Experts and Links

  
NATO Resists Pressures To Militarise Central Europe
By Jorgen Dragsdahl, BASIC Paper Number 28
July 1998
 
BASIC has worked on the issue of potential weapons transfers to Central and Eastern Europe since 1994. This paper provides a perspective from within the region. NATO's Force Goals for the new members indicate that the Alliance has been responsive to the widespread debate on an unnecessary military buildup in the region. - BASIC
 
Introduction
 
A prevalent myth in tying NATO enlargement to a boom in weapons purchases by new members was debunked when NATO defence ministers endorsed Target Force Goals for Poland, Hungary and the Czech Republic at a Defence Planning Committee session on 11 June 1998. Despite numerous claims to the contrary, it has become clear that a massive and lucrative arms market for US and western European defence equipment is not opening in Central and Eastern Europe.
 
In fact, NATO has deliberately discouraged early investments in big ticket items. Early on, sales representatives from the arms industry persuaded many aspiring members to believe that procurement was a requirement for membership. But during the defence planning process, the Alliance has emphasised the human factor and interoperability with NATO forces. The real priority has not been getting battalions and brigades up to the same level of weaponry as NATO. Rather, it has, as Chris Donnelly, Special Advisor to NATO's Secretary General described it, been "changing the way the armed forces thinks".1
 
"As news filters out on the results of this process, we expect some anxiety among other aspiring members to dry up a bit, so they will think in a more sober way about their requirements", said a NATO official close to the defence planning process in Central and Eastern Europe.2 A case in point is Romania's plan to acquire 96 US helicopters at an estimated cost of between $1.4 and $3 billion.3 Several news articles and statements by Romanian politicians have linked the deal to Romanian aspirations for NATO membership.4 However, the NATO official claims that Alliance experts have advised Bucharest to buy Russian helicopters, on the basis that they would be a more fitting addition to Romania's existing forces.
 
The same NATO official estimates that major arms procurement in the entire region, excluding only Russia, will total less than $2 billion per year for the next decade. For political and financial reasons, most orders will go to the domestic arms industry. Besides limited exports, western contractors will only benefit indirectly through joint ventures and license arrangements.5 If several countries buy multipurpose fighters, that figure may rise, but the scale and timing of such air force modernisation remains undecided.
 
This NATO estimate is in sharp contrast to often quoted figures - most often of uncertain origin and vague content - putting the expected market for western exports at a total value of $35 billion for the next decade.6 It also represents only a small fraction of global arms sales, presently at a level of over $30 billion annually.7
 
Speculative future trends
 
Whether the present trend will change is somewhat beyond the scope of this report, as it involves many speculative factors. Some argue that costs were kept down in order to ease ratification of membership. But any "surprise" announcement of a need for costly new projects would also have political repercussions, and could block ratification of further enlargement.
 
NATO clearly favours power projection capability for new members, and after some of today's most urgent modernisation needs have been satisfied, investments in such forces can be expected. The economy in Poland, and to a lesser degree in Hungary and the Czech Republic, is growing rapidly. Increased prosperity will provide the means for shouldering larger defence investments. Whether continued prosperity in the region as a whole will produce similar increases in weapons purchases is debatable. It will take decades with high growth before any of the three countries reach a per capita gross domestic product (GDP) comparable to those countries after which they wish to model themselves. In competition for resources, both military establishments and domestic arms industries will have a voice, but they will also be up against far larger industrial interests and populations striving to survive in the stiffly competitive environment of the European Union.
 
The nature of Russia's future role in Europe is also a significant factor in developing future defence plans. According to informed sources, during a classified threat analysis for NATO commanders in late April 1998, General Klaus Naumann, head of NATO's Military Committee, placed the risk of resurgent Russian military power below other challenges, such as regional instability, rogue states and calamities associated with a lack of natural resources. His position was that Russia had neither the intention nor the capability to launch attacks. The estimated time-frame for preparing Russian forces to fight, if so ordered by a new political leadership, was put at three months for a regional war or 18 months for a general war. With so much warning time, there could be no anxiety about an eventuality with such little chance of success. Speculations on a future Russian threat might flourish in some circles, but the fact is that during the development of a new strategic concept, most NATO countries are stressing non-Article V contingencies. Even a hostile Russia would not constitute a threat comparable to the Soviet Union, and the enlarged NATO would not need to maintain a Cold War posture.
 
Seen from an arms control perspective, NATO enlargement accomplishes three goals. First, lower ceilings in arms control agreements can be accepted, because it is no longer necessary to defend one's territory solely with national forces. Secondly, replacing obsolete hardware through acquisition of new major weapons systems is less of a priority. Thirdly, a de facto nuclear weapon-free zone has been established in Central Europe. This last point is no small accomplishment, because in the early 1990s Polish leaders spoke favourably about nuclear weapons and later sought NATO deployment of such weapons to ensure an allied defence of Poland. This framework is likely to constrain future defence planning.
 
Acquisition of fighter aircraft
 
Nothing illustrates the discrepancies between industry-fed media speculation about a "huge" market and the actual realities better than the long-awaited procurement of new multipurpose fighters by Poland, Hungary and the Czech Republic. Since 1995, a steady stream of news reports have focused on the allegedly imminent orders for hundreds of fighters with an estimated price tag of about $10 billion. Yet many of the expected dates for the announcements have passed. Linking the postponements to the increasingly certain prospects for NATO membership, a former Polish official noted that, "If we ever had received a no, new fighters would have been ordered the day after".8 This explanation has been echoed by other sources in new member nations. As a key Hungarian official put it, "As membership came closer, the pressure for acquiring fighters lessened".
 
While the rapidly growing obsolescence of existing fighter forces created pressure for modernisation among the domestic military and arms industry, NATO officials and foreign military contacts discouraged any rapid decisions. "American arms industry representatives said: 'If you don't buy now, we can't guarantee a Senate yes to enlargement'", the Hungarian official noted. "But US generals always said: 'Wait, think twice before you buy'".9 NATO's decision not to prepare for deployment of nuclear weapons in new member countries may also have lessened the need for dual capable aircraft.10 However, both a NATO source and a key Hungarian official denied that the Alliance ever considered a nuclear role for aircraft.
 
According to classified NATO documents, in fall 1997 Poland informed the Alliance of its plans to procure between 130 and 160 moderns fighter aircraft with "delivery expected [to] begin 2001".11 In a classified Polish 15-year plan for modernisation of the armed forces dated September 1997, the same project is described as procurement of 80 fighters during the next ten years and an additional 70 by 2012.12 On 15 May 1998, Jerzy Kropiwnicki of the Government Centre for Strategic Studies in Poland and member of the Polish cabinet stated that, "The currents goal is 120 fighter aircraft within the next 10 to 15 years".13 These figures are far below earlier reports on Polish plans to procure 250 fighters.14 In June 1998, financing and others details of the deal were still unresolved, partly because the Polish 15-year plan expected funding for aircraft from outside the defence budget.
 
Fighter modernisation was considered carefully during NATO's development of Target Force Goals for Poland. During a press conference for foreign journalists in March 1998, the Polish Defence Minister said that NATO had made it clear that it did not want Poland to bankrupt itself paying for hefty arms programs in the next few years. Faced with overhauls of its education, health pension and local government systems, it was an open question if and when Poland could afford the fighters. "Therefore, for now, we have put the multipurpose aircraft on the back burner", he said.
 
Several sources in the Polish Ministry of Defence have stated that the Task Force Goals only require Poland to have a concrete program ready in 2001-02. NATO sources expect procurement to start in the "early years of the next decade", and a more concrete plan for acquisition to be presented during the next round of Force Goal planning, starting later this year. According to one source, "All options are open", with regard to both the type of fighters and how acquisition will begin. Acquisition options include leasing used fighters, pursuing co-production or finding other kinds of compensation.
 
The Czech Republic has informed NATO of its plans to procure 36 fighters, and Hungary is aiming for 30, but neither has taken any concrete steps. On 5 May, Hungarian Defence Minister Gyorgy Keleti said that a tender for the aircraft purchase would be made "in 2000 at the earliest".15 A Hungarian official cast further doubts on when and whether procurement will take place, arguing that, "It will be 2005 or later". He stressed that fighters are not the priority; rather, procurement of radar, anti-air missiles and full participation in the integrated NATO air defence with command and control facilities are the main concerns. Procurement of helicopters might also be given higher priority, as a result of NATO's emphasis on increased mobility of land forces.
 
Pressure for modernisation
 
In all three countries, the air force inventory of fighters are far below the ceilings agreed in the Conventional Armed Forces in Europe (CFE) Treaty in 1990. In addition, in their present holdings, only a small number of Soviet made MiG-29s can be considered modern. Due to maintenance problems, only a handful of MiG-29s are even capable of flying on any given day. Accident rates are also high. With a CFE limit of 460 combat aircraft, Poland has less than 360, 22 of which are MiG-29s. Naval aviation also has 27 MiG-21s; according to NATO data, they will be phased out beginning in 2008. In three years, 260 of the oldest and most worn-out aircraft, such as the 160 MiG-21s leaving active service in 1998, will be phased out. "If we fail to commission new machines to fill this gap, there will be nothing to restructure in the Polish Air Forces", its commander, General Kazimirz Dziok, said in February.16
 
According to official figures, Hungarian and Czech fighters are equally antiquated. With a CFE limit of 180 combat aircraft, last year Hungary had 52 MiG-21s and 28 MiG-29s; most of the MiG-21s are now kept in hangars. With a CFE limit of 230 combat aircraft, in 1997 the Czech Republic had 129, all outdated Soviet models. Last year, a secret Czech Ministry of Defence report stated that, "At present the basic equipment of the tactical Air Force consists of supersonic MiG-21, MiG-23, and Su-22 aircraft and subsonic Su-25 aircraft. For reasons of limited availability of resources, over 50 percent of this technology is currently incapable of flying".17 Last year, the Czech Air Force also signed a contract with a reported price tag of $708 million for 72 subsonic light multi-role L-159s, produced by the domestic Aero Vodochody, with delivery beginning in 1999.18
 
Maintenance problems, fuel costs and concerns over wear and tear on aircraft have also led to extremely low levels of readiness, measured by the number of hours pilots are airborne. According to NATO data supplied by Poland in 1997, pilots flying MiG-29s and MiG-21s were expected to get 40 hours, pilots in MiG-23s and Su-22s would get 60 hours. For all combat pilots, this would be raised to 60 hours in 1998 and 80 hours by 2002.19 Hungary and the Czech Republic provided similar figures.20 Such low readiness was the subject of considerable criticism during the NATO defence planning process, because under the Allied Central Europe (ACE) command, suggested training standards are between 160 and 180 hours. During a visit to Poland in March 1998, NATO Supreme Commander in Europe General Wesley Clark allegedly made that point painfully clear, saying, "I have no need for modern fighters with pilots having only 40 hours of flying time". However, a solution was not readily apparent, since an increase in air hours would lead to a fall in aircraft availability as a result of maintenance problems. Even new aircraft might not solve the problem, as budgetary constraints would still keep flying hours low.
 
False expectations
 
For historical reasons, having been occupied often and betrayed by allies, unilateral disarmament is not a feasible option in Central Europe. Due to the obvious modernisation needs in the region, arms industry representatives in Western Europe and North America saw great potential. In a typical outburst, Joel Johnson, vice-president of the US Aerospace Industries Association (AIA) and one of the more outspoken supporters of new acquisitions, argued that, "For 50 years, [Central Europe] has been the only region of the world that has been denied Western military products, and so you are starting at ground zero".21 Neither have the local officials restrained themselves. During the Global Air and Space '97 conference in Arlington, Virginia, then-Deputy Minister of Defence of Poland Andrzej Karkoszka said, "For you big sharks in this industry you have to understand that there is capability [in Poland and the region]". He emphasised Poland's interest in across-the-board modernisation and pointed out that, "Five to ten billion dollars for just one country...[is] quite a substantial market".22
 
Initially, US embassy officials in Warsaw expected to work out a quiet leasing arrangement for used F-16s as a stop gap measure until Poland could afford new fighters. Danish officials promised Poland practical assistance, seeing co-operation as mutually beneficial since Denmark already had extensive experience with the F-16 and co-operation could bring savings in maintenance and upgrading costs. But further official advice from US representatives was blocked when a zealous US naval attaché got McDonnell Douglas and its F/A-18 involved, despite rules forbidding US officials from taking sides in competitions between US manufacturers.23 Also entering the fray were the French company Dassault with its Mirage 2000 and Sweden's Saab and British Aerospace with the JAS-39 Gripen. On the sideline, Russia's MiGMAPO was offering the MiG-29.
 
However, as some industry representatives soon realised, there was far more talk than action. In a remarkable retrospective article, voicing views he expressed privately much earlier, Bruce Jackson, Director of Global Development for Lockheed Martin (who also gained notoriety as the co-founder of the US Committee to Expand NATO), called the idea that "nations aspiring to NATO membership are a large market for military equipment" a "false" impression.24
 
To some, this had been quite apparent for some time. In early 1996, several military attachés in member countries saw the market in Poland, Hungary and the Czech Republic to be, at best, 200 western aircraft over the next decade with a combined price tag of no more than $6 billion. Current estimates for this time frame are now down to between 110 and 130 aircraft, hardly enough to constitute a "huge" market. According to one study, the global demand for new military aircraft is expected to grow over the next decade. During that period, a total of 3,369 fighters, attack planes and trainers valued at about $100.8 billion are expected to be produced. This study predicts that the market is not in Central and Eastern Europe, but elsewhere, arguing that, "The primary market motivator... is a major re-equipment cycle beginning to shape up in the United States and western Europe".25
 
Russian analysts appear to have been equally realistic. As Ruslan Pukhov, director of the Russian Centre for Analysis, Strategy and Technology observed last year, "The widespread view that the enlargement of NATO will entail a loss of a large market for military hardware in Central and Eastern Europe for Russia does not fit the facts". He concluded this simply by looking at the small procurement budgets in the three candidate countries and their protection of their own producers.26
 
The idea that the market in the region is in fact quite small was also reinforced by the highly respected Stockholm International Peace Research Institute (SIPRI). Launching its 1997 yearbook, SIPRI stated that, "A survey of the potential arms procurement programmes of Central and East European countries suggest that there is little evidence that this sub-region will emerge as an important market for major conventional weapons even if some of the countries become members of NATO".27 Aside from low procurement budgets and protectionism, SIPRI's analysis emphasised NATO's requirements, which will likely stress interoperability rather than new large weapons systems.
 
Short-lived romance
 
But then why the uproar? Interestingly, none of the articles examining the vast market potential in the region have cited SIPRI. Neither have they quoted any NATO officials. Apart from poor journalism and unchecked anti-enlargement emotions, some misunderstandings have developed around the interactions between local governments and sales representatives from US defence companies. As Lockheed Martin's Bruce Jackson, a frequent visitor to candidate countries, explained, "Most of the misconceptions about the motivations of American corporations have their origin in the initial promotional phase, which is similar to the initial phases of a romance in that both parties tend to vastly overstate the depth and sincerity of their passion and affections".28 Marketing divisions and political leaders "discovered a mutual interest in exaggerating their enthusiasm for each other". As he pointed out, it is not the job of marketing people to ask customers if they have amply examined their own reasons for buying a product.
 
Jackson also argues that the defence manufacturers did not expect Central European governments to "exaggerate both the size of their pocketbook and the immediacy of their need for advanced military equipment". Speculating on the possible motivations for such exaggeration, he said, "I suspect that in the minds of freedom fighters and democratic revolutionaries elected after 1989, there was still a nagging doubt that maybe the West in its heart of hearts really cared more about its financial interests than shared values".
 
This analysis is supported by both Polish and Hungarian officials who also absolve Jackson of any blame in their scathing description of industry behaviour. According to one Hungarian official, "He was never primarily a sales man but more of a strategic thinker". Jackson himself explained that the attention Lockheed Martin paid Poland was interest "in a prestige client in much the same way that Rolex would like Pete Sampras to wear its watch".
 
Industry competition
 
According to Jackson, the big financial interests "lay in the burgeoning commercial marketplace". In fact, according to several sources, in 1996 Jackson was rebuffed by Polish officials when he offered investments in Poland's civilian sector as compensation for costs associated with the sale or leasing of F-16s. Only co-production with the local defence industry, who has seen its once lucrative market disappear since 1989, would be welcomed.
 
Openly scornful, Jackson explains why Lockheed Martin wants to invest in non-defence areas with exceptional growth prospects, noting that, "All of Europe, not just Central Europe, is still suffering from over-capacity in twilight industries. In America, we have just completed a painful 10-year restructuring and down-sizing, and we have no intention of suffering through these painful dislocations again".
 
However, for Central European governments, tens of thousands of jobs in their defence industries are at stake. Their only hope for a future market lies in joint ventures with NATO-based defence companies. As a result, they have stressed both the need for membership and their own prospective market potential. Jerzy Kropiwnicki of the Government Centre for Strategic Studies in Poland and member of the Polish cabinet still claims that, "the Central European countries must be assessed as a highly promising market for arms exporters". The catch is that needs should be met through co-production and that imports should be balanced through the opening of Western markets to the Polish arms industry.29
 
For precisely this reason, some Polish sources praise offers from European companies because they promise more of a future than those with US corporations. They claim that Polish industry can better find a permanent role in a European industry preparing for restructuring while US offers are generally limited to concrete compensation in procurement deals. "Americans are guests in Europe, but we have to live here", one Polish industry representative said.30 This message has also been conveyed to prospective NATO member countries by EU industry and government representatives. Last year, the German Ministry of Defence tried to persuade candidates that the Swedish JAS-39 Gripen would be the best buy in order to strengthen the position of European manufacturers relative to US producers.31 The transatlantic competition explains in part why the US defence industry has placed extraordinary emphasis on getting a foothold in such a small market. After all, even one Rolex watch can be a weapon in a global struggle for prestige and pre-eminence.
 
Conflicting pressures
 
Defence planners in Central Europe and NATO have clearly had to deal with complicated and contradictory pressures and needs. Armed with militant unions eager to march the streets of Warsaw calling for more orders, Poland's domestic weapons industry constitutes a serious problem. To a lesser extent, these industry pressures are also being felt in Hungary and the Czech Republic. Opposing pressure comes from the public which, according to opinion polls, will not support increased defence expenditures if health, education and social welfare budgets suffer as a result.
 
Arms industry expectations have also been fed by several US studies providing cost estimates on modernisation and NATO integration which range from $27 to $125 billion dollars over the next 10 to 15 years. These studies have also inspired a counter-reaction in some allied countries, where cost-conscious politicians object to picking up the tab.
 
The region's defence traditions fuel another set of pressures. Dissolution of the Warsaw Pact gave the officer corps their first chance ever to plan independently for self-defence of their own territory. Being patriots, many took on the task with enthusiasm and often voiced criticism of "much too low" CFE ceilings limiting forces sufficient for national defence. However, within NATO, there is increasing emphasis on integration and tasks other than territorial defence. Thus the officer corps in new member countries are being asked to change their thinking once again: even lower CFE ceilings could be imposed and they must place their faith in reinforcements and plan for world-wide deployment.
 
Differences in perspective also arose because all three countries came to the defence planning process with long-term plans for their armed forces already in hand. Poland's was the most detailed. While NATO's advice had been sought in developing these plans, NATO staff could only provide very limited advice before enlargement was approved at the Madrid summit in July 1997.
 
According to NATO, the defence planning process should be based on Alliance strategy and ministerial guidance. However, the candidate countries only received details of current NATO military strategy - outlined in MC 400/1 and other relevant papers - in spring 1998, when the process was almost complete. Through its Partnership for Peace (PfP) programme, NATO supplied guidelines for interoperability years ago but they were generally limited to peace support activities. All candidates got some help through bilateral contacts with various members, but this assistance was uneven and sometimes contradictory.
 
Starved forces
 
Defence planners have accepted the need for some degree of modernisation, but the objectives have remained uncertain. Compared to Warsaw Pact days, for a number of years, the armed forces of Poland, Hungary and the Czech Republic have been put on a starvation diet. Defence budgets in Poland and Hungary have been reduced by more than half in real terms. According to official figures, since 1989, Poland's military personnel has been cut from 412,000 to 233,279. According to data supplied to NATO by Poland, the real manpower is even lower, due in part to recruitment problems. In 1996, the Army, Navy and Air Force had only 176,628 in service.32 In the case of Hungary, before 1989 there were more than 100,000 men in service; according to unofficial data, by end of 1997 only 52,000 were left.33 Exact comparisons for the Czech Republic are difficult since Czechoslovakia was divided on 31 December 1992, but the situation is similar: Czech forces went from more than 106,000 in January 1993 to less than 61,000 by 1997.
 
NATO documents assessing the extremely detailed Defence Planning Questionnaires submitted last fall are replete with words like "old" and "approaching obsolescence" in describing equipment in the three countries.34 Over the years, numerous news articles have painted an even bleaker picture. During the 1990s, Poland has bought very few weapons from the domestic arms industry and procurement of spare parts has been minimal. Hungary acquired some newer equipment of Warsaw Pact origin, including MiG-29s and BTR-80 armoured vehicles through debt repayment deals with Russia. They also received cheap tanks from Belarus and 20 Mi-24 helicopters and spare parts from former East German stocks.35
 
The state of equipment in the Czech Republic is the worst. To illustrate the "scale of the problem", a NATO source estimated that bringing Czech war supplies up to Alliance standards would cost two years of that country's total defence budget. As one Prague newspaper noted, "Today's Czech Army can be considered completely toothless".36
 
On the face of it, this state of affairs lent some credence to the US studies predicting much higher expenditures. However, NATO sources indicate that the studies are seriously flawed, relying on outdated assumptions and incorrect data. According to one common criticism, they are "Cold War assumptions, not even taking into consideration the Strategic Concept from 1991". One key official dismissed the studies by the Congressional Budget Office (CBO) and the Rand Corporation as "pure fantasy". A US source at NATO even accused Pentagon officials of committing "mental masturbation" in their efforts to develop an estimate last spring, because no input was sought from either NATO or candidate governments. Citing an erroneous figure in the Pentagon study of $2.5-2.9 billion for hardened aircraft shelters to be paid out of an assessed total NATO infrastructure investment of $9-11 billion, one official exclaimed that "For many years, NATO has not built hardened shelters and will not, because we don't need to. Europe is littered with them".
 
Budgetary constraints
 
NATO reached agreement on a budget limit of $1.5 billion for the commonly funded expenditures associated with enlargement. Both NATO staff and experts from national delegations are generally satisfied with the projects included in the programme. However, several experts also call the cost level a political dictate. Similarly, when dealing with candidates, no real challenges were made to the budgetary goals outlined in their plans. All such figures are political, subject to change and manipulation. However, until such changes occur, the existing figures are followed by bureaucrats as sacrosanct guidelines. As a Polish official commented on the budgetary debate, "You can say anything about figures, but we all only have one honest answer: Costs will be the exact sum we finally decide".
 
An often repeated claim is that NATO membership reduces defence expenditures. Former Polish Deputy Minister of Defence Andrzej Karkoszka said that it should, "be stressed that the three national armed forces had to be modernised and reorganised anyhow, [regardless] of their future international bonds. The goal of integration with NATO is only a paradigm, through which all the modernisation processes are looked at. It is a quite different and much more expensive task to create an independent, entirely national, individual all-around defence than an alliance-oriented, burden-, risk-, and task-sharing defence in which the individual national potential is only one of many elements of a wider system".37 However, no one interviewed could name any concrete studies analysing expected costs outside the Alliance, although some estimates have been published. Some experts doubt that NATO membership would reduce defence expenditures but argue that Alliance scrutiny produces greater rationality in defence budgets and provides "more security for the same money".
 
A classified study by NATO's economic affairs department directed by Daniel George concludes that the costs associated with membership and planned modernisation in the three new member countries will be "affordable and manageable".38 Substantial growth is planned in defence budgets for the 1997-2002 planning period. Using 1990 prices, NATO calculated the extra sums available in contrast to keeping the 1997 level steady during this period. The total volume increase will be 18 percent in Poland, 40 percent in Hungary and 35 percent in the Czech Republic. Because of strong GDP growth forecasts, using NATO definitions, the share of defence expenditures in Poland is likely to decrease from the present 2.24 percent of GDP. Warsaw's own analysis shows a steady drop to 1.75 percent in 2012.39 Last year, GDP growth reached 6.9 percent, and future growth is expected to stay close to this level. In its official defence budgets, Poland has committed itself to a real growth increase of 3 percent above inflation for each of the next six years. Using NATO definitions, this translates into an average real growth expenditure of 2.7 percent. However, these figures do not include acquisition of multipurpose fighters to be financed outside the defence budget framework. Yet if acquisition is delayed as expected until the early years of the next decade, even a price tag of $5 billion for 160 planes will not have a dramatic impact on the defence share of Poland's GDP.
 
Hungary and the Czech Republic have phrased their commitments differently, pledging to increase their defence budgets by 0.1 percent of GDP every year. For 1998, the Czech Republic budgeted $1.05 billion for defence, while Hungary allocated $630 million.40 In 2000, the Czech defence budget should reach its target of 2.0 percent. With a 1.3 percent share of GDP in 1997, Hungary's defence budget should reach its target of 1.8 percent in 2001.
 
In 1997, NATO Europe estimated average defence expenditures to be 2.2 percent of a nation's gross domestic product, while the average from 1990 to 1994 was 2.7 percent. Individual countries varied widely, from 1.4 percent in Spain to 4.6 percent in Greece. NATO officials do not expect the decline to change, but are hopeful that the downward trend will level off.41 As a result, new member countries will be under or close to the average.
 
For modernisation, all three countries plan to allocate a growing percentage of their defence budgets to arms procurement and upgrades, infrastructure and research and development. In Poland's case, the share will rise from 17.6 in 1998 to 36.8 percent in 2012. Official sources put the cumulative sum available at $8.3 billion, not including expenditures for aircraft. These are described as the "indirect costs of integration" with NATO.42 Even when the $3 billion in "direct costs" are included, such as contributions to NATO's commonly funded budgets, maintaining delegations at NATO headquarters and reaching minimal levels of interoperability, the $11.3 billion figure is still far below earlier estimates.43 For example, the now infamous Congressional Budget Office (CBO) study estimated Poland's own costs associated with membership at between $23.4 and $28.66 billion over a fifteen-year period.44 In a more recent Cato Institute study, Ivan Eland, who also authored the CBO report, provides numerous figures which are inconsistent with the actual plans of the three new members. For example, he calculates an expenditure of $4.7 billion for the modernisation of military exercise facilities. In reality, both Poland and Hungary currently earn millions of dollars renting these facilities to Allied forces, who apparently find them quite satisfactory.45
 
Planned modernisation costs for Hungary and the Czech Republic are more fuzzy. Hungary is developing a new modernisation plan, to be finished this fall, and informed sources will only predict a growing share of the defence budget going to procurement. Over the past four years, Hungary has spent almost $198 million on military goods purchased abroad and unofficially, some expect imports to double annually to $100 million.46 Since November 1994, the Czech Republic has had a$4 billion 10 year plan for modernisation which includes aircraft purchase. However, as one newspaper claimed, financial problems and political complications have turned the plans "to dust" and in reality only half that sum is available. As Hynek Fajmon, an adviser to Defence Minister Michal Lobkowicz explained, "The 10-year plan for weapons purchases evolved at a time when it did not occur to anyone, even in his wildest dreams, that we would, evidently, be a NATO member in a year's time. Therefore, we made plans for our defence in all global respects and also envisaged purchasing weapons that we are not going to need so much after we join the Alliance".47 However, another MoD official insisted that the original modernisation plan still is valid and fully funded.48
 
Target Force Goals
 
"Look, it's not a gold mine out there", one US source said to explain why the Target Force Goals would not be good news for arms merchants. "NATO has enough of a force structure to allow a process of gradual development so new members are set up correctly. Weapons can be cranked in later. That is defence planning". Polish Ministry of Defence officials have commended NATO for a process they call "immensely helpful" in countering pressure from the Polish military and arms lobbyists.
 
NATO's assessment of Poland's defence program was quite positive. This warm reception is of particular political importance in Poland, where the arms lobby and the Deputy Minister of Defence Romuald Szeremetiew have been pushing for a fundamental revision. According to Szeremetiew, the program is based on a defeatist 1939 mentality and is too reliant on allies, who might not defend Poland.
 
In a classified summary of Poland's defence program, Supreme Allied Command Europe (SACEUR) stated that:
 
The 1998-2002 Government Program for Modernisation of the Armed Forces lays a solid framework for modernising the Polish Armed Forces in line with NATO. This effort, once approved and funded, will provide the foundation and predictability for full integration into NATO. Downsizing efforts in structure and manpower, and improvements in professional training within the armed forces, are focused in the correct areas. Efforts to form joint units with other NATO countries will also speed along the process of integration and plans to declare the bulk of all forces as NATO assigned is very much appreciated. Modernisation and procurement programs are in general focused on the critical areas of command and control, air defence and reinforcement HNS [Host Nations Support] capabilities.
 
Improvements in these areas are essential once membership occurs and Poland is advised to maintain a consistent and fully funded effort. Land contributions and capabilities are significant and will contribute greatly to NATO's abilities to conduct operations in a wide spectrum. Training levels however are of concern and should not be slighted over other modernisation efforts. Poland's maritime forces constitute undoubtedly a major addition to NATO's maritime capabilities in the Baltic, but the real benefits will only become apparent at the end of the period when more upgraded and modern equipment will be introduced and interoperability with NATO forces improved. PA/ADF [Air Force and Air Defence] programs are in principle comprehensive, however shortfalls in training are of concern.
 
Poland is encouraged to put appropriate emphasis on air defence and air field reception facilities as these will be most critical in the period right after accession. The most significant areas of improvement are in command and control, which is appropriate, and these enhancements will make full interoperability with NATO command and control systems a near term reality. The need for intensified language training, which is part of comprehensive plans, will require continuing emphasis and solid support.
 
Overall, ACE [Allied Command Europe] appreciate Poland's efforts towards military interoperability with NATO and willingness to accept the many military burdens of membership. Poland's plans for the future will ensure that, as an Alliance member, Poland will be able to fully and meaningfully participate in all the activities of the Alliance.49
 
The priorities indicated are repeated in the more detailed Target Force Goals. Of 65 goals, Poland was able to agree fully to 60 percent. Among the recommendations which deviated from Polish plans were transferring funds from land forces to naval forces and putting greater effort towards logistics.
 
Hungary's Defence Planning Questionnaire did not receive such a warm reception. "Our general impression is that Hungary is planning along the right lines", one NATO official commented. "It is a small country, less well-endowed with resources than Poland and the Czech Republic, but Hungarians always have been very receptive to advice. They have not committed themselves to spending large chunks of money on projects, and that's both good and bad. Good, because they are careful not to waste resources, bad, because a lot of decisions have been postponed. But we are confident about the way they are going".
 
According to the Chief of Staff of the Hungarian Armed Forces Lt. Gen. Ferenc Vegh, of the 48 goals set by NATO, Hungary adopted 29 in full, 15 in part and made four others the subject for consideration.50 Those to be considered deviate from Hungarian priorities politically or militarily, while the partially adopted goals lack a secure financial background. As priority tasks for Hungary, Vegh cited anti-aircraft defence, telecommunications and law harmonisation. In addition, Hungary's air defence is not currently considered NATO-compatible and training needs greater emphasis on preparing Rapid Reaction Forces as a contribution to joint defence efforts. In 1998, Hungary will develop a national military strategy plan with emphasis on the qualitative sides of army reform.
 
The Czech Republic's defence plan was criticised in a number of areas. Until last fall, the Czechs were considered to be "pretty well on track," but political instability and economic setbacks clouded the picture. One NATO source said that defence plans containing "bulging procurement" in the years 2000-2002 are "frankly speaking, not helpful", because arms projects will set back other goals. Complicating Czech dialogue with NATO is a "lack of feedback" from Prague, and a lack of co-operation between military and Ministry of Defence officials. Among the concrete examples raised were Czech plans for a Rapid Reaction Brigade to be assigned to NATO, both as a prime resource pool for peace support operations and as a contribution to NATO reaction forces. However recruitment targets for professional soldiers were dramatically undershot, and it will not be ready before 2003. To increase recruitment, the Czech government decided to devote a large sum for quality of life improvements, at the expense of other Target Force Goals.
 
Setting priorities
 
From the Target Force Goals and national programs, a pattern of priorities emerges:
 
· Soft goals: The human factor is most strongly emphasised. As Hungarian Army Commander Ferenc Vegh said in February, "Technology replacement is not the major priority in NATO membership. The important thing is who mans equipment and what they have in their heads".51
 
Language training is severely lacking. Poland requires the most improvement and Hungary the least. Poland claimed to have 4,177 people with "a facility in English" in its armed forced by June 1997. The ongoing education program has increased this figure, but in May 1998, MoD officials put the number of personnel who had taken an examination at NATO's grade 3 level (good language ability) at between 400 and 500. The number speaking "fluent and excellent English" is between 80 and 120. According to one claim, in Hungary, 4,000 of the professional staff, or approximately 40 percent of all officers, speak one or more foreign languages. However, of those, 2.500, speak Russian and only 1,500 speak English. Some reports indicate that less than 300 officers in both Hungary and the Czech Republic speak fluent English.52 Just for staffing purposes at NATO, between 200 and 300 good English speakers are needed from each country.
 
Pay levels are also of concern. Extremely low salaries drive qualified personnel out of service and hamper recruitment. In an integrated environment, they may also create strained relations with much higher paid professionals from other NATO countries.
 
Other highlighted items include: law harmonisation, changes in military education institutes, improved protection of classified information, and further changes to the ministerial and administrative structures.
  • Command, Control and Communication: This field involves both human and technical resources. Traditionally, command authority was held primarily by officers while NATO stresses the significance of a more developed non-commissioned officer (NCO) structure. In general, technical resources are incompatible and at a level below NATO standards. To date, only two Polish ships, salvage vessels modernised for search and rescue purposes, are fully interoperable with NATO vessels.
  • Air Defence: Needs in this area are broad, from new radar to missiles to operations centres with computers. The field typically involves high-technology equipment, an area in which western producers are often thought to have a commanding lead. In fact, this year, Hungary took delivery of the first of 200 French-produced Mistral anti-air missiles, and a tender for radar will be announced in 1998. But Hungary's defence industry is geared to high-tech production and Poland has developed a praise-winning new three-dimensional radar system, and is also developing modern anti-air weapons.
  • Host Nation Support: A key requirement is better infrastructure for reception and servicing of reinforcements. From Warsaw Pact days, all candidates have an impressive infrastructure. Poland has 55 military airfields, but only 15 are in use. Six will be NATO-assigned and thus far two are slated for modernisation. Airfields need better runways, restraints for emergency landings and NATO-compatible fuel systems. The cost of modernising airfields is estimated at $106 million.53 According to Polish officials, harbour facilities in Gdynia and Swinoujscie are already sufficient for allied needs. However, NATO wants further improvements such as equipping 13.88 kilometres of quays with NATO-compatible water and electricity supplies and power stations.
  • Logistics: NATO found logistics in all countries to be lacking, and encouraged a change of emphasis in plans. In Poland, this translates into purchases of larger fuel trucks and lorries to carry containers with kitchens, field hospitals and the like. Fuel should be compatible with NATO standards.
  • Hardware: Over a 10 to 15-year time period, procurement and modernisation needs are extensive. Ongoing programs involve upgrading of T-72M1 tanks; in Poland, 112 are to be modernised before 2002. Most importantly, Poland and the Czech Republic are "tank heavy" beyond any reasonable measure and NATO has not shown much interest in tank forces, preferring to place emphasis on attack and transport helicopters to improve mobility and flexibility for smaller forces.54
 
Selling off surplus equipment
 
As hardware is phased out, there is potential for resale. The Czech Republic has already had one scandal involving the sale of tanks to Algeria, which was finally stopped. Some years ago in Poland, the Minister of Defence learned, through wiretapping, about a sale of armoured personnel carriers to Angola. Last year, a Polish sale of 80 old T-55 tanks to Sudan was allegedly suspended as the result of US intervention.
 
Poland's newly created Military Property Agency has an impressive list of redundant facilities and equipment ranging from airfields to ammunition to toilets. However, the list of redundant fighting equipment is not long, dominated in large part by aircraft and helicopters so old that flying them is not recommended. Also for sale are 179 12.7 mm machine guns, 168 82 mm artillery pieces, armoured personnel carriers and 32 million rounds of ammunition.
 
According to one recent article in a military paper, "It is still unclear how the agency will solve the problem of getting rid of military equipment subject to sale restrictions".55 Some envision transfer of old equipment to the Baltics, but MoD and other sources do not envision large-scale sale to less developed armies. Also, it is likely that after entering NATO, political restrictions will be taken more seriously.
 
Appendix A: Areas of concern
 
While NATO is to be commended for its efforts in developing rational Force Target Goals for Poland, Hungary and the Czech Republic, concerns remain on a number of topics.
 
Arms industry representatives, both domestic and foreign, have exerted pressure on aspiring members, linking their chances for membership to purchases of major weapons systems, considered of secondary importance by defence planners. Similar pressure continues in countries not yet accepted for membership. Continued vigilance is necessary to protect a rational defence planning process.
 
Planners in the three new member countries stress close counselling from NATO experts as a very significant factor in resisting pressure from arms lobbyists and orthodox military circles. For Partnership for Peace (PfP) participants, the Planning and Review Process (PARP) has a similar effect because planning targets emphasise interoperability with NATO in doctrines, training and procedures rather than equipment. Advice should be broadened in scope to include general defence planning in PfP countries. In addition, overburdened NATO staff need to be reinforced for this task, and an arms control element should be included.
 
Powerful domestic arms lobbies in some aspiring member countries, particularly Poland, are pushing for Central and Eastern European countries to procure arms in order to reach the CFE ceilings. However, present ceilings date from a very different era, and most forces in Western Europe are now far below their ceilings. Alliance membership ensures that new members will not face potential threats alone; logically their ceilings should go down.
 
Also, using the full potential of the old quotas will frustrate NATO's attempt to create stability zones in a new CFE regime. The stationing of allied forces within these zones as an element in crisis management is preconditioned on the existence of head room between actual national holdings and the CFE ceilings. Preventing re-nationalisation of defence is an important NATO mission, thus national holdings should be lowered.
 
As urged by former Polish Deputy Defence Minister Andrzej Karkoszka, in future force planning, NATO must develop its projection/reception capabilities "in a way, which would not be misperceived by non-NATO states as an aggressive posture". Karkoszka added that, "Such an outcome would negate the basis on which the postulated Alliance posture is construed, as it would cause an overreaction of other states, notably Russia, shattering the presently generated benign European relations".56
 
There is strong support for providing Allied aircraft on Polish bases with reinforcement capabilities in order to offer high flexibility defence for the region without permanently stationing forces there. The low cost of this option also makes it appealing. However, while reinforcement capabilities are key to Alliance readiness and the credibility of NATO's security guarantee, restraint must also be exercised. Reinforcement capability provides NATO with additional capacity to project its air power to the east, and therefore could be of political and military concern to Belarus and Russia. There are currently only two bases prepared for Host Nation Support in Poland. Any increase in this number must be weighed carefully with regard to the potential effects on stability. Additional arms control, transparency and confidence-building measures should also be considered.
 
To quell urges to acquire large numbers of modern fighters, NATO should promote leasing arrangements, as originally envisioned. Training arrangements for pilots in more well-off member countries could also ease some of the problems associated with postponement of acquisition. In addition, new member countries are in danger of buying "new" planes at a time when these are soon to be substituted by the new generation of Joint Strike Fighter aircraft, and air defence will place increasing emphasis on missiles and remote control planes. Very limited acquisition of earlier generation aircraft can bridge the time gap between obsolescence of present air forces and acquisition of new generation systems.
 
Finally, modernisation and force structure reductions have already created substantial equipment surpluses and will continue to do so. Possibilities for resale are limited due to legal constraints and the age of relevant systems. However, to prevent sales with destabilising effects, NATO and all member countries should enforce strict guidelines on exports and ensure transparency from an early phase.57
 
Appendix B: Poland's future procurement plans
 
Poland's still classified 15-year defence plan divides technical modernisation into 11 fields and one special government program. According to the "Defence Review Committee Assessment of Plans of Poland", reforms and modernisation of Poland's armed forces aim to create "a smaller but more capable force structure with well-equipped, mobile and efficient forces". Poland informed NATO about plans for cutting total authorised manpower levels to 180,000 in 2002, but ongoing reorganisation is aiming for a level between 155,000 and 160,000.
 
The technical modernisation program for 1998-2012 will receive increasing resources during that period. In the initial planning period until 2002, funding is generally assured for modest upgrading and procurement. The funding and actual costs for more ambitious projects later on are more uncertain. Plans call for increasing expenditures on equipment, infrastructure and research and development almost fourfold from $.32 billion in 1997 to $1.23 billion in 2012. For 2001, only $420 million, or 12.74 percent of the defence budget, goes to major equipment. According to Polish policy guidelines, 70-80 percent of equipment purchases should be from domestic producers.
 
Jorgen Dragsdahl is a Danish journalist with 25 years of experience reporting on disarmament and military affairs. He has been stationed in Poland since 1993.

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