(and decide on the national funding source);

- Many bilateral/multilateral support arrangements (logistic support,transport, medical support) some against reimbursement, some not;

- Common funding covers costs "not attributable to a specific nation"

NATO UNCLASSIFIED40

- Common funding covers costs "not attributable to a specific nation"

- investment and O&M of theatre-level HQs

- shortfall strategic communications & critical theatre infrastructure(airports, medical facilities, storage, supply roads, basic campfacilities)

- operations-specific training

Even there, military salaries remain a national responsibility.



Defence Ministers in June 2011 agreed a leaner and more effectivecommand structure, reducing the number of headquart er entities

to 14 and the number of personnel to 6800:

- two strategic commands (ACO and ACT)

NATO Command Structure

NATO UNCLASSIFIED41

- two Joint Force HQs (Naples and Brunssum)

- a Land Command (Izmir), an Air Command (Ramstein) a nda Maritime Command (Northwood)

- Air entities in Uedem, Torrejon and Poggio Renatic o

- a Communications and Information System (CIS) Grou p

- Joint Warfare Centre (Stavanger), Joint Forces Tra ining Centre(Bydgoszcz) and Joint Analysis Lessons Learned Centre (Monsanto).



NATO Command Structure

Extensive follow-on work:

- finding the right balance between military and civi lian manpower

- implement the new Host Nation Support policy

- relocate CIS School and STRIKFORNATO to Portugal

NATO UNCLASSIFIED42

- relocate CIS School and STRIKFORNATO to Portugal

- define, develop and implement new Air entities and Land Command

- close Headquarters Heidelberg, Lisbon, Madrid and t he Naples MaritimeCommand

- convert NCSA into a deployable CIS Group and a stat ic C&I element

- develop the relationship between the NATO Command s tructure andthe NATO Force structure



Resource Reform

- Substantial resource requirements in support of AllianceOperations and Missions and overall pressure on resources

- New capabilities with important O&M and manpowerimplications (Alliance Ground Surveillance)

NATO UNCLASSIFIED43

- Resource reform addresses:

- review and stratification of requirements- improved expenditure controls and implementation management- performance measurements- increased emphasis on planning over the 5 year period

� Moving towards a more programmatic approach to common funding



Capabilities for NATO 2020 and beyond

The goal is to ensure that for 2020 and beyond the Alliance has a coherent set of deployable, interoperable and sustainable forces equipped, trained, exercised and commanded so as to be able to operate together and with partners in any environment.

NATO UNCLASSIFIED44

Many of the required capabilities will rely on NATO common funding for the provision of the integrating and interconnecting elements:

- Ballistic Missile Defence- Joint ISR- Connected Forces- Increased reliance on the NATO Force Structure- Increased requirement for training and exercises multinational forces



NATO Common Funding

- complements national activities and acts as a forc e multiplier

- is directly linked to Alliance requirements and pr iorities

- provides core Alliance capabilities

NATO UNCLASSIFIED45

- provides a “ready-made” environment for the implem entationof such capabilities:

- agreed eligibility criteria

- agreed cost share arrangements

- agreed financial and procurement mechanisms



OVER-COMMITTED or UNDER-FUNDED?

Increasingrequirements

Defence budgetsgoing down inmany nations

National vs1049 Billion US$

NATO UNCLASSIFIED46

National vsMultinational,

Joint andCommon

Affordability? Willingnessto pay?

or

1049 Billion US$

Common funding2.9 Billion US$

Find the rightbalance !



NATO Common Funding

reinforces Alliance cohesion

NATO UNCLASSIFIED47

reinforces Alliance cohesion



JALLC

KAIA

NDC

DCM RSM

SATCOM

ACT

ACCS

ISAF

NRFNSIP

NURC

PFP

ANSF

PRT

MTRP

AIS

NDMC

NATO UNCLASSIFIED48

AGS

ARS

CAOCANA

JFTC

TMD

NAEW

JWC

KFOR

NSPANCIA

DCAOCISAF

NAMO

DOB

RTO

NRF

PFP

NTM-I

APOD

ACO

PRT



NATO Defence planning

DefenceRequirements

Review

ComprehensivePolitical

Guidance

Alliance StrategicConcept

NATO UNCLASSIFIED49

Force Goals

ForceRequirements

CapabilityRequirementsLink with

ArmamentsLogistic &

C3 PlanningRequired

CapabilityPackages



NATO Defence planning

DefenceRequirements

Review

ComprehensivePolitical

Guidance

Alliance StrategicConcept

NATO UNCLASSIFIED50

Force Goals

ForceRequirements

CapabilityRequirementsLink with

ArmamentsLogistic &

C3 PlanningRequired

CapabilityPackages

Now being harmonised with the new

NATO Defence Planning Process



CAPABILITY PACKAGE PROCESS

Strategic ConceptCompr. Political GuidanceDefence Planning Process

Required Capabilities

Host NationProject

submission

ICauthorisation

Host NationProject

Implementation

SCs

NATO UNCLASSIFIED51

Required Capabilities

Required/available/missing assets

CapabilityPackages

MC

RPPBNAC

Approved CapabilityPackage

Delivered Capability

Implementation

Manpower O&MBudget

NDMCNAMP

BCbudget



NATO Resource management

MC objectivesand priorities

Translation of objectives andpriorities into requirements

for common funding

NATO UNCLASSIFIED52

Councilguidance &strategicchoices

Medium Term assessmentof the resource implications

and of their availability

Impact ofnon-implementation

Council decisionon resource allocation

Reportingon performance

against objectives

Documents

(Presentatie Ghesquiere [Mode de compatibilité])€¦ · GDP/head 38,577 US$ Def. Exp/Head 1150 US$ NATO joint 13.8 Billion US$ 1.33% of defence funding expenditure NATO common 2.9