160 DSCTC 08 E rev 1 - Current and Future Capability Priorities for the Atlantic Alliance
Rapporteur: Ragnheidur ÁRNADÓTTIR (Iceland)
TABLE OF CONTENTS
II. ORIGINS AND IMPLICATIONS OF ALLIANCE CAPABILITIES CHALLENGES
III. NATO’S DEFENCE PLANNING PROCESS
IV. ADDRESSING SHORTFALLS: NATO’S RECENT CAPABILITIES INITIATIVES
V. NATO’S CURRENT APPROACH: TARGETING SPECIFIC CAPABILITIES
VI. CONCLUSIONS AND RECOMMENDATIONS
VII. APPENDIX: COMPREHENSIVE POLITICAL GUIDANCE
1. NATO today is involved in a greater number and broader range of operational activities than ever before. NATO forces are engaged in combat, peacekeeping, training and education, logistics support, and humanitarian relief. The Alliance is undertaking these challenges far from the EuroAtlantic area, and working with non-NATO partners, as well as other international organizations. Meeting the challenge of ensuring that the Alliance has the capabilities it needs to carry out these ever-increasing demands is difficult and ever more critical.
2. NATO’s Heads of State and Government have repeatedly agreed on the fact that NATO’s role as an exporter of security far beyond the Euro-Atlantic area means that the Alliance must have expeditionary capabilities in line with its ambitions. At their meeting in Reykjavik in May 2002, NATO foreign ministers agreed that "[t]o carry out the full range of its missions, NATO must be able to field forces that can move quickly to wherever they are needed, sustain operations over distance and time, and achieve their objectives.” These forces must be able to reach farther, faster, stay in the field longer, but still undertake the most demanding operations, if need be.
3. More recently, the Alliance’s 2007 Comprehensive Political Guidance (CPG), (see Appendix) NATO’s most up-to-date roadmap for transforming Alliance forces, also underscored the importance of the development by NATO nations of the necessary capabilities for expeditionary warfare:
Given the likely nature of the future security environment and the demands it will impose, the Alliance will require the agility and flexibility to respond to complex and unpredictable challenges, which may emanate far from member states' borders and arise at short notice…In order to undertake the full range of missions, the Alliance must have the capability to launch and sustain concurrent major operations and smaller operations for collective defence and crisis response on and beyond Alliance territory, on its periphery, and at strategic distance; it is likely that NATO will need to carry out a greater number of smaller demanding and different operations, and the Alliance must retain the capability to conduct large-scale high-intensity operations.
4. The highest priorities listed by the CPG over the coming decade included “joint expeditionary forces and the capability to deploy and sustain them; high readiness forces; the ability to deal with asymmetric threats; information superiority; and the ability to draw together the various instruments of the Alliance.”
5. Despite such statements of intent by the leaders of NATO member states, experts agree that the Alliance as a whole continues to suffer from persistent shortfalls in critical capabilities such as strategic lift, communications, and intra-theatre lift assets, such as helicopters. These shortfalls have a significant negative impact on the Alliance’s operational performance.
6. The Alliance has also long been faced with the difficulties generated by the so-called "capabilities gap" that has emerged between the United States and other members of the Alliance, which raises legitimate questions about the long-term interoperability of Allies.
7. Your Rapporteur seeks to analyse the reasons behind the shortfalls which hamper Allied operations today and have the potential to have grave impact on future operations, impeding the Alliance’s ability to carry out the tasks its members set before it. This report, which has been prepared for the Sub-Committee on Transatlantic Security and Defence Cooperation, will provide background information on the current capabilities debates within the Alliance, as well as providing some initial analysis of proposed solutions. Through this analysis, your Rapporteur seeks to provide Assembly members with a starting point for a discussion on whether the Alliance will have at its disposal the capabilities it needs to fulfil its missions today and tomorrow. Information gathered during the course of the 2008 activities of the Defence and Security Committee has been incorporated into this version of the report, which differs significantly from the previous version.
8. Your Rapporteur seeks to emphasize from the outset that the deliberately narrow focus on ‘hard’ operational capabilities of this report is not intended to imply that these will be sufficient to meet the range of security threats to the Euro-Atlantic area in the 21st century. Indeed, ‘hard’ power will remain necessary, but of course cannot succeed without other types of ‘soft’ capabilities and efforts, a point addressed in more detail in the conclusions of this report. This does not mean, however, that the tangible, ‘hard’ or operational capabilities discussed here are any less critical; indeed, they remain the central element of what NATO offers as a standing military organization. This report therefore seeks to analyse the ‘hard’ capability shortfalls hindering NATO operations and the initiatives launched to fill those gaps.
9. As noted above, Allied leaders have repeatedly agreed that the security challenges of the 21st century – demonstrated horrifically by the 9/11 attacks in the U.S. as well as more recent attacks in Istanbul, London, Madrid, and elsewhere – require a different defence response than was the case at the Alliance’s inception and throughout the Cold War. While NATO’s posture during the second half of the 20th century called for a massive static defence of Western Europe’s landmass, threats today emerge not from the Fulda Gap, but from ungoverned regions and from non-state actors.
10. However, interoperability problems during the first Gulf War, Europe’s inability to mount an effective and independent military response to the wars involving the dissolution of Yugoslavia, as well as the advanced precision-guided and special forces capabilities demonstrated by the U.S. military during its October 2001 campaign in Afghanistan, revealed that most European militaries were not well equipped to conduct the expeditionary warfare required by the new strategic environment. It became apparent that other than France and the UK, most European Allies would have struggled even to participate in such operations.
11. Indeed, defence analysts often lament the fact that European militaries continue to be structured largely for territorial defence, and that most U.S. Allies struggle to deploy and sustain significant elements of their armed forces in expeditionary operations. They point out that the 24 European NATO members have a total of 2.4 million military personnel, but that only 3 to 5 percent of these forces are capable of deployments outside their territory for even short periods.1
12. Most analysts agree that this operational "capabilities gap" is largely due to the different roles assigned to each military to respond to the principal threat of the second half of the 20th century. While the militaries of most European Allies were built to defend their own territory in place, the U.S. saw any potential engagement as most likely to occur at great distance from its shores, whether in Europe or Asia. Europe therefore developed heavy armies built around heavy armour, just as the U.S. was investing in all of the tools necessary to project power abroad. Consequently, as the nature of security threats evolved in the post-Cold War world, the United States had a significant advantage in the newly critical assets such as strategic lift, logistics chains, and deployable headquarters that are fundamental to sustaining operations in distant theatres.
13. Beyond this historical legacy, most analysts see the "capabilities gap" as fundamentally a question of defence investment in absolute terms. As described in detail by the previous Rapporteur of this sub-committee in several of his annual reports, most Allies dedicate less than the politicallyagreed benchmark of 2% of GDP to their defence budgets. As a rough comparison, 25 EU member states together spend less than half of what the United States alone does on defence. Simply put, most European NATO members have not spent enough on defence to resource increasing operational commitments, as well as the necessary and simultaneous transformation of their capabilities.
14. The obstacles to higher defence spending in many European countries are varied and complex. They include ageing populations and increased demands for social spending; different public perceptions of the threat posed by current security challenges and therefore of the need for expeditionary capabilities to address them; and political difficulties associated with restructuring their militaries.
15. As described in a previous report for this sub-committee, Europe continues to spend a disproportionate amount on personnel and infrastructure. The average percentage of the defence budget spent on personnel by the European Allies is 54%, with some members spending 70% or more, leaving little room for increases in R&D or procurement. The United States, by comparison, spends about 33% on personnel, but invests nearly four times as much per soldier. By another measure, all of NATO Europe spends about $12 billion annually for defence R&D, whereas the United States spent close to $75 billion in 2006.2 In June 2008, the NATO Secretary General reminded the press that while it was well known that only six of the Allies meet the informal two percent GDP benchmark on defence spending, it was equally problematic that only half the Allies spend the 20 percent they should on new equipment.
16. Thus, US defence spending is not only significantly greater in absolute terms; it is also increasingly directed at research, development, and procurement of the items that will enable US forces to tackle the challenges of the 21st century, while most European nations continue to struggle to shift their spending priorities.
17. An additional burden facing modernization efforts is the rising cost of defence equipment, which grows by 6 to 8 percent annually. Increased operational tempo has also pressured modernization budgets as funding previously set aside for new equipment is spent on supporting deployments abroad. The UK MOD, for example, is reportedly 3 billion EUR short of funds needed to buy all the equipment it plans to acquire in the next decade.3
18. Comparisons of the European defence market with the U.S. are tenuous at best, of course, as the European market remains largely fragmented along national lines. The nationally-based nature of defence spending in Europe is not surprising; however, not coordinating across Europe has meant missed opportunities for economies of scale, as well as duplication of effort, inefficiencies and higher costs. According to a recent European Parliament analysis, “the lack of synchronization at the European level … leads to redundancy and dramatically lowers spending efficiency.”4 Simply put, the considerable funding available for defence procurement has been scattered amongst programmes that are too small and often designed to produce similar capabilities in different European countries. By comparison, the EU today spends about EUR 30 billion a year on some 89 equipment programmes, while the US spends roughly EUR 83 billion annually on just 27 projects.5 The head of Lockheed Martin recently pointed out that “U.S. spending, being concentrated in one market, has the additional benefit of being more efficient than European spending which is more diffused across multiple countries and interests.”
19. The implications of this widely acknowledged and potentially growing ‘capability gap’ pose significant challenges to the Alliance. Such a gap not only underlines the fact that Europe as a whole struggles to project force outside of its territory (as demonstrated by the difficulties in deploying the EU force to Chad); it also points to the danger that as the gap widens, the United States will find it increasingly difficult to work with less well-equipped Allied forces in the field. As one Defence and Security Committee member from the U.S. Congress recently put it, the U.S. will not “dumb down” its forces for the purpose of playing on a level field with most European militaries.
20. Indeed, Allied solidarity could be called into question by a growing "capabilities gap", as pointed out by the current NATO spokesman in 2002, who warned of a possible future division of labour whereby the U.S. and other ‘capable’ Allies would provide the high-tech ‘enablers’ and it fell to other Allies to provide manpower-intensive tasks such as long-term peacekeeping. He was concerned that “at the strategic level, a growing transatlantic divergence in capabilities can perpetuate both legitimate grievances and unfair stereotypes over burden sharing and influence.”6
21. A growing gap in capabilities could also threaten future transatlantic industrial collaboration. The difference in research and development funding available to European and American defence firms has had the additional effect of widening the gap between the industrial capabilities of Europe and those of the United States. An industry leader recently warned a Brussels conference that this defence investment gap threatens the prospect for a viable transatlantic defence industrial base: “if there is a continuing disparity among the community of industrial partners such that one continues to advance and one does not, there can be no meaningful collaboration.” 7
22. Many casual observers of NATO are under the false impression that the Alliance itself ‘owns’ a significant military force, when, in fact, the assets actually owned jointly by NATO are quite modest. They are essentially limited to a fleet of AWACS (Airborne warning and control system) E3A aircraft and certain command and control elements. NATO does not currently own collectively a single offensive weapons system.
23. As a result, NATO is completely dependent on its member states for nearly all the assets it hopes to use in an operational context. In other words, the responsibility for resourcing the activities of the Alliance falls almost entirely on the nations themselves. If they do not budget for sufficient resources to fulfil their NATO commitments, the Alliance will have inadequate capabilities at its disposal. The link is thus direct between NATO’s ability to deliver, on the one hand, and national budgeting and procurement decisions, on the other.
24. NATO has developed procedures to help coordinate planning for the types of capabilities that will be needed by the Alliance. This defence planning process is intended to provide for smooth and coordinated national and NATO investments and acquisitions in order to ensure that agreed Alliance requirements are met.
25. Broadly speaking, the planning process begins with a political statement outlining the Alliance’s ambitions, through, for example, specifying the number and type of major and minor operations that the Alliance should be prepared to undertake simultaneously.8 Clearly, NATO’s current and widely different engagements – from Afghanistan to the Balkans through the Mediterranean and elsewhere – demonstrate the wisdom of planning for multiple, concurrent operations in the future.
26. This politically defined requirement, as defined by NATO’s highest political authorities, is then provided as guidance to the NATO’s Strategic Commanders - Allied Command Operations (ACO) and Allied Command Transformation (ACT) - who develop scenarios demonstrating the greatest stress that the overall political requirements could engender. On this basis, the overall level of required capabilities to face that stress successfully is determined, and a list of minimum military requirements is apportioned among the NATO nations as force goals. Once forces have been pledged against these requirements by NATO nations, the nations themselves undertake a peer review process, which is combined with the lessons learned from operations underway and operational experience, to feed into the next cycle of development of force proposals.
27. Because national defence budgets are planned over years, the shortfalls currently being felt most acutely – for example, helicopters able to be deployed to and operate in the difficult environment of Afghanistan – are a result of decisions made by NATO nations up to 10 years ago. This suggests that the development of capabilities in the Alliance context is a process that requires significant deliberation and foresight in order to be effective, given the time-lag between identifying what is most likely to be needed in the future, and actually procuring it and delivering it to the battlefield.
28. As previously described, the "capabilities gap" between the United States and most of its European Allies centres on expeditionary assets critical to 21st century operations. These assets include strategic lift; aerial refuelling; sustainability and logistics; deployable command, control, communications, computers, intelligence, surveillance, target acquisition, and reconnaissance; and precision strike weapons. These shortfalls have been widely recognized, and NATO has, to its credit, launched several high-level initiatives seeking to close this gap in the past decade. However, the overall effectiveness of these initiatives has been mixed.
29. At the April 1999 NATO Summit in Washington, D.C., the assembled Heads of State and Government launched the Defence Capabilities Initiative (DCI), in an effort to enable the Alliance to deploy troops quickly to crisis regions, to supply and protect those forces, and to equip them to engage an adversary effectively. DCI identified 58 major areas as shortfalls (based on the experience of NATO’s 1999 Kosovo air campaign), divided into five categories including mobility and deployability, sustainability and logistics, effective engagement, survivability, and consultation, command and control. Unfortunately, as analyst Carl Elk writes, observers “quickly realized that DCI was not meeting its goals because the changes that had been agreed to required most countries to increase their defence spending. Most, however, did not.”9
30. As a result of the perceived deficiencies of the DCI and its overall lack of progress, NATO, under heavy pressure from the United States, sought to re-focus its capabilities efforts at the November 2002 Summit in Prague. If the DCI was too broad and diffuse, NATO’s new initiative, the Prague Capabilities Commitment (PCC), was intended to be more focused, and it included more measurable benchmarks to assess progress. Under the PCC, which emphasizes airlift, secure communications, precision-guided munitions, and protection against weapons of mass destruction, each member state reports its progress to NATO headquarters for a periodic assessment of the fulfilment of its commitments. The Prague Summit also saw the creation of the NATO Response Force and streamlining of the military command structure, the adoption of a Military Concept for Defence against Terrorism, and a new Missile Defence Feasibility Study.
31. Current Alliance thinking on the PCC initiative is that it has fulfilled its purpose and can be brought to an end because the main capabilities sought by the PCC are now covered by specific initiatives tracked at the level of Defence Ministers, or are included in the overall force planning process. A definitive and current assessment of the PCC’s effectiveness is beyond the scope of this report.
32. However, according to recent official testimony presented to the UK House of Commons, NATO reviewed the PCC prior to the Riga Summit in November 2006 and concluded that it had been a "valuable initiative" which had "prompted progress in capability development across the Alliance". However, in a number of areas, "progress has been slow, due in the main to financial or technical difficulties". While NATO was on track to meet 72% of the PCC targets by 2008, the remaining 28% included the most costly undertakings such as strategic lift. 10
33. US National Defense University experts likewise considered the results of the PCC initiatives to be “mixed.” They join other analysts in cautioning that the success of PCC’s goals will hinge upon increased spending and changed procurement priorities - particularly by the European Allies. The NDU experts see positive developments in the declaration of full operational capability of the NRF in November 2006; in the creation of the Allied Command Transformation; and in the fact that the United Kingdom and France have “followed through on multiyear defence budget increases announced in 2002 and, for the most part, have directed new investments toward capabilities in the priority areas identified by NATO.” They also note that a few smaller Allies increased their budgets and have made important force modernization efforts. 11 However, the NDU experts also express overall pessimism in the face of declining defence budgets in many European countries, noting that even ambitious modernization efforts tend to be among the first victims of weak investment levels.12
34. At the November 2006 Riga Summit, the Alliance decided to re-focus the PCC on "high priority capability development areas", perhaps seeking to focus efforts on manageable, discreet force goals rather than an overall package whose success depended on defence spending increases that were not forthcoming.
35. The vehicle for doing so was the CPG, attached as an Appendix to this document, which represents the most recent high-level guidance on the subject of NATO capabilities. The CPG, drafted in 2005-2006 and endorsed by NATO’s Heads of State and Government at the 2006 Riga Summit, drew on the critical elements of the PCC and is intended to provide a framework and political direction for NATO’s continuing transformation, setting out for the next 10 to 15 years the priorities for all Alliance capabilities issues, planning disciplines, and intelligence.
36. Informed by ongoing operations in Afghanistan, the CPG specifies the kinds of operations that NATO members expect the Alliance to be able to conduct in the future, and then logically follows to the capabilities which it should have to carry out these missions. The CPG lays out the requirement for forces that are more usable, more deployable, more effective, but not necessarily more numerous. Once again, capabilities decisions rest in large part with national governments, and the CPG does not spell out in detail how they are to be filled. More specifically, it does not define exact platforms, such as types of helicopters or rifles, but rather a type of capability and its intended effect in theatre. The CPG supports and complements, but remains subordinate to, the 1999 Strategic Concept, and will therefore presumably may have to be updated once there is a new NATO strategic concept.13
37. Current NATO operations provide an invaluable experience for the Alliance leaders and commanders to evaluate and, if need be, modify and adapt their earlier goals to actual operational needs. Of course, operations in Afghanistan are serving as the principal driver for capability requirements today. As the US Ambassador to NATO recently wrote, “Afghanistan today provides the ‘why’ for all the previously mentioned initiatives and for NATO’s continuing transformation.” 14
38. Given the fact that there are still significant and urgent capabilities shortfalls despite the overall initiatives of the PCC and the CPG, NATO and the member states are currently considering a range of new approaches. These specific, targeted efforts are a response both to the short-term needs of current operations, as well as to the longer-term goals spelled out in the CPG whose relevance is underlined by the International Security Assistance Force (ISAF) mission. What follows is a short overview of the most noteworthy efforts currently underway in this area.
39. The fact that NATO is increasingly operating far from the Euro-Atlantic area means that the Alliance requires the ability to quickly and safely deploy troops and equipment to increasingly distant operational theatres, where, for example, landings and takeoffs frequently take place in very difficult conditions. Very few NATO nations have this strategic lift capability, which seemed a low priority in the Cold War days of European territorial defence but is now central to the expeditionary operations that define the new international security environment. Several initiatives have been launched to fill this gap:
* The Strategic Airlift Capability (SAC) Initiative: Ten member countries and two partner countries15 are part of an effort to purchase at least three C-17 aircraft to meet their airlift requirements, whether national, NATO, EU, UN or other. A NATO Airlift Management Agency was established in June 2007 to acquire and manage this project. Initial operating capability is planned for early 2009.16 Through this arrangement, small nations would be able better to afford a strategic capability to participate in out-of-area operations.
* The Strategic Airlift Interim Solution (SALIS): 16 NATO and two Partner countries participate in SALIS, a multinational arrangement that provides assured access to up to six Antonov An124100 aircraft for national purposes and in support of NATO or EU operations. This is considered a stopgap measure until the Airbus A-400 is available.
* In the longer term, Airbus Industries is scheduled to deliver 180 A-400M aircraft to seven NATO nations starting in 2009, an initiative that NATO officials consider complementary to other efforts in place.
* Work is under way on a NATO Deployable Air Traffic Management (DATM) capability for the provision of air navigation services to both civil and military aircraft.
* Allies are also developing a Sealift Capability Package designed to assist in rapidly transporting forces and equipment by sea.
* The Movement Coordination Centre Europe (MCCE) was formed at Eindhoven Airbase in the Netherlands in July 2007 to coordinate the use of air, land and sea lift resources in support of NATO and EU operations. This sub-committee visited the MCCE in June 2007.17
40. The Alliance has also put a premium on improving information superiority as a central element of its transformation. Among its highest profile investments in the domain of what is referred to as ISTAR (intelligence/surveillance/target acquisitions/reconnaissance) is the Alliance Ground Surveillance (AGS) system, projected to be initially operational by 2012. AGS is intended to give Alliance commanders a detailed battlefield picture from platforms looking down onto the ground. This is one of the few capabilities that will be owned and operated by NATO itself (much like the AWACS), as opposed to individual member states. The AGS programme, in the works since the early 1990s, originated as the largest NATO project in its history, with a cost ceiling of between four and five billion euro. However, in 2007, spiralling costs and internal disagreements led to a dramatic shift in the programme’s ambitions and architecture. The manned portion of what had been planned as a mix of manned and unmanned radar platforms was abandoned, in favour of complete reliance on Unmanned Aerial Vehicles (UAVs), allowing the overall price tag to be reduced to a reported total EUR 1.4 billion. The Pentagon’s Dan Fata confirmed to the Committee that moving this project to completion was a priority of Allied Defence Ministers.
41. A related project is the MAJIIC (Multi-sensor Aerospace-Ground Joint Intelligence Surveillance and Reconnaissance Interoperability Coalition) through which nations share ISR (intelligence, surveillance and reconnaissance) information. This project, involving some 10 nations and led by the United States, aims to produce a common operational picture across a theatre of activity by defining a common architecture for sharing data. However, the industrial actors who would produce such a capability remain sceptical of truly joint projects of this sort, considering it unlikely that sufficient funding from the nations would be forthcoming.18
42. The NATO Defence Against Terrorism (DAT) programme, relatively modest in terms of resources, seeks to provide timely capabilities to deployed NATO forces, including countermeasures against improvised explosive devices (IEDs), mortar attacks, and threats to helicopters, as well as infrastructure and harbour protection.
43. Recognizing the increasing role of Special Operations Forces (SOF) in NATO operations, Allied leaders at the Riga Summit in 2006 launched a Special Operations Forces Initiative in order to increase the ability of SOF from member countries to train and operate together. This initiative has included, for example, the recent founding of a NATO Special Operations Forces Coordination Centre (originally in Stuttgart, Germany, and now co-located with SHAPE in Mons, Belgium), which trains and supports SOF from NATO nations in order to ensure interoperability in areas such as command and control, logistics and intelligence, and joint computer systems.
44. At the Bucharest Summit, heads of state endorsed a policy regarding cyber defence, the Alliance will seek endorsement from the heads of state for formulating policies for developing defences against cyber attacks, and maritime situational awareness.
45. Learning from the experiences in the Balkans, as well as in Afghanistan, NATO is also developing capabilities that would be useful in operations other than high-intensity combat. These include a range of capabilities for bringing military support to stabilization and reconstruction missions in all phases of conflict, but especially assets that are critical for the immediate postoperation environment. This is taking place in response to challenges such as those faced in Afghanistan, of “filling the post-combat vacuum” and keeping the Taliban from returning once they have been expelled from an area. NATO is also reportedly looking into non-lethal capabilities that would allow troops to carry out their mission at a lower level of force and lethality, potentially avoiding civilian casualties in chaotic environments.
46. Of course, NATO’s efforts in the area of missile defence are among its highest-profile investments. The Alliance has already agreed to pursue the Active Layered Theatre Ballistic Missile Defence (ALTBMD) programme to develop and field NATO and national capabilities against short- and medium- range threats to deployed NATO forces. For more details on this programme, your Rapporteur refers you to the 2008 Special Report of the Science and Technology Committee. 19
47. Certain additional short-term stopgap measures have been implemented. One such measure concerns the particularly well-publicized case of the shortage of capable helicopters in Afghanistan: while there is a significant overall stock of helicopters throughout the Alliance (over 4,000 transport helicopters by some assessments), there are too few that are able to handle the conditions and operational needs in Afghanistan. Even when a nation deploys its helicopters to Afghanistan, however, it faces additional expenses because it is often unable or unwilling to send its maintenance chain into theatre. This leads to enormously expensive and wasteful repatriation of helicopters via strategic lift for any major maintenance. To alleviate this situation, joint supply and maintenance arrangements based in theatre could result in tremendous savings and reduced inefficiencies.
48. The NATO Secretary General recently raised the possibility that nations which do not invest in such capabilities might instead pay to have them deployed.20 Another possibility under consideration had been a common fund to upgrade otherwise-capable helicopters in order to enable them to deploy to the harsh conditions of Afghanistan. This was turned into reality with the UK-France proposal of a multi-national Trust Fund to help nations pay for necessary re-fit and transport of their helicopters from Europe to Afghanistan for Allied and Afghan use. Press reports indicated an initial contribution of 5 million pounds to SHAPE from the UK, with additional contributions by France, Iceland and Norway. Other countries are also reportedly contributing with training capabilities and spare parts.
49. However, with no short-term solution in sight to solve the shortfall in an area that has come to symbolise the Alliance’s difficulties in collectively generating assets quickly and coherently, NATO is leasing Russian-made Mil Mi-8 helicopters to transport cargo, thus potentially freeing military airlift and tactical helicopters to focus on combat missions. While this lease is funded through NATO’s common budget, the use of common funds to solve operational problems has been criticized because it does not lead to a permanent increase in the Alliance’s capabilities. 21
50. The April 2008 Bucharest Summit generated no new major capability targets or reviews of requirements. However, as noted by the Chairman of the UK House of Commons’ Defence Committee, NATO has already done the work of identifying the necessary shortfalls; the real challenge, he underlined, was delivering on these shortfalls.22
51. In the context of delivering these much needed capabilities, U.S. Defence Secretary Robert Gates urged Allied Defence Ministers meeting immediately prior to the Summit to focus their attention on seven specific efforts. As briefed to the Defence and Security Committee by U.S. Deputy Assistant Secretary of Defence Dan Fata at our Spring Session in Berlin, Gates recommended the following priorities:
1. Prioritise the provision of forces to fill current operations;
52. Secretary Gates has also urged NATO Defence Ministers to seek what may be more manageable annual defence spending increases of 0.2% of GDP for 3-5 years. According to Fata, he has also advocated direct annual involvement of Finance Ministers at NATO in order to secure financial backing for the political commitments made at NATO headquarters.
53. Demand for NATO’s engagement in operations is likely to increase, not diminish. NATO will continue to be called on to perform the roles of peacemaker, peacekeeper, and provider of security and stability. Therefore the Alliance must plan today for both robust advanced expeditionary warfare and stabilisation and reconstruction in complex crisis management environments. No other organization has a comparable capacity to undertake these roles.
54. As stated above, NATO’s capabilities to carry out these roles are the sum total of the capabilities of all NATO nations. However, despite the shortfalls that evidently exist, the news is not all bad when it comes to European capabilities. As described in a recent dossier by the International Institute for Strategic Studies, EU countries have made qualified progress through serious efforts to restructure their armed forces, and are seeking to improve their ability to contribute to international operations. Overseas deployments are increasing, as are commitments to rapid reaction forces. 23 The EU as a whole, of course, also recognises that military reform is absolutely essential if the Union will be able to meet its security objectives.
55. One specific example is that of Germany. The German defence budget rose between 2006 (27.87 billion EUR) and 2007 (28.4 billion EUR) and looks set to do so in 2008 (29.45 billion EUR). Significant savings are also being achieved through falling operating expenses, particularly through a reduction of personnel and increased outsourcing. These resources are increasingly being invested in the most fruitful areas: funding for operations, as well as investments in procurement and modernization, which rose by 1.3 %.24 The modest measures are somewhat encouraging.
57. Thus, shifting force structures and spending effectively will continue to be critical. But most analysts agree that the first and most important challenge in ensuring that the Alliance has the necessary ‘hard’ operational capabilities is for member states to invest sufficient funds in their defence budgets. It is indisputable that developing and deploying timely and relevant military capabilities to address current and future threats will require some hard decisions about resource allocation, and these decisions will largely be made by parliaments. Members of the NATO Parliamentary Assembly thus have a particular role to play in ensuring that the need to properly finance the Alliance’s ability to carry out operations today and into the future is not lost among other funding priorities.
58. This is fundamentally an issue of political will. Your Rapporteur can only underline the following passage from the Bucharest Summit Declaration issued by our Heads of State and Government:
“Transformation is not possible without sufficient, properly prioritised resources. We are committed to continuing to provide, individually and collectively, the resources necessary for our Alliance to perform the tasks we demand from it. Therefore we encourage nations whose defence spending is declining to halt that decline and to aim to increase defence spending in real terms.”
59. We must, as Parliamentarians, ensure that the commitments undertaken by our heads of government are matched by real action. While such calls have long gone largely unheeded, perhaps the new thinking represented by U.S. Secretary of Defence Gates’ proposals, including annual defence spending increases of 0.2% of GDP for 3-5 years, and direct annual involvement of Finance Ministers at NATO, could have a positive impact.
60. However, your Rapporteur also agrees with those who see no compelling evidence that significant additional defence spending is forthcoming from most European countries; alternative approaches must therefore also be explored. And while there is no fundamental alternative to additional investment, several strategies have been proposed that could contribute to ensuring, in the meantime, that the limited resources available are used as effectively as possible.
61. In the first instance, it is critical that current defence investments are made with an eye towards increasing interoperability across national forces. In Afghanistan, the Alliance is struggling with problems in such critical areas as capabilities to counter Improvised Explosive Devices (IEDs) or sharing radio spectrum for communications.26 The sharing of such technologies has been hampered by national export and transfer restrictions, such as licensing and technology transfer policies. One example noted in this Sub-Committee’s 2005 report, the development of European precision-guided munitions capabilities, has been complicated by US reluctance to share sensitive technology and encryption codes for the US-made guidance kits, stemming from a fear that a relaxation in export controls could potentially lead to the proliferation of sensitive technology.27 This has also been a problem in Europe, with one analyst asserting that “within Europe, as a short term measure at least, we need to create free-trade clusters between the major defence industrial countries.” 28
62. The issue of restrictions on technology transfers continues to be a sensitive one. As noted in the report Strategic Challenges, suspicion exists within several European governments and defence-related industries that the United States is emphasizing the need for European Allies to enhance their capabilities partly to ensure that US defence companies will have customers. Another charge has been that the United States has created the "capabilities gap" by the technology transfer restrictions described above. However, the report dismisses the technology transfer problems as relatively rare, and suggests that Europe is already able to produce most of the capabilities NATO needs most without relying on purchases from the United States. Nonetheless, the report argues that if these frictions are not addressed, they could “divert attention and energy from the overriding national security imperative of achieving the Prague commitments.”29
63. Increased interoperability in NATO operations will also require buy-in from the defence industry producing these capabilities. As US General Lance Smith, who until November 2007 was Supreme Commander for Allied Command Transformation, recently told industry executives, “there must be standards and capabilities where all can plug-and-play and by that I mean built-in interoperable components and systems…The appetite of our field commanders for UAVs is unlimited, for example. But we cannot have a Dutch UAV flying over southern Afghanistan that is unable to send data to a UK or Canadian commander. We want to see industry respond to this shift as fast as possible.” 30
64. Many experts have called for increased "pooling" of defence assets, especially among European NATO members.31 Pooling of scarce capabilities, especially those used to train, support, and field multinational units, has the potential to provide capabilities to smaller nations, which cannot afford to develop them on their own. The Alliance’s largest common-funded project thus far, the fleet of AWACS E-3A radar aircraft, which provides the Alliance with an immediately available airborne surveillance, warning and command capability, is an example of what NATO member countries can achieve by pooling resources. These modified Boeing 707s, equipped with special radar capable of detecting air traffic over large distances and at low altitudes are one of the few military assets that are actually owned and operated by NATO.
65. While NATO and the EU have called for increased efforts towards pooling assets, and have launched projects such as the Movement Coordination Centre Europe (MCCE) mentioned above, more could still be done in this area. A former NATO defence planner recently made a convincing case for a greater pooling of resources between Britain and France, arguing that the two most significant military powers in Europe could “set a standard for the rest of Europe by starting to pool capabilities” in areas such as joint logistics support for front-line troops. 32
66. Beyond Alliance-wide pooling, there is significant scope for very beneficial, smaller-scale cooperation among groups of countries. A clear example is the extensive Nordic Defence Cooperation, in part spurred by the rising cost of defence equipment, which the Sub-Committee was briefed on during its visit to Finland in June 2007.
67. However, the challenges to such an approach are clear: multinational cooperation of this sort requires difficult and often politically sensitive negotiations dealing with issues of national sovereignty. In addition, ensuring savings through economies of scale requires sufficient overall investment, which represents an especially significant hurdle in the context of limited if not declining overall defence investment.
68. Multi-national approaches have also often resulted in extremely slow delivery of capabilities to the battlefield. A NATO commander recently told the Committee that delays in procuring and fielding new technologies were hampering Allied operational efforts; as he put it, “20 years is too long to wait for a new helicopter.” The commander suggested that industrial cooperation across national boundaries, while improving, must be more effective. He lamented the fact that between the emergence of a new requirement (such as a new type of helicopter), through the design phase, to an international agreement for procurement, and actual delivery to the battlefield, too much time is consumed. While this was less problematic during the Cold War, such delays are inappropriate for today’s operational timelines and could result in delivery of a capability when it is no longer needed for its originally intended purpose.33 Reducing the delays in getting these capabilities to the field should be a priority.
69. A second strategy is the development by individual nations of "niche" capabilities. Under this strategy, a given country would opt to develop specialized capabilities that make high-value contributions to overall NATO efforts. The classic example in this regard is the Czech leadership in developing a multinational chemical, biological, radiological, nuclear (CBRN) unit that can participate in NATO or EU missions.
70. Estonia has also pursued a productive "niche" specialization strategy, as your Rapporteur learned when the Assembly’s Sub-Committee on Transatlantic Defence and Security Cooperation undertook a mission to Tallinn in June 2008. The Sub-Committee visited Estonia’s brand new Cooperative Cyber Defence Centre of Excellence, whose relevance was highlighted by the widely reported cyber-attacks on Estonia in May 2007. Tallinn’s decision to create the Centre of Excellence was based on a deliberate assessment of where Estonia, despite its small size and limited resources, could bring added value to the Alliance. Estonia ultimately chose to focus its efforts on the emerging field of cyber-defence capabilities and has thus found a valuable "niche" capability contribution to the Alliance.
71. Your Rapporteur also notes with some pride that NATO’s Secretary General commended Iceland at the Assembly’s Spring Session in Berlin for making valuable "niche" contributions and providing added value to the Alliance, despite having no military. He highlighted the Icelandic contributions in airfield and airport management, for instance in Pristina and Kabul, and staffing key positions throughout the Alliance, including several in the NATO Senior Civilian Representative’s office in Afghanistan.
72. However, experts warn of potential pitfalls inherent in a specialization or "niche" strategy. First, it can make some smaller nations even more dependent on large nations to provide overall capabilities, especially in combat support. Second, because no NATO nation is formally obligated to participate in a given operation, Allies will need reassurance that a given capability will always be available when needed, even if some countries choose not to participate. This therefore requires a level of redundancy among Allies. In addition, specialization should not be allowed to become a burden-sharing issue, NDU experts argue: “the role specialization effort must not encourage Allies to accept only low-cost, low-risk force goals.”34 Finally, nations considering specialization will also in any case likely face domestic political pressure to maintain a basic territorial defence capability within their armed forces, even if the Alliance does not require it.
73. Finally, the relationship between NATO and the European Union, explored at length by last year’s Rapporteur of this sub-committee, is among the most critical elements of ensuring that capabilities translate into operational effects on behalf of the Euro-Atlantic community as a whole. Your Rapporteur will not belabour the point here regarding the need to avoid duplication, waste, and ineffectiveness due to competition, or simply poor coordination, between the two organizations, whose membership largely overlaps. The point cannot be made strongly enough, however, that the only way to maximize the impact of both organizations is to ensure that they work well together, developing compatible forces and technologies, and planning jointly for what is inevitably a shared operational future. Among the many possibilities in this regard is the one mentioned by NATO’s Secretary General during our Spring Session in Berlin in May, when he suggested the time may be right for a combined NATO-EU project on strategic lift.
74. This report has reviewed the major causes of capabilities deficiencies facing the Alliance; the process by which capabilities decisions are made within NATO; some of the specific initiatives that have been launched to remedy critical shortfalls; and it proposed some principles to consider going forward. However, it should be made clear that this is fundamentally a question of political will. Without sufficient investment in defence capabilities, the Alliance will not be able to carry out the missions it will surely be called on to undertake in the future, and, indeed, may not be able to successfully conclude the operations in which it is already engaged. As one analyst put it, “in the absence of real security investment that can underpin advanced expeditionary missions the temptation will always be there to simply embark upon institutional reform for the sake of appearances… this is the defence planner’s equivalent of re-arranging the deckchairs on the Titanic.” 35
75. Your Rapporteur is in full agreement with a recent UK House of Commons Defence Committee report, which underlined the point that “as important as it is to deliver tangible military capabilities, such as strategic airlift, the generation of the political will necessary to fulfil its expeditionary role is the greatest challenge currently facing NATO.”36 Members of the Assembly have a role to play in ensuring the political will exists to fulfil the ambitions that we set for the Alliance by supporting not only levels of defence spending consistent with its goals, but also by advocating greater efficiencies through efforts to commonly or multi-nationally fund critical operational capabilities.
76. Finally, this analysis would remain incomplete without underlining once again that while the military capabilities that underpin the Alliance’s current and future expeditionary role are critical, they are not sufficient to achieve NATO’s goals in places like Afghanistan. U.S. Secretary of Defence Robert Gates recently gave a speech calling for a strengthening of ‘soft’ power tools in integration with ‘hard’ power. According to Gates, in Afghanistan and Iraq, “military success is not sufficient to win: economic development, institution-building and the rule of law, promoting internal reconciliation, good governance, providing basic services to the people, training and equipping indigenous military and police forces, strategic communications, and more – these, along with security, are essential ingredients for long-term success.”37 It is often repeated that development cannot exist without security, and security is not sustainable without development.
77. Debates on the proper roles for NATO, the EU, the UN and other organizations in this respect, are wider than the scope of this analysis. However, the panoply of threats facing Allies, including global terrorism, the spread of weapons of mass destruction, climate change, fragile energy security, organized crime, global drug cartels and networks for trafficking in human beings, illegal immigrants, failed states, resource pressure and global pandemics will incontrovertibly require a soft-power approach, as recently underlined by Icelandic Minister of Justice, Björn Bjarnason. He rightly pointed out that “military might is not the sole solution to these threats, even though it still has an important geopolitical role to play. The security of our citizens now increasingly depends on law enforcement on land and sea; immigration and border control, maritime and air traffic control, intelligence gathering and police activity; in other words, on contributions from civil law-enforcement institutions.” 38
78. Thus, it remains your Rapporteur’s conviction that the breadth of the security challenges facing the Euro-Atlantic Community in the 21st century will require ‘soft’ capabilities, as well as the tangible, operational capabilities called for in this report. The Alliance’s unique role and success as a standing military organization, however, will continue to dictate that NATO must ensure that it can respond to the needs of its member states, including by engaging in expeditionary warfare. We must therefore ensure that the political will exists to provide the Alliance the necessary resources and capabilities to carry out the missions we set before it. We must not allow some NATO members to believe they are carrying an undue or insufficiently shared burden, or that their interests may somehow be better served by operating independently of an Alliance crippled by a widening "capabilities gap". The future relevance of the Atlantic Alliance may well be at stake.
Part 3 – Guidelines for Alliance Capability Requirements
Part 4 - Principles for a Management Mechanism
(*)The Management Mechanism was established in February 2006.