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Annual Report on Military Expenditures, 1998 Submitted to the Committee on Appropriations of the U.S. Senate and the Committee on Appropriations of the U.S. House of Representatives by the Department of State on February 19, 1999, in accordance with section 511(b) of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1993 |
PHILIPPINES
MILITARY SPENDING
REPORTING PERIOD: January 1 to December 31, 1998.
AMOUNT: CY98 budget: USD 934.6 million at 41.10 peso = 1 USD.
PERCENTAGE OF GDP: 1.4 percent.
PERCENTAGE OF BUDGET: 7.3 percent.
TRENDS IN REAL TERMS:
The CY98 budget represents a 2.7 percent increase over the CY97
budget in peso terms but a 26.4 percent decrease in dollar terms.
In real peso terms, the Armed Forces of the Philippines (AFP)
budget contracted by 6.5 percent from 1997. As a percentage of
GDP, there was no change, and as a percentage of the national
budget there was a slight decline from the CY 1997 share of 7.6
percent.
ROLE OF THE ARMED FORCES
SIZE OF THE ARMED FORCES:
The AFP has a strength of 106,000 with the following breakdown
for the component services:
Army 66,000
Navy 24,000
Air Force 16,000
(The figure for the navy includes 8,000 marine and 2,000 coast
guard personnel. A presidential directive has effected the
transfer of the coast guard to the Department of Transportation
and communications. However, most of the funding, assets, and
personnel are still provided by the Philippine navy. The army
figure does not include approximately 40,000 civilian militia
reservists in the citizens' armed forces geographical units.)
COMMENTS ON ITS POLITICAL ROLE:
The military has not played an active role in politics since the
election of President Ramos in 1992. In July 1998, newly-
inaugurated President Estrada appointed the first civilian
defense secretary in over 20 years. Additionally, the number of
retired military officials holding senior and mid-level positions
in government has declined dramatically under the Estrada
administration.
CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS?
The AFP chief of staff is appointed by the president and all
military promotions for the rank of colonel and above must be
approved by the Congressional Commission on Appointments.
Additionally, to be eligible for promotion, an officer must first
receive clearance from the Government of the Philippine's (GOP)
Commission on Human Rights. The military services are allowed to
handle their own personnel matters without interference, but
civilian authority to appoint and remove military officers is
unquestioned.
REDUCING MILITARY SPENDING
FEASIBILITY OF REDUCING MILITARY SPENDING:
For several decades the Philippine military has focused on
internal security/counter-insurgency efforts. Having succeeded
in managing the internal threat, the AFP is now turning its
attention to restoring its external defense capabilities. To
realize its goals the AFP has designed an ambitious 15 year
modernization program--originally envisaged to cost 331 billion
pesos (approximately $8.275 billion) over a 15-year period. The
7.8 billion peso proceeds from the sale of military-owned land
have been earmarked for this program, and other monies will be
appropriated. The program will seek to modernize equipment,
force structure, and doctrine. In light of the current economic
downturn, however, the new Estrada administration delayed for
several months going forward with major new military
expenditures. Bids for major equipment purchases under the
modernization program have been accepted and are expected to be
opened soon.
U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING:
Due to the AFP's previous concentration on internal security,
Philippine air and naval forces have at present only a modest
ability to defend Philippine sea and air space. The U.S. and the
Philippines remain treaty allies, committed to coming to each
other's defense in the event of an armed attack. The USG
accordingly supports efforts to improve the AFP's external
defense capabilities. The USG has not urged a reduction in the
Philippines' modest defense budget, but rather is working closely
with the GOP and U.S. defense industry to support a program that
meets Philippine and U.S. security and economic interests.
The Philippines has been an active participant in the ASEAN
Regional Forum (ARF), where it often has been supportive of U.S.
positions, designed to promote peace and stability and to reduce
tensions and increase transparency among the militaries in the
region. The Mutual Defense Treaty between the U.S. and the
Philippines is a component of the Philippines' defenses against
external threats but the U.S. recognizes that the Philippines
must modernize its armed forces. Thus, the U.S. is supportive of
the Philippines' efforts at military modernization to provide for
an adequate defense of the country. In the long term, the
continued success of the ARF and ASEAN initiatives to address
long-term security threats such as the disputed Spratly Islands,
provides the best hope for ultimately eliminating any potential
causes for a regional arms race and for allowing the Philippines
to spend more on economic development and less on military
modernization.
COUNTRY EFFORTS TO REDUCE MILITARY SPENDING:
Except for budgetary constraints, it is unlikely the GOP will
undertake unilateral measures to reduce military expenditures
until it has completed its modernization program.
HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO
RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO
THE UN REGISTER OF CONVENTIONAL ARMS?
The Philippines participates in the UN Register of Conventional
Arms, and provides the most accurate data available. In 1998,
the Philippines participated in the UN Register. The Philippines
has submitted standardized MILEX reports to the UN three times--
1988, 1993, and 1994.
HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY
SPENDING?
There are currently no regional discussions aimed at reducing
military spending; however, in the ASEAN Regional Forum the
Philippines has previously proposed the establishment of a
regional arms registry and remains supportive of
confidence-building measures.
ASSESSMENT OF MILITARY BUDGET ACCURACY
IS THE MILITARY BUDGET ACCURATE AND COMPLETE?
The military budget accurately reflects projected military
spending in all areas except disaster assistance. Since the AFP
has traditionally played a key role in non-military activities
such as road-building, civic action programs and rural
infrastructure, the Department of National Defense is the lead
agency for coordinating disaster response. Therefore,
supplemental military appropriations can augment the initially
approved military budget in order to fund disaster relief efforts
as needed.
TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT?
The military budget is unclassified and obtainable by the general
public. The military is fully accountable to civilian
authorities and is conducting its modernization program with the
expectation that major purchases will require public and
congressional support.
RUSSIA
MILITARY SPENDING
REPORTING PERIOD: January 1 to December 31, 1998.
AMOUNT:
The budget for the first three quarters of 1998 (January through
September) was USD 7.00 billion or 50.6 billion new rubles (the
average exchange rate for the first three quarters of 1998 was 1
USD equals 7.23 new rubles). Actual expenditures for this period
were 4.66 USD or 33.7 billion, i.e. 66.5 percent of budget was
fulfilled.
PERCENTAGE OF GDP:
For the first three quarters of 1998, actual military
expenditures were 1.8 percent of overall GDP. The budgeted
amount would have constituted 2.7 percent of GDP.
PERCENTAGE OF BUDGET:
For the first three quarters of 1998, actual military
expenditures were 15.1 percent of the overall Russian budget.
The budgeted amount would have constituted 15.8 percent of the
overall budget.
TRENDS IN REAL TERMS:
In 1998, the military budget continued to shrink both in percent
of GDP and percent of overall expenditures. The decline in terms
of percent of GDP reflects the general compression of budgetary
expenditure undertaken by the Russian government.
ROLE OF THE ARMED FORCES
SIZE OF THE ARMED FORCES:
As of January 1, 1999, the authorized peacetime strength of the
Russian armed forces is to be 1.2 million, following massive
personnel cuts and reduction of peacetime billets over the past
two years. Actual personnel strength is difficult to determine,
due to lack of standardized counting methods and internal
security procedures, which obscure strength figures. Strength
accounting is also complicated by the fact that Russia maintains
several militarized formations subordinate to non-defense
security services, including the Ministry of Internal Affairs,
the Federal Border Guards Service, the Ministry of Emergency
Situations, the Federal Security Service, the Federal Agency of
Government Communications and Information, the Federal Service of
Railroad Troops, and the presidential security regiment. Some
estimates include these paramilitary units and others exclude
active duty armed forces personnel who are detailed to the
government or the commercial sector. Ministry of Defense (MOD)
and press reports estimate actual personnel strength of the armed
forces at 80-85 percent of the authorized peacetime manning
levels.
What is clear is that the number continued to decline in 1998,
due to Ministry of Defense directed downsizing, chronic
conscription shortfalls, and cadre resignations. Current
downsizing efforts continue to focus on reducing the officer
corps by 35,000 officers in order to meet force target figures.
However, the military's chronic under financing continues to
affect its ability to provide entitlements required by law
(severance pay, housing, pensions, relocation costs), which are
conditions for separation from the service. An attempt to
accelerate this process by introducing a housing certificate
system (a government "promissory note" to cover 80 percent of
housing costs, with the balance paid by the service member) met
with mixed success. A total of 42,000 certificates were to be
issued in 1998, at a cost of 5.1 billion rubles; however, the
program was suspended by the Finance Ministry in August after
12,788 certificates were issued at a cost of 1.8 billion rubles.
Since the certificates' value is not indexed, the program's
continued viability is dubious.
Currently, approximately 10,000 soldiers from Russia's armed
forces remain deployed abroad, in UN peacekeeping operations in
Croatia and Bosnia (former Yugoslavia), and other operations in
Transnistria (Moldova), South Ossetia (Georgia), Abkhazia
(Georgia), Armenia, and Tajikistan. The Russian contingent in
Bosnia is fully financed through the defense budget. The
battalion in Croatia receives subsidies from the UN. The
peacekeeping forces in the remaining areas receive subsidies from
the country in which they are based, but salaries, munitions,
uniforms and equipment come from the Russian defense budget.
Although in early 1998 the Ministry of Defense had announced that
peacekeeping missions would be assigned exclusively to the
airborne forces, this policy was changed by mid-year to include
designated ground forces units.
COMMENTS ON ITS POLITICAL ROLE:
Despite the continued deterioration of the military's economic
and service conditions (several months' pay arrears, crumbling
infrastructure, minimum subsistence-level provisions, resource
shortfalls, loss of prestige), there are no indications that the
military has, or aims to become, a viable political element. On
the contrary, as evinced during the mass nationwide strikes and
demonstration in the Fall of 1998, the armed forces remain
deliberately apolitical and averse to either organized or
incidental involvement in political and social action.
Notwithstanding disaffection on the part of individual service
members toward the current government, attempts to organize the
armed forces into opposition movements, such as that founded in
1997 by the late Duma Defense Committee chairman Lev Rokhlin,
have fizzled after receiving little support from the armed forces
and have had negligible impact on Russia's political order.
Extensive lobbying through the media and in the legislature to
highlight the military's economic hardships did not result in
increased government or public support for reinforcing either the
1998 defense budget or the armed forces' actual financing.
Russia's current economic crisis and predicted fiscal austerity
programs have put reform projects within the armed forces on
hold. The military's influence within the Primakov government
has been diminished by debilitating economic conditions and
competing priorities of the other power ministries, although
Deputy Prime Minister Maslyukov has stated his intention to
maintain and revitalize Russia's defense industries. While the
Ministry of Defense remains the principal authority on the
military aspects of international arms control, decision-making
on military related issues has become increasingly hostage to
internal political debate and funding. Despite intensive
lobbying for START II (Strategic Arms Reduction Treaty)
ratification by senior level military officers, the treaty
continues to be under review in the State Duma as of
mid-December. Peacekeeping deployments that project military
presence to influence developments along Russia's periphery and
attempts to forge closer integration among CIS armed forces have
been marginally successful.
CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS?
Although 1998 did not witness major changes in senior level
Ministry of Defense appointments, as had the two preceding years,
the constitutional authority of the president to undertake such
action was reaffirmed during two restructurings of the
government. From late 1997 through 1998, Yeltsin replaced the
directors of the other leading power ministries (Federal Border
Guards Service, the Federal Security Service, and the Ministry of
Internal Affairs), as well as successive secretaries to the
security council and senior officials within his own
administration. Yeltsin's continued support for Marshal
Sergeyev, despite the minister of defense's (MINDEF) reported
unpopularity within the defense establishment and recurring
rumors of his imminent replacement, supported the president's
principal role in the selection of senior cadres. The key factor
in this has been Sergeyev's commitment to proceed with military
reform under austere financial conditions without too strongly or
publicly challenging and criticizing the government.
REDUCING MILITARY SPENDING
FEASIBILITY OF REDUCING MILITARY SPENDING:
Russia's current economic crisis has only aggravated what was
already a dismal fiscal situation for the armed forces. Despite
aggressive lobbying, the military was allocated only 81.7 billion
rubles (13.62 billion USD at the January 1998 exchange rate) in
the 1998 federal budget. As a result of budget corrections and
sequestering throughout the year, caused primarily by revenue
shortfalls, the Ministry of Defense had received a total of 30
billion rubles by the end of November 1998. Additionally, the
ruble's threefold devaluation and the concurrent inflation on
basic items since mid-August further reduced the military
budget's purchasing power and increased the Ministry of Defense's
indebtedness to 60 billion rubles (16 billion of this for
personnel pay and entitlements).
Combat training has become virtually non-financed, with the
military receiving only 6 percent of the resources required for
combat training in 1998. Even this amount was apportioned only
for maintaining infrastructure, forcing the military to finance
fuel, ammunition, and training equipment costs from other
sources. Training continues to be conducted on a reduced scale
or is replaced by less resource-intensive activities (e.g.,
command post exercises replacing field tactical exercises).
Personnel shortfalls, combined with lack of materiel, contributed
to postponement or non-execution of unit training plans. In the
ground forces, only 35 percent of planned regimental-level and 73
percent of battalion-level tactical exercises were conducted in
1998. Sea duty for Russian fleet submarines was reduced by 25
percent and for surface vessels by 33 percent. Russian air force
elements executed between 15-40 percent of their standard
training norms. This is contributing to rapid decay of combat
readiness; according to MOD internal assessments, the average
Russian soldier is only marginally combat capable.
The Russian armed forces' living standards remain at the low end
of the country's socioeconomic scale. Throughout 1998, the
government remained 3-4 months' delinquent in paying service
members' wages, with no imminent settlement apparent by the end
of the year. The decline in the military's living standards
continues to contribute to the increase in crime (particularly
theft) and corruption in the armed forces, as well as to suicides
among service members and widespread evasion of military service.
U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING:
The U.S. Government continues to pursue arms control agreements
and nonproliferation programs with the Russian government which
could help reduce the military's weapons production, storage, and
maintenance costs. Additionally, military-to-military exchanges,
legislative initiatives, and defense conversion cooperation
programs are designed, in part, to reduce overall spending on
defense in both countries. Another area where the U.S. can
continue to help is training and advice on managing force
reduction, recruiting, and non-commissioned officer development.
Such training can help Russia manage a transition to a smaller
and more professional force.
COUNTRY EFFORTS TO REDUCE MILITARY SPENDING:
Over the past year, MINDEF Sergeyev has continued to move forward
with implementing reform and restructuring within the armed
forces despite severe budget shortfalls. These actions have
focused on consolidation of related services and command
structures, elimination of redundant institutions, and
deactivation of undermanned and cadre formations. The endstate
of current reforms is to be a force that can be manned, equipped,
and sustained at a high level of combat readiness under existing
and projected funding limits.
As a result of the military's financial restrictions, both force
modernization (acquisition and procurement of new equipment) and
plans to transition from conscript to all-contract armed forces
have been deferred until well into the next decade. The Ministry
of Defense estimates that, even if fully funded, defense orders
will meet only the most urgent requirements (foremost, in the
strategic rocket forces). Consequently, it is focusing on
upgrading and repairing the armed forces' current inventory to
extend the life of existing systems.
At the beginning of December 1998, MINDEF Sergeyev assailed the
draft 1999 defense budget, which allocates only 2.6 percent of
the GDP (vice the 3.5 percent which Yeltsin decreed in 1997 to be
the standard funding level). Sergeyev maintained that, under
current economic conditions, such a budget would be "deadly" to
the armed forces. Even though the Finance Ministry has prepared
a 60 percent pay raise for service members starting January 1,
1999, it is unlikely that service members will receive this
income increase at that time. To reduce diversion of allocated
funds to commercial financial institutions (credits and
transaction charges), all distributions are now occurring through
the federal treasury.
HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO
RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO
THE UN REGISTER OF CONVENTIONAL ARMS?
We are not in a position to assess the accuracy of the military
spending data provided by relevant international organizations or
on arms transfer data provided by Russia to the UN Register of
Conventional Arms. In 1998, the Russian military budget was a
"closed" item in the federal budget. Regression from the
transparency of the preceding year. The official Ministry of
Defense press organ Krasnaya Zvezda (Red Star) publishes weekly
and monthly figures of military budget allocations, although this
does not correspond to similar data released by the Finance
Ministry.
In 1998, Russia participated in the UN Register of Conventional
Arms. Russia has submitted standardized MILEX reports to the UN
four times--1990, 1995, 1997, and 1998--for six years. Russia
split data for several back years.
HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY
SPENDING?
Russia participates in a number of multinational regimes--such as
the OSCE (Organization for Security and Cooperation in Europe)
and CFE (Conventional Armed Forces in Europe) adaptation talks--
which address arms levels and regional security. These, in turn,
affect Russia's (as well as other countries') military
expenditures. The Russian government is also engaged in
activities with China and Central Asian states about security
arrangements and force reductions along their common borders.
However, the overriding factor in REDUCING MILITARY SPENDING
remains the under financing of the military budget and federal
budget revenue shortfalls.
ASSESSMENT OF MILITARY BUDGET ACCURACY
IS THE MILITARY BUDGET ACCURATE AND COMPLETE?
The budget data is reasonably accurate.
TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT?
As opposed to the years 1996-97, the military's budget in 1998
was closed. An unofficial line-item defense budget is published
on a monthly basis in Krasnaya Zvezda. This unofficial budget
occasionally reflects discrepancies such as the receipt of less
money by the Ministry of Defense than that which the Ministry of
Finance announces as paid. Via this unofficial budget, the
military demonstrates their accountability for what money is
received, and documents their claim that they do not receive
enough funds to be combat ready. On the other hand, the Finance
Ministry and treasury have been unsuccessful in obtaining a
detailed accounting of defense expenditures consistent with the
budget. The Defense Ministry maintains the only federal
government agency not yet included in the treasury's cash
management system. Many Duma members continue to seek
additional, more detailed information regarding the government's
plans for the armed forces and defense spending.
SAUDI ARABIA
MILITARY SPENDING
REPORTING PERIOD: January 1 to December 31, 1998.
AMOUNT: 19.5 billion USD (estimated).
PERCENTAGE OF GDP: 15.6 (estimated).
PERCENTAGE OF BUDGET: 30 (estimated).
TRENDS IN REAL TERMS: 13 percent decrease over 1997 (estimated).
The figures and percentages shown above are estimates. Official
Saudi budget figures will not be available until the end of
December. As with last year's report (which reported total
military spending of $22.3 billion), the figures above include an
estimate of defense related off-budget expenditures. As a
result, the total spending figure reported above is likely to be
several billion dollars higher than the official military
spending figure that will be reported by the government.
ROLE OF THE ARMED FORCES
SIZE OF THE ARMED FORCES:
The Saudi armed forces number approximately 226,500, broken out
as follows:
-- 15,500 in Royal Saudi Navy (RSNF) (including marines).
-- 20,000 in Royal Saudi Air Force (RSAF).
-- 16,000 in Royal Saudi Air Defense Forces (RSADF).
-- 75,000 in Royal Saudi Land Forces (RSLF).
-- 100,000 in Royal Saudi National Guard (SANG)
(including 25,000 irregular troops).
COMMENTS ON ITS POLITICAL ROLE:
None of the branches of the Saudi armed forces has a formal role
in national politics. However, the military plays a significant,
while indirect, political role by bolstering national cohesion
and development. For instance, the SANG draws recruits from key
tribal confederations, an important means by which the Saudi
royal family secures and maintains the loyalty of these groups.
In addition, the SANG is charged with protection of the Islamic
holy cities of Mecca and Medina, a responsibility central to the
Al-Saud's domestic and international legitimacy. The embassy
expects that when Crown Prince Abdullah succeeds King Fahd, he
will initially retain command of the SANG, which will enhance the
SANG's political weight.
The Saudi military services also fill important roles as a source
of employment for Saudi youth, and as training institutions that
equip many less-educated Saudis with technical skills needed in
the Saudi private sector. In addition, the Saudi military
services provide as much as 20 percent of the medical care for
the Saudi population.
CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS?
Civilian authorities have the ability to appoint and remove
military officers. This authority has been exercised on several
occasions during and since the Gulf War.
REDUCING MILITARY SPENDING
FEASIBILITY OF REDUCING MILITARY SPENDING:
Saudi Arabia faces an urgent and growing need to fund social
services to meet the needs of a rapidly expanding population.
1998 was a particularly difficult year for Saudi Arabia, since
oil prices remained well below the price level used by Saudi
budget planners to estimate national income. During the summer,
a budget reduction of 10 percent for certain spending categories
was applied across the government, including the military
services.
Regarding the feasibility of military budget reductions, it is
important to note that the Saudi services face a need to carry
out significant (and expensive) training, maintenance and
sustainment on the advanced aircraft, armored infantry vehicles,
and defensive systems acquired in recent years. The country is
still far from achieving its goal of building a military force
able to defend an attack from any potential regional aggressor
until allied forces are able to deploy to the region. As a
result, future military budget cuts may not be feasible from the
perspective of military readiness, but are nonetheless likely, as
the government finds itself increasingly compelled to address
severe shortfalls in income. Defense budgets will trend
downward, but will continue to consume about a third of the
national budget in the years immediately ahead.
U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING:
Since King Fahd's 1993 decree that Saudi Arabia cease all major
new military procurements, the USG has been working with the
Saudi government (SAG) to reduce the size of Saudi commitment to
the U.S. FMS program. The 1992 FMS level of commitment to buy
over $25 billion has been reduced to under $10 billion in 1998.
In addition, the USG works closely with each Saudi military
service through U.S. Security Assistance Organizations (SAO) to
ensure that Saudi defense funds are spent wisely, and where
needed most. During 1998, the USG worked closely with the Saudi
Ministry of Defense to prioritize spending across all the
services coming under the MODA umbrella (Air Force, Land Forces,
Air Defense Force, and the Saudi Navy), in order to prepare MODA
to adjust to reduced budgets with a minimum of damage to ongoing
sustainment programs. Other USG initiatives that could result in
greater efficiencies include encouragement of combined and joint
operations within and among Saudi services, and more effective
and comprehensive short- and long-term planning.
COUNTRY EFFORTS TO REDUCE MILITARY SPENDING:
At the outset of 1998, the SAG had planned to maintain defense
spending at about the 1997 level. However, decreased revenues
resulting from sharply lower oil prices during 1998 compelled the
government to implement budget cuts in military as well as
civilian government agencies. The Ministry of Finance has told
visiting U.S. officials that it will be difficult for the country
to maintain the current level of military spending in the year
ahead.
HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO
RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO
THE UN REGISTER OF CONVENTIONAL ARMS?
The SAG does not provide military spending data directly to
international organizations other than by way of the Saudi
Arabian Monetary Agency's (SAMA) annual report, which includes
defense spending as an aggregate category, "Defense and National
Security." Similarly, the SAG does not provide arms transfer
data directly to the international organizations; this data is
derived by ACDA and the UN from information about Saudi Arabia's
import and export activity (some of which is published in the
SAMA's annual report). In 1998, Saudi Arabia did not participate
in the UN Register of Conventional Arms. Saudi Arabia has never
submitted a standardized MILEX report to the UN.
HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY
SPENDING?
The SAG participates in Gulf Cooperation Council (GCC) meetings
aimed at enhancing security cooperation among six of the states
of the Arabian peninsula, and until recently in the Arms Control
and Regional Security (ACRS) multilateral peace talks. While
REDUCING MILITARY SPENDING is not the primary focus of the GCC or
ACRS, it is one of the sought-after consequences of enhanced
security cooperation.
ASSESSMENT OF MILITARY BUDGET ACCURACY
IS THE MILITARY BUDGET ACCURATE AND COMPLETE?
The defense spending figure included in SAMA's annual reports
have in the past included a "Defense and National Security"
category. This category had included spending for the national
commercial air carrier Saudi Arabian Airlines, and for internal
police functions. For the purposes of this reporting
requirement, the embassy has deducted estimated expenditures for
these two functions. Also, the "Defense and National Security"
has not in the past included significant defense programs that
are "off-budget." The figure cited above under Military Spending
includes an amount representing expenditures on off-budget
defense-related programs.
TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT?
The SAMA annual report describes defense spending in an aggregate
as "Defense and National Security." The details of budgets of
particular services are not officially released. There is no
formalized institutional mechanism responsible for holding
military authorities accountable on budgetary matters. Overall
budgets for the Ministry of Defense and Saudi Arabia National
Guard are negotiated each year with the Ministry of Finance prior
to the Saudi fiscal year which begins at the beginning of each
February. Within MODA, Prince Sultan is the final authority on
financial matters, as is Crown Prince Abdullah for the SANG.
All major procurements are reviewed by the Council of Ministers
and require the approval of the King. In addition, informal but
nonetheless powerful oversight of military budget and spending is
currently exercised by Crown Prince Abdullah, who has
demonstrated a willingness to use his authority to curtail or
prevent certain military expenditures. The Ministry of Finance
has acquired a significantly more influential role in determining
military budgets. For instance, during 1998, the ministry
unilaterally decreased the funding levels for several military
contracts proposed by MODA. There is no direct accountability to
the public for military spending.
SINGAPORE
MILITARY SPENDING
REPORTING PERIOD: Fiscal Year 1998, which runs from April 1,
1998 to March 31, 1999.
AMOUNT: sd 7.26 billion (USD 4.35 billion).
Conversion of Singapore dollars (sd) to U.S. dollars (USD) is at
the rate of sd 1.65 equals USD 1.00.
PERCENTAGE OF GDP: 4.62 percent.
(Note: The constitution caps the defense budget at 6 percent of
GDP, a level which Singapore has never reached.)
PERCENTAGE OF BUDGET: 26.69 percent.
TRENDS IN REAL TERMS: 11.4 percent increase over actual FY 1997
spending.
ROLE OF THE ARMED FORCES
SIZE OF THE ARMED FORCES:
Virtually all citizen males are required to serve two years in
the military. Singapore has approximately 55,500 active duty
personnel, of whom approximately 45,000 are army; 6,000 air
force; 4,500 navy. Singapore also has approximately 250,000
reservists ("national servicemen"). Singapore's armed forces
have played limited roles in a few international peacekeeping
operations.
COMMENTS ON ITS POLITICAL ROLE:
The Singapore military is under civilian control and plays no
direct role in political affairs.
Also see classified annex.
CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS?
The government has the full authority to appoint, promote, and
remove officers.
REDUCING MILITARY SPENDING
FEASIBILITY OF REDUCING MILITARY SPENDING:
See classified annex.
U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING:
See classified annex.
COUNTRY EFFORTS TO REDUCE MILITARY SPENDING:
Singapore is committed to efficiency in its military spending,
but, because of its commitment to technological superiority, has
not made significant efforts to reduce military spending.
HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO
RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO
THE UN REGISTER OF CONVENTIONAL ARMS?
To the best of our knowledge, Singapore has provided accurate
information to international organizations and arms transfer data
to the UN Register of Conventional Arms. Singapore has
participated actively in discussions within the ASEAN Regional
Forum (ARF) designed to reduce tensions and increase transparency
among the militaries in the region. In 1998, Singapore
participated in the UN Register of Conventional Arms. Singapore
has never submitted a standardized MILEX report to the UN.
HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY
SPENDING?
At present, no regional forum or ongoing dialogue is specifically
addressing REDUCING MILITARY SPENDING. Singapore is a founding
member of the ARF (see above), which is addressing the general
topic of confidence-building measures.
ASSESSMENT OF MILITARY BUDGET ACCURACY
IS THE MILITARY BUDGET ACCURATE AND COMPLETE?
To the best of our knowledge, it is accurate and complete.
However, it does not include the budgets of Singapore
Technologies, a government-linked defense-related corporation.
TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT?
Some specific elements of the military budget are not made
public. However, the defense establishment is under strict
civilian control and the defense budget is subjected to annual
public debate in parliament, with the defense minister present to
explain the projected budget and respond to questions from
members of parliament.
SLOVAKIA
MILITARY SPENDING
REPORTING PERIOD: January 1 to December 31, 1998.
AMOUNT:
In USD: 406.3 million (36 sk - 1 USD).
In Slovak crowns (koruna): 14.628 billion.
PERCENTAGE OF GDP: 2.01 percent.
PERCENTAGE OF BUDGET: 8 percent.
TRENDS IN REAL TERMS:
The trend in real terms continues down. Defense spending rose
5 percent while inflation increased approximately 7 percent.
ROLE OF THE ARMED FORCES
SIZE OF THE ARMED FORCES:
Under the Conventional Forces in Europe treaty, Slovakia has a
ceiling of 46,667 personnel. Parliament has authorized the army
to have 45,483 peacetime personnel, but due to budgetary
difficulties the current number of personnel is 39,110.
COMMENTS ON ITS POLITICAL ROLE:
The armed forces play a stabilizing role. Opinion polls show the
army is the country's most trusted institution with 74 percent
support.
CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS?
Yes.
REDUCING MILITARY SPENDING
FEASIBILITY OF REDUCING MILITARY SPENDING:
The budget barely meets minimum requirements to maintain
subsistence. It does not allow for military upgrades or
modernization. However, the military plans to reduce its size to
35,000 by the year 2000.
U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING:
None. The U.S. is urging spending to improve NATO
interoperability (regional airspace, communications, etc.).
COUNTRY EFFORTS TO REDUCE MILITARY SPENDING:
For budgetary reasons, the Slovak parliament has annually reduced
the military budget in real terms since 1995.
HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO
RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO
THE UN REGISTER OF CONVENTIONAL ARMS?
Yes. In 1998, Slovakia participated in the UN Register of
Conventional Arms. Slovakia has submitted standardized MILEX
reports to the UN four times--1995 to 1998.
HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY
SPENDING?
Slovakia participates in all applicable arms control and security
fora.
ASSESSMENT OF MILITARY BUDGET ACCURACY
IS THE MILITARY BUDGET ACCURATE AND COMPLETE?
All defense-related purchases are reflected in the defense
budget. Necessary extraordinary expenses are approved by the
Defense Minister, passed to the government's Defense Council, and
then discussed and approved/vetoed by the government. If
approved, the government directs the Finance Ministry to put
money into the state budget. It is then passed to the Ministry
of Economy for review, and put into the defense budget. The only
time this has been done, according to the Ministry of Defense,
was the request in 1996 for an additional sk 200 million
(approximately USD 6 million) for construction of much needed
military housing.
TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT?
The budget is fully transparent. The transparent budget supports
the accountability of the military to civilian authorities and
the public.
THAILAND
MILITARY SPENDING
REPORTING PERIOD: January 1 to December 31, 1998.
AMOUNT: USD 2.065 billion (82,612,000,000 baht).
Average rate for the year of 40 baht/1 USD.
PERCENTAGE OF GDP: 1.68 percent.
PERCENTAGE OF BUDGET: 9.95 percent.
TRENDS IN REAL TERMS:
As a result of the Asian financial crisis, military expenditures
showed a sharp downturn in real terms and a decline as a
percentage of both the national budget and GDP.
ROLE OF THE ARMED FORCES
SIZE OF THE ARMED FORCES:
The size of the Thai armed forces has decreased from 301,000 to
about 280,000 personnel, including approximately 190,000 army,
45,000 air force and 45,000 navy (including the marine corps).
The paramilitary border patrol police, which reports to the
Minister of Interior through the Royal Thai Police Department,
numbers about 40,000. An irregular light infantry force (the
Tahan Phran) has about 22,600 volunteers divided between the army
and marines. Thailand is not currently participating in
international peacekeeping operations.
COMMENTS ON ITS POLITICAL ROLE:
Despite an economic crisis that battered the nation and drove the
government of retired former army commander Chavalit Yongchaiyud
from office, the military avoided overt involvement in national
politics in 1998. Thailand successfully has held four successive
peaceful transfers of power, including three national elections,
since the violent suppression of pro-democracy demonstrations in
May 1992. The government of Prime Minister Chuan Leekphai has
won high marks from the international community for faithful
implementation of IMF austerity programs. The new army commander
General Surayud Chulanont has publicly stressed his determination
to follow the orders of the Royal Thai Government's (RTG)
civilian leaders. Senior military commanders continue to serve
in the appointed upper house of Parliament (the Senate).
However, under the newly adopted constitution, the Senate will
become an elected body following completion of the current Senate
term. Active duty military officers will not be eligible to
serve in the new Senate, as they are barred from seeking elective
office.
CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS?
The king, acting on the recommendation of the prime minister,
formally appoints senior military officers to their positions.
The prime minister, in turn, makes his recommendations based on
proposals from the minister of defense, who receives nominations
from the supreme commander and the commanders of the three
military services. Although not legally required, the position
of defense minister has traditionally gone to a retired military
officer, either from the ranks of Parliament or as a non-partisan
appointment. The current prime minister, Chuan Leekphai,
concurrently holds the post of defense minister. He is an
exception to the above rule, as he does not have a military
background. Officers named to the most senior military posts
generally serve in them until mandatory retirement at age sixty.
However, civilian prime ministers have on several occasions
removed senior officers from their posts. Fears of such a move
played a role in sparking the last successful military
coup d'etat in February 1991.
REDUCING MILITARY SPENDING
FEASIBILITY OF REDUCING MILITARY SPENDING:
Recent governments have sought to exert greater control over
defense spending, on occasion rejecting procurement requests for
expensive military hardware. In March of this year, Prime
Minister Chuan successfully obtained the President's consent to
release Thailand from its contractual obligations to purchase
eight F/A-18 aircraft at a cost of USD 390 million. Thailand
contracted to buy the aircraft prior to the onset of the
financial crisis and when the crisis struck was simply unable to
afford the purchase. The financial crisis, including the large
depreciation of the baht against the dollar, has led to a major
decline in defense spending, particularly in dollar terms. The
decrease from USD 4.0 to 2.25 billion represents a decrease in
dollars of 43.75 percent in the defense budget. This trend is
likely to continue through next year. However, once the economy
begins to recover, the armed forces will want to purchase
equipment postponed during the period of austerity.
U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING:
The U.S. has taken concrete action to assist Thailand in reducing
defense spending during its time of crisis by relieving Thailand
of its commitment to buy the F/A-18. The U.S. also increased
IMET funds for Thailand to help defray the costs of Thai military
students' travel and other expenses while in the U.S. By
maintaining our commitment to refrain from being the first nation
to introduce certain types of sophisticated weapons to the region
and by maintaining a significant forward defense presence in East
Asia, the U.S. has discouraged a regional arms race. Aside from
these specific steps, U.S. efforts to reduce military spending in
Thailand and elsewhere in the Southeast Asian region are largely
indirect and focus on support for regional confidence-building
especially through the ASEAN Regional Forum (ARF), and on
providing assurances that the U.S. will maintain its stabilizing
forward defense presence. In the long term, a continued U.S.
presence and regional initiatives such as ARF are the best hope
for reducing tensions, addressing long-term security threats and
ultimately removing or ameliorating the potential causes for a
regional arms race.
COUNTRY EFFORTS TO REDUCE MILITARY SPENDING:
As noted above, the current government has reduced military
spending as part of an overall austerity program. All but a
handful of major defense procurements have been canceled or
deferred. Multilaterally, Thailand has taken part in
confidence-building measures such as those promoted in the ARF to
encourage dialogue on regional issues to reduce their potential
for aggravating tensions within the region.
HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO
RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO
THE UN REGISTER OF CONVENTIONAL ARMS?
Thailand has submitted data to the UN Register of Conventional
Arms in the past and will continue to do so. In 1998, Thailand
participated in the UN Register of Conventional Arms. Thailand
has submitted standardized MILEX reports to the UN seven times
between 1983 and 1998.
HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY
SPENDING?
At present, no regional forum or ongoing dialogue is specifically
addressing REDUCING MILITARY SPENDING. Thailand is a founding
member of the ARF (see above), which is addressing the general
topic of confidence-building measures.
ASSESSMENT OF MILITARY BUDGET ACCURACY
IS THE MILITARY BUDGET ACCURATE AND COMPLETE?
Funding for major acquisitions by the armed forces is provided
for in the annual defense budget. While the services have other
sources of revenue, from military-owned radio and TV stations,
for example, we are not aware that the funds generated have been
used to augment government-approved procurement budgets.
TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT?
Traditionally, the military budget has contained a number of
covert programs. Oversight of defense spending by the elected
lower house has been limited by the reluctance of senior military
leaders to present extensive information or submit to detailed
questioning by Members of Parliament. In recent years, House
members have displayed increased willingness to insist upon more
detailed information and greater accountability, a trend to which
the military appears to be gradually yielding ground. The
publication of official Defense White Papers in 1994 and 1996 has
increased the amount of publicly available information about the
Thai armed forces. The military intends to continue to publish
these on a two-year cycle. Thailand's free and increasingly
sophisticated media also have focused greater attention on
military procurement practices, increasing the general level of
transparency.
TURKEY
MILITARY SPENDING
REPORTING PERIOD: January 1 to December 31, 1998.
AMOUNT:
Turkey's official annual military expenditures for 1998 amounted
to approximately USD 7.2 billion or tl 1.8 quadrillion (at an
average exchange rate of tl 250,000:USD 1).
PERCENTAGE OF GDP: 3.6 percent.
PERCENTAGE OF BUDGET: 12.1 percent.
TRENDS IN REAL TERMS:
The above is an increase over recently revised 1997 expenditures
of approximately USD 5.4 billion or tl 807 trillion (at an
average exchange rate of tl 150,000:USD 1) which represented an
estimated 2.8 percent of GNP and 12.6 percent of the national
budget. While military spending as a relative share of the
budget declined slightly, the near doubling of the budget between
1997 and 1998 included a 33 percent increase in military
spending, calculated in current dollar terms. Turkey's military
expenditures are expected to continue to increase; the projected
defense budget for 1999 is for USD 8.96 billion. Recent fiscal
discipline and tight monetary and exchange rate policies have
preserved Turkey's credibility in debt markets despite continuing
triple-digit interest rates and high, although falling,
inflation.
The sources of Turkish military expenditures include the Ministry
of National Defense budget, the Turkish Defense Fund, income from
the Turkish Armed Forces Foundation, foreign military aid, income
from a special remuneration earmarked for the Ministry of Defense
and funds allocated by the Department of the Treasury for loan
payments.
ROLE OF THE ARMED FORCES
SIZE OF THE ARMED FORCES:
The total size of the Turkish armed forces, the second largest
force in NATO, is 609,700 divided among the army (495,000), air
force (60,100) and navy (54,600). In addition, there is a
separate constabulary force, the Jandarma, which is responsible
for maintaining order in rural areas. In peacetime, the 150,000
Jandarma personnel fall under the direction of the Interior
Ministry rather than the Turkish General Staff (TGS); however,
their commander and many senior officers are serving army
officers. Coast Guard personnel (1,050) are navy personnel
assigned to Coast Guard missions. The Coast Guard falls under
the direction of the Interior Ministry in peacetime.
Turkey participates in a variety of peacekeeping operations.
Turkey has 700 troops deployed in Bosnia as part of the
Stabilization Force (SFOR) and it maintains a mechanized infantry
company in SACEUR's strategic reserve for SFOR. One Turkish
frigate is part of the "Standing Naval Force Mediterranean"
(STANAVFORMED), another frigate is on a 5 day on-call status and
a minesweeper is on a 7 day on-call status in support of SFOR's
maritime operations. One F-16 fighter squadron of 5 aircraft is
based in Ghedi, Italy to support SFOR air operations over Bosnia.
Turkey has volunteered up to 100 observers to the OSCE Kosovo
Verification Mission (KVM) and a headquarters staff element to
the French-led Kosovo Extraction Force. During 1998, the
Government of Turkey (GOT) donated USD 25,000 to the Bosnian
demining effort. Turkey continues to participate in the
Temporary International Presence in Hebron (TIPH). Approximately
80 Turkish military personnel are assigned to Operation Northern
Watch (ONW), to enforce the no-fly zone over northern Iraq.
Turkey also has contributed 5 officers since 1994 to the
Observation Mission in Georgia (UNOMIG), 7 officers since 1991 to
the Iraq/Kuwait Observation Mission (UNIKOM), and several police
officers in the Preventative Deployment Force (UNPREDEP) in the
former Yugoslav Republic of Macedonia and the multinational
police forces in Albania.
COMMENTS ON ITS POLITICAL ROLE:
Turkish military forces play a significant role in domestic
politics. They are the most respected institution in Turkey, and
they take very seriously their traditional role as guardian of
the Ataturk legacy of a secular, western-oriented Turkey. The
military has staged three direct coups since 1960, most recently
in 1980, which was prompted by a collapse of Turkey's internal
economic/security situation. Turkey returned to civilian rule in
1983, and the military drew back from an overt role in politics.
However, the TGS retains strong political influence exercised
through the National Security Council (NSC), a constitutional
body chaired by the president which consists of five civilians
(the president, the prime minister, foreign, interior and
national defense ministers) and five general officers (chief of
the TGS, the three service chiefs and the commander of the
Jandarma). The Secretary-General of the NSC is an active duty
general officer of four-star rank.
The Islamist-led government of Necmettin Erbakan resigned in June
1997, in large part because of TGS pressure on the government to
adhere to secular practices. The succeeding government of Prime
Minister Yilmaz, which lost a no-confidence vote in November 1998
due to a corruption scandal, faced continued pressure to
implement the agenda first enunciated at the NSC in February 1997
when Erbakan was prime minister. The new coalition government
headed by Buelit Ecevit faces the same requirement. The new
(August 1998) leadership of TGS has adopted a much lower public
profile than its predecessors, and this has ameliorated relations
between the military and the politicians.
CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS?
The three armed services are subordinate to the TGS which is
directly under the authority of the prime minister in peacetime
and the president when Turkey is at war. The Defense Ministry
has several interrelated functions with the TGS (primarily
defense procurement) but is separate and plays no significant
role in formulating TGS policy. The chief of the TGS has a
higher protocolary rank than any minister other than the prime
minister.
The president and the prime minister sit on the Supreme Military
Council (SMC), which meets at least once a year, but recently
every six months, to decide upon all flag/general officer
promotions, assignments and retirements. It also rules on
expulsions from the services, usually for membership in
proscribed religious or extremist organizations. The prime
minister normally appoints the chief of the TGS and there has
been only one instance in the last 20 years when the prime
minister has not selected the individual whom the senior Turkish
military leadership had proposed. Other than participation in
the SMC, the civilian leadership is not normally directly
involved in any promotions, assignments or retirement selections.
Thus, the Turkish military enjoys considerable institutional
independence concerning personnel matters.
REDUCING MILITARY SPENDING
FEASIBILITY OF REDUCING MILITARY SPENDING:
The Government of Turkey is not likely to reduce military
spending over the next five years. To the contrary, the TGS has
an ambitious USD 150 billion, 25-30 year modernization plan
designed to ensure Turkey can cope with regional threats, keep
pace with NATO modernization, and develop its indigenous
military-industrial base. Turkey borders on three state sponsors
of terrorism (Syria, Iraq and Iran), all of whom also have
varying degrees of weapons of mass destruction (WMD)(for Iran and
Iraq this includes nuclear) capability. Despite the demise of
the Soviet Union, Turkey firmly believes it is only a matter of
time before Russian hegemonism returns to the Caucasus, and
Turkey is developing foreign policy initiatives aimed at
expanding its regional influence in the Caucasus and the Balkans.
Since the Imia/Kardak crisis with Greece in January 1996, the
Turkish military has given greater attention to Greece's
potential as a military threat. Greece's "Joint Defense
Doctrine" with the Government of Cyprus and attempts by the
Government of Cyprus to acquire S-300 missiles in 1998 have
exacerbated the tensions always present in the Aegean between
Greece and Turkey. Overall, Greece is viewed more as a military
irritant than a genuine threat.
Turkey also faces a significant internal threat from the
separatist/terrorist Kurdistan Workers' Party (PKK). Turkey
claims that more than 30,000 civilians and soldiers have been
killed in the last 14 years in the GOT's battles with the PKK.
In 1998, Turkey made some military progress in reducing the PKK's
ability to launch terrorist attacks in the Southeast. Through
the threat of military action, Turkey also convinced Syria to
expel PKK leader Abdullah Ocalan from his Damascus headquarters
and to limit PKK operations in and from Syria. Ocalan's flight
to Rome and Italy's subsequent refusal of Turkey's request for
extradition has soured Turkish relations with Italy.
U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING:
The U.S. does not encourage reduced Turkish military spending
per se, given Turkey's NATO membership and our desire to
encourage burdensharing by alliance members. In fact, the U.S.
encourages Turkey to modernize its forces and promote
interoperability of equipment through purchases of U.S. military
equipment. We do, however, coordinate with Turkey on disarmament
efforts such as the Treaty on Conventional Forces in Europe (CFE)
and the arms control and regional security component of the
Middle East Peace Process in which Turkey has long played a
positive role.
COUNTRY EFFORTS TO REDUCE MILITARY SPENDING:
With a long shopping list and limited economic resources, the TGS
increasingly has been setting priorities on its procurement
efforts. In addition, the Turkish armed forces have engaged in
some downsizing after stabilizing the situation in the Southeast.
The Turkish army, the largest of the services, plans to reduce
its size further within the next five years and is researching
options, such as developing a reserve component system similar to
that in the U.S. The Turkish navy recently has decommissioned
old destroyers and acquired more modern frigates to achieve
long-term savings.
HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO
RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO
THE UN REGISTER OF CONVENTIONAL ARMS?
Turkey provides accurate data annually to the UN regarding
conventional arms transfers and to NATO on its defense
expenditures. In 1998, Turkey participated in the UN Register of
Conventional Arms. Turkey has regularly submitted standardized
MILEX reports to the UN from 1982 to 1994.
HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY
SPENDING?
Turkey participates in the CFE and OSCE processes and the arms
control and regional security component of the Middle East Peace
Process. Turkey also endorses Annex 1B on the Dayton Accords
concerning regional stabilization and supports the build-down of
forces in the former Yugoslavia.
ASSESSMENT OF MILITARY BUDGET ACCURACY
IS THE MILITARY BUDGET ACCURATE AND COMPLETE? TO WHAT DEGREE IS
THE MILITARY BUDGET TRANSPARENT?
Some part of the funding for the Jandarma command, the Interior
Ministry and the Coast Guard may be used partially for military
purposes, including the fight against the PKK. Other budget
items which may have some military purposes include the Guard
Command of the Turkish parliament, pensions, national civil
budgets, construction costs, external military debt payments,
defense industry support funds and funds provided by the
Foundation of the Armed Forces. In the Southeast, the police may
also perform some military functions. Defense budgets are
prepared in accordance with state planning organization and
Ministry of Finance strictures and are subject to approval by the
General Assembly of the Turkish Grand National Assembly. The
Ministry of Finance supervises payments and contracts, and
defense expenditures are subject to Ministry of Finance audits at
the end of each fiscal year.
UKRAINE
MILITARY SPENDING
REPORTING PERIOD: January 1 to December 31, 1998.
AMOUNT:
Ukrainian Hryvnya (Hr) 1.501 billion (equal to USD 600.400
million, at an averaged rate for the year of Hr 2.5 equals USD
1.0).
PERCENTAGE OF GDP:
Approximately 1.5 percent, based on a nominal GDP of Hr 101.900
billion in 1998 (USD 40.760 billion).
PERCENTAGE OF BUDGET: 6.0 percent.
TRENDS IN REAL TERMS:
In 1998 the national defense category of the budget (210) fell
slightly by 0.1 percent of nominal GDP, while real GDP fell an
estimated 1-1.5%. Military spending consequently fell by
approximately 0.12 percent in real terms.
Two other categories of the budget may be construed as military.
Category 604 (Main directorate of the Command of the National
Guard of Ukraine) was budgeted at Hr 59.210 million (equal to USD
23.684 million). Category 606 (Main directorate of internal
troops of the Ministry of Internal Affairs of Ukraine) was
budgeted at Hr 75.000 million (equal to USD 30.0 million).
ROLE OF THE ARMED FORCES
SIZE OF THE ARMED FORCES:
The manpower strength of the Ukrainian armed forces remains
difficult to establish exactly. A variety of sources, official
and unofficial, leads us to peg it at around 350,000, which
represents an approximately five percent reduction during 1998
from the 1997 level of about 365,000.
COMMENTS ON ITS POLITICAL ROLE:
Some active duty military officers have run for office and sat in
elective bodies such as the national parliament. But they have
seldom played a significant role in those bodies. Nor have the
armed forces played an active part in Ukraine's broader political
life. Most observers believe the Ukrainian armed forces would be
unlikely to support a coup or extra-constitutional action. Apart
from traditions of extreme hazing of their own recruits, the
Ukrainian armed forces have a generally good human rights record.
CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS?
The president of Ukraine, as commander-in-chief, exercises the
constitutional authority to appoint and remove military officers.
Under the constitution, parliament does not "advise and consent"
to these actions except at the cabinet-minister level.
REDUCING MILITARY SPENDING
FEASIBILITY OF REDUCING MILITARY SPENDING:
REDUCING MILITARY SPENDING hinges on reform and restructuring of
the Ukrainian armed forces. To some extent, this will entail a
temporary increase in spending as officers are pensioned off,
housing (a statutory benefit for retired officers) is built,
bases are closed and cleaned up, and so forth. Lack of funds for
this purpose continues to impede genuine ability to down-size the
armed forces and the cost of running them.
U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING:
Under the NATO-Ukraine Charter, the United States has helped
develop the Joint Working Group on Defense Reform to assist
Ukraine in taking steps toward restructuring its defense
establishment. Under the Security Committee of the Gore-Kuchma
Binational Commission, the United States shares experiences on
closing bases. The Nunn-Lugar Cooperative Threat Reduction (CTR)
Program, by providing assistance for destroying Ukraine's heavy
bombers, ICBMs, and missile silos (among other activities), is
helping the Ukrainians to shut down their Strategic Rocket Forces
and their strategic bomber forces.
COUNTRY EFFORTS TO REDUCE MILITARY SPENDING:
The Ukrainians have participated in the programs described above.
They have also eliminated conventional forces equipment in
accordance with the CFE Treaty. In addition, military spending
has been reduced arbitrarily as a result of the decline in gross
domestic product and in government revenues over the past nine
years.
HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO
RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO
THE UN REGISTER OF CONVENTIONAL ARMS?
The Ukrainians have apparently been meeting their obligations to
report data on arms sales in the framework of the Wassenaar
Arrangement. They also appear to be in compliance with the
Treaty on Conventional Armed Forces in Europe (CFE) and its
reporting requirements. Their data on conventional arms
transfers for the UN Register of Conventional Arms seems
generally accurate. In 1998, Ukraine participated in the UN
Register of Conventional Arms. Ukraine has submitted
standardized MILEX reports to the UN three times--1993, 1994, and
1997.
HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY
SPENDING?
No such talks exist per se. To the extent that the CFE Treaty
affects levels of military spending, Ukraine is active in the
Joint Consultative Group negotiating adaptation of the treaty in
Vienna.
ASSESSMENT OF MILITARY BUDGET ACCURACY
IS THE MILITARY BUDGET ACCURATE AND COMPLETE?
The budget consists of expenditures that are authorized by the
parliament at the conclusion of a budget process more or less
like ours. Actual allocations of funds are made by the executive
branch out of the revenues on hand. In recent years, the funds
disbursed to the Ministry of Defense have reportedly fallen well
short of the budget figures. The amount of the shortfall is not
released publicly.
In order to survive, some military units have adopted various
strategies depending on their economic potential. For example,
construction units may sell their services, units that control
natural resources (such as rock quarries) may sell them off, and
naval vessels may seek sponsors among cities or businesses that
would provide uniforms, food supplements, and so forth.
TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT?
On an official level the military budget is transparent, and
accountability is clear. But military spending shares the
two-sided character of the Ukrainian economy as a whole. There
is an official side, which is reflected in statistics, and the
"shadow" side described above, which is not. At this point, the
"shadow" side of military spending appears to be a survival
mechanism above all. This mechanism is common to a variety of
Ukrainian institutions. By its nature, it is nearly impossible
to quantify. Because it operates at unit levels, "shadow"
funding does not appear to be an efficient way for the military
to escape civilian control. For the same reason, however, it
opens up possibilities for corruption and abuse.
ZIMBABWE
MILITARY SPENDING
REPORTING PERIOD:
July 1, 1997 to December 30, 1998, are listed below, reflecting
the Government of Zimbabwe's (GOZ) extension of the last budget
to 18 months in order to change the fiscal year to coincide with
the calendar year. Also included are projected figures of
military expenditure contained in the GOZ 1999 budget.)
AMOUNT:
July 1, 1997 - December 30, 1998: z$5.42 billion (USD 317.2
million at USD 1 = z$17).
The GOZ's 1999 proposed defense, announced on October 15, is
z$5,240 billion (USD 141.62 million at the current exchange rate
of z$37 - USD 1). In local currency terms it is a nominal 50
percent increase over the previous period's budget. It contains
no provision for Zimbabwe's military involvement in the
Democratic Republic of the Congo (DROC), which is apparently
being handled off-budget. The budget was commended for having
some positive elements, but was criticized by economists,
parliament, and political commentators for allocating more
resources to the Ministry of Defense at the expense of other
sectors of the society.
PERCENTAGE OF GDP:
July 1, 1997 - December 30, 1998: 3 percent.
Projected CY 1999: 3.2 percent based on projected GDP of z$163.4
billion.
PERCENTAGE OF BUDGET:
July 1, 1997 - December 30, 1998: 7.7 percent.
Projected CY 1999: 9.2 percent.
TRENDS IN REAL TERMS:
Last year's report of Zimbabwean military expenditure at 7.7
percent of the national budget and 3 percent of GDP was described
as relatively stable.
Assuming 30 percent inflation in 1999, the current working
assumption, defense spending is slated to grow by approximately
20 percent in real terms. We have not yet learned which areas of
the military are expected to benefit from the increased budget.
ROLE OF THE ARMED FORCES
SIZE OF THE ARMED FORCES:
In early 1998, the Zimbabwean government announced plans to
downsize and restructure the Zimbabwean Defense Forces (ZDF) from
approximately 40,000 to 30,000 (the army was to be 25,000 and air
force 5,000) beginning in August 1998. The reasons given by the
GOZ were the reduction in external threats against Zimbabwe and
budget reductions required to better support the national
economy. Following limited efforts to begin that process, the
GOZ stopped the downsizing and restructuring in response to
complaints from senior and mid-level military officers that the
exercise was adversely affecting morale in the armed forces, as
well as pushing up the already huge costs of retirement pay and
benefits. In August, President Mugabe, as chairman of the
Southern African Development Community (SADC) organ on politics,
defense, and security, deployed Zimbabwean troops to the DROC in
response to attacks on the Kabila government, ostensibly by
Rwanda and Uganda in support of Congolese rebels. To date,
Zimbabwean troop strength in the DROC is estimated at
approximately 6,000. The ZDF continues to have UN peacekeeping
personnel on duty in Angola.
COMMENTS ON ITS POLITICAL ROLE:
Zimbabwe's defense forces are under very firm civilian control.
Under current circumstances, the military establishment poses
little threat to the civilian political leadership, although we
believe that dissatisfaction with GOZ policies is growing within
the military as in other segments of society. Specifically, the
professional military is widely believed to be opposed to the
GOZ's deepening intervention in the DROC in which the Zimbabwean
soldiers are fighting a guerrilla war in unfamiliar and difficult
terrain, with little motivation, and no popular support for their
involvement at home. President Mugabe has maintained that
Zimbabwe will remain in the Congo until the rebels are defeated
and Rwanda and Uganda withdraw.
CAN CIVILIAN AUTHORITIES APPOINT AND REMOVE MILITARY OFFICERS?
Selection, promotion and posting of all officers are political
decisions closely guarded by the senior political leadership.
Promotions to the most senior positions continue to be based
heavily on the political reliability and loyalty of the officers
involved. The political leadership would have little difficulty
removing an undesirable officer. In the last month, President
Mugabe has filled several key government positions with active
and retired military officers, most notably as the
director-general and deputy director-general of the Central
Intelligence Organization (CIO).
REDUCING MILITARY SPENDING
FEASIBILITY OF REDUCING MILITARY SPENDING:
See classified annex.
U.S. EFFORTS TO ENCOURAGE REDUCED MILITARY SPENDING:
The United States has used a variety of means to encourage
Zimbabwe to reduce the size of its forces and restrict military
spending, including lobbying of senior officials by the
ambassador, AID mission director, defense attachˇ and other
embassy officers. In light of the estimated z$15 million daily
which the GOZ is spending to prosecute the war in the DROC, the
ambassador and other mission officers have urged the GOZ to
withdraw its troops from the DROC, push for a cease-fire, and
work towards a negotiated solution to that conflict. In
addition, reduction of defense forces is a theme stressed in many
of the U.S. military lectures at Zimbabwe's staff college, in
which large numbers of ZDF members participate. The ZDF also
funds training courses which deal with defense resource
management.
COUNTRY EFFORTS TO REDUCE MILITARY SPENDING:
The previously announced planned reduction in the armed forces by
approximately 10,000 soldiers was designed to substantially
reduce GOZ military expenditures. Similarly, the proposed
restructuring of the ZDF was intended to create a more
cost-efficient and streamlined military. The mission continues
to urge the GOZ to implement those plans and supports IMF
conditionalities that seek transparency in the GOZ budget for its
involvement in the DROC war and a curtailment of those expenses.
HAS THE COUNTRY PROVIDED ACCURATE MILITARY SPENDING DATA TO
RELEVANT INTERNATIONAL ORGANIZATIONS AND ARMS TRANSFER DATA TO
THE UN REGISTER OF CONVENTIONAL ARMS?
Post is unable to determine what information Zimbabwe provides to
international organizations. However, Zimbabwe has not provided
any arms transfer data to the UN, according to Ministry of
Foreign Affairs officials. This was also confirmed with the UN.
In 1998, Zimbabwe did not participate in the UN Register of
Conventional Arms. Zimbabwe has never submitted a standardized
MILEX report to the UN.
HAS THE COUNTRY PARTICIPATED IN REGIONAL TALKS TO REDUCE MILITARY
SPENDING?
Zimbabwe consults regularly with neighboring and regional
countries through the SADC and Organization of African Unity.
The subject of REDUCING MILITARY SPENDING is addressed in these
venues.
ASSESSMENT OF MILITARY BUDGET ACCURACY
IS THE MILITARY BUDGET ACCURATE AND COMPLETE?
The GOZ figures fail to account for military-related expenses
which are not identified in budgets for other ministries, such as
military construction performed by the Ministry of Local
Government and National Housing and drawn from that ministry's
funding. In addition, the military budget does not include debt
repayment for previous defense acquisitions or the amount of the
"contingency" reserve which exists elsewhere in the overall
budget and is available for unprogrammed expenses/purchases. The
GOZ's 1999 budget does not include any figures for the country's
military involvement in the DROC which began in August 1998 and
is continuing as of this writing.
TO WHAT DEGREE IS THE MILITARY BUDGET TRANSPARENT?
See classified annex.
[End of Document]