CHAPTER III

ASSESSMENT OF COUNTRY CONTRIBUTIONS

 

 

This chapter presents the Department’s detailed assessment of U.S., NATO and Pacific allies’ and Gulf Cooperation Council (GCC) countries’ contributions in a broad range of responsibility sharing indicators – which are described in detail in the following sections. The purpose and utility of each indicator is explained, and important caveats and limitations are noted. Relevant statistics are summarized in the accompanying charts. The Annex provides further information on each of these indicators, as well as other related data.

As described previously, this analysis provides a comprehensive assessment based on countries’ ability to contribute and trends in country efforts. For most indicators of defense resources and forces discussed below, this comparison is done by measuring a nation’s share of the aggregate contribution relative to its share of total ability to contribute (e.g., its share of total defense spending relative to its share of total GDP). In this way, an assessment can be made as to whether or not a nation’s effort is commensurate with its ability.

The following assessments are based on the most recent, complete, and reliable data available. Notes on uses and sources of these figures, and a country-by-country summary of selected responsibility sharing statistics, can be found in the Annex, along with a compendium of supporting data.

Countries are also assessed according to the criteria originally specified by the FY 1997 Defense Authorization Act to provide continuity with last year’s Report. These assessments are also provided in the Annex.

Responsibility Sharing Indicators

This chapter assesses allies’ contributions in responsibility sharing indicators that are grouped together in eight major categories: (1) Defense Spending; (2) Multinational Peace Operations; (3) Multinational Reaction Forces; (4) Active-Duty Military Personnel; (5) Military Forces, (6) Defense Modernization Spending, (7) Cost Sharing; and (8) Foreign Assistance. The indicators in these categories are described briefly below.

  1. Defense Spending: This indicator compares the most comprehensive indicator of defense effort (defense spending) to the most comprehensive indicator of ability to contribute (Gross Domestic Product (GDP)).
  2. Multinational Peace Operations: There are two major indicators in this category: personnel contributions to multinational peace operations, and funding contributions to UN peace operations. These are assessed relative to ability to contribute as follows:
    1. National shares of total allied funding for UN peace operations are compared to national shares of total allied GDP.
    2. National shares of total allied personnel contributions to UN and major non-UN peace operations are compared to national shares of total allied labor force.

  3. Multinational Reaction Forces: The post-Cold War environment places a premium on high-readiness military "reaction forces" suitable for multinational operations beyond national territory. This indicator measures each allied nation’s multinational reaction forces contributions as a share of the aggregate of all nations covered in the Report. Each nation’s reaction forces contributions are compared to its ability to contribute (its share of aggregate GDP) in order to provide a basis for assessing relative performance in this indicator.
  4. Active-Duty Military Personnel: The number of active-duty military personnel maintained by a country is an important indicator of its responsibility sharing effort. Performance relative to ability to contribute is assessed by calculating active-duty military strength as a percentage of labor force.
  5. Military Forces: This category incorporates three indicators that assess allies’ total ground, naval, and air forces contributions on the basis of major weapons systems inventories. For ground forces these include tanks, artillery and attack helicopters, while the naval and air forces analyses measure principal surface combatants and combat aircraft. Assessments of relative performance are derived by comparing each nation’s share of total allied force contributions to its share of aggregate GDP.
  6. Defense Modernization Spending: The events of the past decade have demonstrated that the United States and its allies must develop new and improved military capabilities in order to meet the security challenges of the post-Cold War world. These include precision attack, C3I (Command, Control, Communications and Intelligence), strategic mobility and sustainability, theater missile defense, NBC force protection, and SEAD (Suppression of Enemy Air Defenses) capabilities. Since it is impractical to track progress in each of these capabilities independently, this indicator instead presents a more generalized assessment of allied defense modernization efforts by measuring the percentage of total defense spending devoted to major equipment procurement and research and development.
  7. Cost Sharing: This indicator covers bilateral cost sharing between the United States and an ally or partner nation that either hosts U.S. troops and/or prepositioned equipment, or plans to do so in time of crisis. The Department of Defense distinguishes between two different types of bilateral cost sharing: direct payment of certain U.S. stationing costs by the host nation (i.e., on-budget host country expenditures), and indirect cost sharing deferrals or waivers of taxes, fees, rents, and other charges (i.e., off-budget, forgone revenues). Assessments of relative effort are made by measuring the percentage of U.S. stationing costs paid by each host nation.
  8. Foreign Assistance: This indicator assesses nations’ foreign assistance funding contributions, which are important for maintaining global peace and stability, and represent notable economic commitments by donor nations. Foreign assistance comprises both bilateral aid given directly by one nation to another, and multilateral aid given by a nation to an international development bank (e.g., the World Bank) or other multinational agency (e.g., the European Commission), where it is pooled with other contributions and then disbursed. Relative performance is judged on the basis of the percentage of national GDP devoted to foreign assistance. In order to minimize the distortions caused by excessive year-to-year volatility in the size and timing of foreign assistance contributions, a three-year average was used to assess allied contributions in this indicator.

 

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DEFENSE SPENDING

Defense spending is the most important single indicator of allied responsibility sharing efforts, since it offers the clearest evidence of allied nations’ willingness to commit resources to the common defense. Assessing defense spending relative to Gross Domestic Product (GDP) allows individual nation’s contributions to be judged in comparison to their ability to contribute.

Chart III-1 depicts the wide variations in 2000 per capita GDP (a widely accepted indicator of prosperity and standard of living) among the nations addressed in this Report – from around $3,000 in Turkey to over $40,000 in Luxembourg. Given such great disparities in standards of living, "equitable" defense spending among nations may not necessarily mean that each nation should devote the same proportion of its national wealth to defense. That is, it may be more fair for nations with the strongest economies and wealthiest populations to carry a proportionately larger share of the burden of providing for the common defense.

Chart III-1 reveals that half of the countries addressed in this Report that have below-average per capita GDP, spend above-average percentages of GDP on defense: Saudi Arabia, Kuwait, Oman, Bahrain, the United Arab Emirates, Turkey, Greece, the Republic of Korea, and France. In contrast, over half of those that have above-average standards of living spend below-average percentages of their GDP on defense: Luxembourg, Japan, Norway, and Denmark.

Chart III-2 depicts 1990-2000 defense spending trends for the United States, our NATO and Pacific allies, and our GCC partners. The chart shows that, during this period, the United States experienced the steepest decline in defense spending, while our NATO allies’ overall defense spending fell considerably, but much less sharply. United States, GCC, Pacific, and non-U.S. NATO defense spending all grew slightly in 2000. Refer to Table E-4 in the Annex for further information on defense spending trends.

Excluding the GCC countries, whose defense spending in 1990-1991 was seriously distorted by the Gulf War, combined real defense spending for all other nations addressed in this Report dropped by about 19 percent between 1990 and 2000, reflecting adjustments to the post-Cold War security environment. The largest declines during this period were experienced by Germany (-30 percent), the United Kingdom (-29 percent), Belgium (-26 percent), the United States (-25 percent), and Canada (-24 percent). The Czech Republic and Hungary also experienced very substantial decreases in defense spending over the past decade, though it must be noted that these nations maintained unusually high levels of defense spending while members of the Warsaw Pact. In contrast, several nations achieved real increases in their defense budgets over this period – Turkey (53 percent), Luxembourg (37 percent), Greece (33 percent), the Republic of Korea (28 percent), Japan (16 percent), Poland (8 percent) and Portugal (5 percent).

Looking more specifically at defense spending trends in the past year we see that, between 1999 and 2000, seventeen countries achieved real defense spending growth, with the biggest gains posted by Oman (30 percent), Bahrain (22 percent), the United Arab Emirates (14 percent), Kuwait (14 percent), Turkey (13 percent), Hungary (8 percent), Spain (6 percent), the Republic of Korea (4 percent), Greece (4 percent), and the Czech Republic (4 percent).

Certain expenditures outside of defense budgets also promote shared security interests, and should be recognized – such as Germany’s investments in the infrastructure of eastern Germany, and its financial support for economic and political reform in the new democracies of Central Europe. Nonetheless, it is essential that our allies maintain their defense budgets at appropriate levels, in order to ensure that they remain able to field effective military forces. In our discussions with allies and partners, the Department continues to urge sustained efforts in this area.

Defense Spending as a Percentage of GDP

Defense spending relative to GDP combines the most comprehensive indicator of defense effort with the most comprehensive indicator of ability to contribute. As a result, it is the most widely used indicator of burdensharing efforts. However, this indicator should not be viewed in isolation from other national contributions to shared security objectives. Also, this measure does not take into account efforts that are not directly reflected in defense budgets, nor does it give credit to those countries that are able to make more effective use of their defense resources.

Chart III-3 shows the percentage of GDP spent on defense by the United States and its allies in 2000. (Trend data since 1990 are found in the Annex in Table E-5). The 2000 data exhibits the same pattern that it has throughout the 1990s: the GCC nations, along with Greece and Turkey, spent the highest percentages of GDP on defense, while Japan, and several of our NATO allies (Luxembourg, Canada, Spain, Belgium, Germany, Denmark, the Netherlands and Hungary) spent the smallest proportions of GDP on defense.

  • United States’ defense spending as a percentage of GDP has declined from over 5.5 percent in 1990 to three percent in 2000. During this same period, non-U.S. NATO defense spending relative to GDP fell from three percent to two percent.
  • In 2000, Turkey (5.7 percent) and Greece (4.9 percent) once again exceeded all other NATO nations in defense spending as a percentage of GDP, and were also two of the five Alliance members that experienced growth in this indicator (9 percent and 1 percent respectively) during 2000 – the others were the Czech Republic (3 percent), Hungary (3 percent), and Spain (2 percent).
  • Among NATO nations, France and the United Kingdom also consistently rank high in terms of defense spending as a percentage of GDP, trailing Turkey, Greece, and the United States in this measure during 2000. On the other hand, Germany – which ranked seventh among NATO nations in this indicator at the end of the Cold War – now ranks 14th, ahead of Belgium, Spain, Canada, and Luxembourg.
  • Although Japan spent about one percent of GDP on its defense forces in 2000, its defense spending remains the second highest of all the countries in this Report, after that of the United States. The Republic of Korea’s 2000 defense spending increased by over four percent, but, as a percentage of GDP, declined by nearly four percent from 1999 levels.
  • Four of the GCC partners increased the percentage of their GDP dedicated to defense in 2000: Kuwait (8.1 percent), Oman (7.9 percent), Bahrain (7.4 percent), and the United Arab Emirates (6.5 percent). These same nations (together with Turkey and Greece) also had the greatest percentage increases in this indicator between 1999 and 2000 (7 percent, 21 percent, 17 percent, and 10 percent, respectively) of any of the nations covered in this Report. The six GCC nations had the highest 2000 defense spending/GDP percentages of all the nations in this Report.

Assessment of Defense Spending Contributions

The dashed vertical line on Chart III-3 depicts the average level of defense spending as a percentage of GDP for all the nations in this Report (2.3 percent). It therefore provides insight into the issue of equity among countries’ defense efforts, by allowing contributions to be compared with the average. The United Kingdom and those countries shown above it on the chart (i.e., France, the Republic of Korea, the United States, Greece, Turkey and the GCC countries) are doing above average in defense spending as a percentage of GDP. Conversely, the Czech Republic and those countries listed below it on this chart spent below average percentages of their GDP on defense. See Section C of the Annex for additional statistics relating countries’ contributions relative to their ability to contribute.

Nine nations were substantially (at least 20 percent) above average in this indicator. The United States was almost 30 percent above average, while Greece, Turkey, and all of the GCC nations spent percentages of their GDP on defense that were at least twice the average. Yet, there were also nine nations that were substantially (more than 20 percent) below average in this indicator, namely Hungary, the Netherlands, Denmark, Germany, Belgium, Spain, Canada, Japan and Luxembourg (which spent less than one-third of the average).

These assessments are summarized in Charts I-1A and I-1B.

 

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MULTINATIONAL PEACE OPERATIONS

Contributions to multinational peace operations are among the most significant indicators of allied responsibility sharing, particularly when these require the deployment of troops on the ground for extended periods. Such contributions have become increasingly important as peace operations have proliferated over the past decade. Within the past two years, U.S. or allied personnel have served in East Timor, Kosovo, Bosnia, Croatia, Cyprus, Lebanon, the Golan Heights and Sinai Peninsula, Tajikistan, on the India-Pakistan and Iraq-Kuwait borders, and in Western Sahara, Sierra Leone, and the Democratic Republic of the Congo.

Our assessment of personnel contributions includes participation in both UN and major non-UN multinational peace operations during the past year. However, since it has proven impractical to assemble complete and comparable data on funding for non-UN peace operations, financial contributions are assessed for UN operations only.

Allied funding contributions to UN peacekeeping missions actually declined by about 70 percent from 1994 - 1999, but this is almost certainly offset by increases in funding for non-UN operations such as SFOR and KFOR (for which complete and reliable data is not available). Saudi Arabia, Portugal, Qatar, Turkey, Kuwait, Japan, Greece, Spain, and the United States increased their funding contributions in 1999, though, except for Japan (which raised its contributions by about $84 million), the individual nations’ increases were modest in real terms.

Chart III-4 shows that Japan contributed the largest single share of 1999 UN peace operations funding, closely followed by the United States. Indeed, these two nations provided almost two-thirds of the total peace operations funding contributions made by all of the countries covered in this Report – and adding Germany, the United Kingdom, Italy and France raises the figure to 88 percent of total contributions. However, it must be noted that these countries include six of the ‘Group of Seven’ industrial nations that have the largest (and, in most cases, wealthiest) economies in the world.

There has been dramatic growth in allied personnel contributions to peace operations in recent years – particularly for NATO-led operations. When NATO’s Bosnia operation began in late 1995, all of the nations covered in this Report combined had about 8,000 peacekeepers serving worldwide. By the end of 2000, this figure had risen to over 63,000.

Chart III-5 reveals that the peace operations personnel burden is distributed far more widely than the burden of funding UN peace operations. It is particularly noteworthy that major contributions are made by relatively poor countries such as Turkey, Poland, and Greece, while the United States contributes less than one-fifth of the whole. Nonetheless, the United States and the "Big Four" NATO countries combined still account for about two-thirds of total personnel.

Assessment of Contributions to Multinational Peace Operations

Chart III-6 compares each nation’s share of total funding contributed to UN peace operations to its share of total GDP. On this basis, Japan and Qatar contributed substantially (at least 20 percent) more than their fair share of peace operations funding. Furthermore, thirteen nations contributed substantially (at least 20 percent) less than their fair share, including Luxembourg, Portugal, the United States, Greece, the Czech Republic, Turkey, Hungary, the Republic of Korea, and all five remaining GCC nations.

Chart III-7, which compares nations’ shares of total multinational peace operations personnel contributions to their shares of total labor force, reveals that our NATO allies are doing much better in peace operations personnel contributions. Yet, both our Pacific allies contributed less than their fair share, while none of the GCC nations but the United Arab Emirates contributed any peace operations personnel in 2000. Thirteen nations (half the total) contributed personnel shares that were substantially (at least 20 percent) greater than their labor force shares: the United Arab Emirates, Norway, Greece, Denmark, Italy, Portugal, France, Belgium, the Netherlands, Germany, the United Kingdom, Spain, and the Czech Republic. However, nine countries contributed substantially less than their fair share, including Turkey, the United States, the Republic of Korea, Japan, and the remaining five GCC nations.

These assessments are summarized in Charts I-1A and I-1B.

 

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MULTINATIONAL REACTION FORCES

Maintaining and improving our capability, and that of our allies, to respond rapidly and multilaterally, both to conventional military aggression and to lesser threats that endanger common interests. is a key element of U.S. security strategy. Multinational Reaction Forces – that is, high-readiness military units suitable for multinational operations remote from national territory, are the practical manifestation of that capability.

NATO Reaction Forces

Of the countries covered in this Report, our NATO allies make by far the most substantial multinational reaction forces contributions. In accordance with NATO’s post-Cold War strategic concept, Alliance members continue to develop forces that can be rapidly transported to remote theaters of operation; function despite a lack of pre-established lines of communication and host nation support; and fight effectively in multinational formations at division and even corps level.

NATO’s ground Reaction Forces are organized into the Immediate Reaction Force Land (IRF(L)) and Allied Command Europe (ACE) Rapid Reaction Corps (ARRC). The IRF(L) is a brigade-sized unit of about 5,000 troops, but is to be expanded into a division-sized force that will be known as the Immediate Reaction Task Force Land (IRTF(L)). The ARRC can deploy a force of up to four divisions from a pool of ten national and multinational divisions. The United Kingdom provides the bulk of the ARRC’s headquarters and corps troops, and contributes two divisions. Germany, Greece, Italy, Turkey, and the United States each provide one division, while the Czech Republic, Denmark, Hungary, Poland, Portugal, and Spain each contribute a brigade. Finally, the ARRC includes Multinational Division Central, which comprises Belgian, Dutch, German, and British brigades, and Multinational Division Southern, which includes Greek, Italian, and Turkish brigades.

NATO has four multinational naval Immediate Reaction Forces formations. Standing Naval Force Atlantic (STANAVFORLANT) comprises six to ten destroyers and frigates, with Canada, Germany, the Netherlands, the United Kingdom, and the United States each permanently contributing one ship, and Belgium, Denmark, Norway, Portugal, and Spain participating part-time. Standing Naval Force Mediterranean (STANAVFORMED) is organized along similar lines, with ships from Germany, Greece, Italy, the Netherlands, Spain, Turkey, the United Kingdom, and the United States. Mine Countermeasures Force Mediterranean (MCMFORMED) comprises four to six mine countermeasures vessels (MCMV) and a mine countermeasures command and support ship (MCS). Italy, Germany, Greece, Turkey, and the United Kingdom are full-time, and Belgium, the Netherlands, Spain, and the United States, part-time participants. Mine Countermeasures Force Northern (MCMFORNORTH) has a similar composition, with Belgium, Germany, the Netherlands, and the United Kingdom as permanent contributors, and Denmark, Norway, and Poland providing ships on a part-time basis.

NATO also maintains the Immediate and Rapid Reaction Forces (Air). The former comprise the air component of the ACE Mobile Force, whose land component is the IRF(L). Relatively little unclassified information is available on the composition of national contributions to NATO’s Reaction Forces (Air).

Other Reaction Forces

Although France does not belong to NATO’s integrated military command structure, it possesses large, modern rapid reaction forces, and has repeatedly demonstrated its willingness to contribute them to operations under NATO command. The naval component is represented by the Force d’Action Navale (FAN), comprising an aircraft carrier, nine surface combatants, three amphibious ships, and several nuclear attack submarines and replenishment auxiliaries. Until 1996, the all-professional Force d’Action Rapide (FAR) comprised the ground reaction forces, while the rest of the French Army was limited to homeland defense by political strictures against deploying conscripts abroad. However, in February 1996, President Jacques Chirac announced an end to conscription as part of a major restructuring of all three services. When this restructuring is complete in 2002, the entire French Army will effectively have been transformed into a deployable, all-professional reaction force. The new 136,000-strong force structure will be able to deploy 50,000 troops, whereas the former 238,000-strong force could deploy only 10,000.

Japan and the Republic of Korea have no counterparts to the large, multinational reaction forces provided by our NATO allies. This reflects the very different security situation in Northeast Asia, the bilateral character of our security relationships with the two countries, and the fact that U.S. responsibility sharing policy in this region places greater emphasis on cost sharing than on global military roles and missions. Nevertheless, Japan agreed to assume a larger role in regional affairs in the United States-Japanese Joint Declaration on Security in April 1996, and the Republic of Korea has increased its contributions to collective defense through force modernization and the assumption of greater command responsibilities for combined U.S.-ROK forces.

The United States encourages its GCC security partners to strengthen their provisions for collective defense of the Gulf region. However, post-Gulf War plans to expand the GCC’s multinational, brigade-sized Peninsula Shield Force (which is deployed in northeastern Saudi Arabia, near the Iraqi border) to over 20,000 personnel have not been implemented, and the existing formation is not maintained at full strength. However, the ‘Cooperative Belt’ network, which comprises an integrated regional early warning and secure communications system, was inaugurated in late February 2001.

Finally, it must be noted that the United States maintains substantial high readiness forces in addition to its NATO Reaction Forces. Examples include the Ready Brigade of the Army’s 82nd Airborne Division, the Air Force’s on-call Air Expeditionary Wing, the Navy task forces operating in the Pacific and Indian Oceans, and the forward deployed, battalion-sized Marine Expeditionary Units (MEUs). These forces are retained strictly under national command to meet our worldwide security commitments, and therefore do not count as multinational reaction forces. Furthermore, the United States has greater capabilities to deploy and sustain reaction forces than perhaps all the other nations in this Report combined, and has frequently been called upon to lend these capabilities in support of allied forces in contingency operations.

Chart III-8 shows that the United States contributes the largest single share of multinational reaction forces – nearly a quarter of the total. The United Kingdom, France, Germany, and Italy collectively provide 40 percent of total reaction forces, while Turkey, the Netherlands, Spain and Greece also make notable contributions.

Assessment of Multinational Reaction Forces Contributions

In order to provide insight into what constitutes equitable contributions, Chart III-9 depicts each nation’s share of multinational reaction forces relative to its share of GDP. Over half the nations assessed had reaction forces shares that were substantially larger than their GDP shares: Greece, Turkey, Hungary, Portugal, the Netherlands, Denmark, Poland, Belgium, Bahrain, the United Kingdom, Spain, Italy, France, Kuwait, Norway and Qatar. Four nations (Canada, the United States, Saudi Arabia and the United Arab Emirates) had reaction forces shares that were substantially smaller than their GDP shares. Japan and the Republic of Korea make no multinational reaction forces contributions.

These assessments are reflected in Charts I-1A and I-1B.

 

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Active-Duty Military Personnel

Unlike the preceding section, which addressed the critical subset of allied military forces that is specifically intended for employment in multinational military operations, this section and the next focus on nations’ total active-duty military personnel and forces. The Department believes that a nation’s total contributions of active-duty military personnel and forces are valid indicators of its commitment to collective security, and should be assessed for reasons of completeness.

Active-duty military personnel are one of the most fundamental resources that a nation can contribute to defending shared security objectives. A nation’s ability to contribute is determined by the size of its labor force.

Chart III-10 shows active-duty military personnel as a percentage of labor force from 1990 to 2000. During this period, the U.S. percentage has experienced a slow but steady decline that was somewhat steeper than the decrease among our NATO allies. Following the Gulf War, the GCC countries as a group achieved a notable increase in this indicator through 1995. And, although it recently dropped somewhat from the 1995 peak, the percentage grew again in 1999 and 2000. Japan and the Republic of Korea combined have the lowest percentage of labor force on active-duty (one percent), a level that has remained fairly constant over the course of the past decade.

Assessment of Active-Duty Military Personnel Contributions

Chart III-11 depicts the percentage of its labor force that each nation had in active-duty military service during the year 2000. Eleven countries had above average percentages: Qatar, Oman, Greece, the United Arab Emirates, Bahrain, Turkey, the Republic of Korea, Italy, Portugal, France, and Saudi Arabia. However, seven allies had substantially below average percentages, including Denmark, Germany, Luxembourg, the Netherlands, and the United Kingdom. Canada and Japan ranked even lower, with active-duty military personnel shares less than half as large as total labor force shares. These assessments are summarized in Charts I-1A and I-1B.

 

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MILITARY FORCES

Standing military forces represent an important contribution to shared security objectives, but there is no single, comprehensive indicator that reflects all of the factors that determine military capability. Accordingly, this section is intended to provide an overview of each country’s force contributions using a few widely accepted measures.

Country efforts in this area are summarized in Charts I-1A and I-1B.

Ground Combat Capability

Nations’ ground combat capabilities are measured according to the quantity and quality of their major weapon systems, drawing on static indicators that are widely used within the DoD and NATO. This approach provides more insight into combat potential than do simple counts of combat units and weapons, although it does not consider such factors as manning, ammunition stocks, logistical support, communications, training, leadership, and morale. At this time, there is no generally accepted static measure of ground combat capability that incorporates these factors.

The largest contributors to aggregate ground capability are shown in Chart III-12. The United States provides by far the largest share of ground combat capability of any nation in this Report, followed by the Republic of Korea, Germany, Turkey, Greece, and Poland. However, it should be noted that this assessment credits allies for their entire inventories of major ground weapons systems, although many of these are in reserve formations that could take as much as a year to achieve full combat readiness.

Chart III-13 compares nations’ ground combat capability contributions with their ability to contribute. In 2000, fourteen countries contributed substantially (at least 20 percent) more than their fair shares, including all the GCC countries, Greece, the Czech Republic, Hungary, Turkey, Poland, the Republic of Korea, Denmark, and Norway. There are also seven nations that contributed ground combat capability shares that were substantially less than their fair shares, including France, Belgium, the United Kingdom, Italy, Japan, Canada and Luxembourg.

Naval Force Tonnage

Tonnage is a static measure of aggregate fleet size that provides a more meaningful basis for comparison than do simple tallies of ships. The use of tonnage alone as an indicator does not, however, give any indication of the number, effectiveness, or reliability of the weapons aboard the ships. This indicator also does not assess the less tangible ingredients of combat effectiveness, such as training and morale. Consequently, tonnage data should be taken as only a rough indicator of naval potential.

Chart III-14 shows the nations with the largest shares of aggregate fleet tonnage (excluding strategic missile submarines) for 2000. Note that the U.S. fleet includes some types of vessels not generally found in most allied navies (e.g., aircraft carriers, fleet support, sealift, and amphibious vessels). As a result, the United States has by far the single largest share of fleet tonnage with 60 percent of the total tonnage of all countries in this Report combined. The next largest tonnage shares are those of the United Kingdom, Japan, France, Spain, and Italy.

Chart III-15 depicts national shares of total fleet tonnage relative to GDP shares. In 2000, six countries contributed shares of naval force tonnage that were substantially (at least 20 percent) greater than their GDP shares, including Greece, and Turkey, Bahrain, the United Kingdom, Portugal and the United States. Conversely, eleven nations contributed naval tonnage shares that were substantially smaller than their GDP shares, including Saudi Arabia, Denmark, Norway, Canada, Italy, Qatar, the United Arab Emirates, Germany, Japan, Belgium, and Kuwait. The three landlocked allies – Hungary, the Czech Republic, and Luxembourg – of course contributed none at all.

These assessments are summarized in Charts I-1A and I-1B.

Tactical Combat Aircraft

Combat aircraft tallies are the best available measure of the strength of nations’ air forces. As with the other force indicators previously discussed, aircraft tallies do not consider qualitative factors that can greatly impact combat effectiveness, such as training, multi-role capability, morale, and stocks of precision-guided munitions. For example flying hours for the Czech Republic, Hungary, and Poland are extremely low compared to the rest of the Alliance.

Chart III-16 depicts the distribution of tactical combat aircraft among nations addressed in this Report (including air force, naval, and marine assets). The United States possesses over 40 percent of all combat aircraft, followed by France, the United Kingdom, Germany, Greece, the Republic of Korea, Turkey, and Italy.

Chart III-17 depicts national shares of the total combat aircraft inventory in relation to GDP shares. In the year 2000, over half of the countries in this Report contributed shares of combat aircraft that were substantially (at least 20 percent) greater than their GDP shares. Greece and Bahrain both made contributions that were relatively more than ten times larger than their GDP shares, while the contributions made by Turkey, Saudi Arabia, Oman and the Czech Republic were at least four times larger. Other nations that made substantial contributions were Poland, Kuwait, the United Arab Emirates, Qatar, Hungary, the Republic of Korea, Belgium, Portugal, and France. In contrast, four nations (Spain, Germany, Canada, and Japan) had combat aircraft shares that were substantially less than their GDP shares. Luxembourg made no contributions because it has no Air Force, although Luxembourgeois pilots serve in the Belgian Air Force.

These assessments are summarized in Charts I-1A and I-1B.

 

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DEFENSE MODERNIZATION SPENDING

From the 1991 Gulf War to the 1999 Kosovo bombing campaign, the events of the past decade have demonstrated that new and enhanced military capabilities are needed to meet the challenges of the post-Cold War world. The most important requirements are for improvements in precision attack, C3I (Command, Control, Communications and Intelligence), strategic mobility and sustainability, theater missile defense, NBC force protection, and SEAD (Suppression of Enemy Air Defenses). These requirements are particularly pressing for our NATO allies, whom – as the Kosovo air campaign revealed – must currently depend upon the United States to provide the lion’s share of total Alliance capability in these areas. The Defense Capabilities Initiative (DCI), which was launched at NATO’s Washington Summit in 1999, is intended primarily to close the gaps that exists between the United States and the rest of NATO in five categories of military capability: deployability and mobility; sustainability and logistics; consultation, command and control (C3); effective engagement; and survivability of forces and infrastructure.

Due to the scarcity of reliable data, and limitations on the length of this Report, it proved impractical to track progress in each of these categories separately. Instead, this analysis presents a more general assessment of countries’ defense modernization performance by analyzing the percentage of national defense spending that is devoted to major equipment procurement and research and development. Furthermore, since complete and fully comparable defense budget data was readily available only for the NATO nations (excepting France), the defense modernization efforts of our Pacific allies and the GCC nations were not assessed.

Assessment of Defense Modernization Spending

Chart III-18 depicts the percentage of 2000 defense spending that each NATO ally (except France) devoted to major equipment procurement and research and development. Three NATO nations spent above-average percentages of their defense budgets on modernization. Turkey, which has by far the lowest per-capita GDP in the Alliance (just $2,296 in 2000), ranked first, followed by the United Kingdom and United States. The Czech Republic, which has the third smallest GDP and the fourth smallest per-capita GDP in the Alliance, fell slightly below the NATO average but ranked fourth with 23 percent.

In addition to the Czech Republic, 13 other nations’ percentages were below the NATO average. These included the poorer members, such as Poland, Hungary, Portugal and Greece, but richer allies like Denmark, Germany, and the Netherlands also ranked below-average. Canada and Belgium, which have the eighth and ninth highest per capita GDPs in NATO, had defense modernization spending percentages that were less than half the 24.1 percent NATO average. Luxembourg, which has the highest per-capita GDP ($40,087) of all NATO members, ranked lowest, spending just over five percent of its 2000 defense budget on modernization.

All but five of our NATO allies increased their modernization spending percentages in 2000, and as a group, the average non-U.S.NATO percentage of defense spending devoted to modernization increased by seven percent compared to 1999. Six allies registered double-digit increases: Portugal (73 percent), Turkey (32 percent), Belgium (29 percent), Canada (22 percent), the Czech Republic (22 percent), and Denmark (12 percent). Yet, despite this positive trend, it is clear that NATO must intensify its defense modernization efforts. Some gains can be achieved through reductions in force structure and operations and maintenance (O&M) costs, but most allies will have to increase their levels of defense spending in order to field effective and interoperable forces. In our discussions with allies and partners, the Department continues to urge sustained efforts in this area.

 

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COST SHARING

The most familiar form of cost sharing is bilateral cost sharing between the United States and an ally or partner nation that either hosts U.S. troops and/or prepositioned equipment, or plans to do so in time of crisis. The Department of Defense distinguishes between two different types of bilateral cost sharing: the direct payment of certain U.S. stationing costs by the host nation (i.e., on-budget host country expenditures), and indirect cost deferrals or waivers of taxes, fees, rents, and other charges (i.e., off-budget, forgone revenues).

Cost Sharing Contributions

As shown in Chart III-19, in 1999 (the most recent year for which data are available) the United States received direct and indirect cost sharing assistance from our NATO, Pacific, and GCC allies estimated at nearly $8.5 billion.

Cost sharing has been a particularly prominent aspect of our bilateral defense relationships with Japan and the Republic of Korea. As Chart III-19 shows, Japan provides a greater level of direct cost sharing ($4.0 billion) than we receive from any other ally. Japan’s emphasis on direct cost sharing reflects constitutional provisions and other factors that limit the scope of activities of Japan’s own armed forces. Refer to Chapter II for additional details on Japanese cost sharing.

The Republic of Korea first agreed to contribute to a program for Combined Defense Improvement Projects (CDIP) construction in 1979 – which marked the beginning of our present cost sharing relationship. In 1988, it agreed to a CDIP program funded at $40 million a year. Since that time, annual cost sharing negotiations have brought a gradual increase in ROK contributions. During 1999, it provided $325 million in direct cost sharing and over $397 million in additional indirect cost sharing. Further information on U.S.-ROK cost sharing is presented in Chapter II.

Bilateral cost sharing by our GCC security partners in Southwest Asia during 1999 included nearly $320 million paid or pledged by Kuwait, Saudi Arabia, Oman, the United Arab Emirates, Qatar, and Bahrain to offset U.S. incremental costs in the Persian Gulf region. Kuwait and Qatar both host a prepositioned U.S. Army heavy brigade equipment set, and share the land use, maintenance, and operating costs for U.S. forces stationed or exercising on their territory.

NATO countries have long provided substantial indirect support for U.S. forces stationed on their territory. Our allies provide bases and facilities rent-free, various tax exemptions, and reduced-cost services. Among NATO allies with the largest cost sharing contributions to the United States in 1999 were Germany ($1.4 billion) and Italy ($530 million). In addition to bilateral cost sharing, our NATO allies also provide multilateral cost sharing, through common- and jointly-funded budgets. These include the NATO Security Investment Program (NSIP); the NATO Military Budget for the operations and maintenance (O&M) of NATO Military Headquarters, agencies, and common-use facilities; and the NATO Civil Budget for O&M of the NATO Headquarters and several non-military programs including civil preparedness. See Chart III-21 at the conclusion of this section for additional detail.

Several recent developments in collective NATO cost sharing favored the United States, including savings of nearly $190 million realized due to NSIP funding for projects in support of U.S. forces that would not normally be NSIP-eligible (e.g., quality of life facilities at Aviano Air Base, Italy). In addition, the United States stands to gain direct savings from NATO’s Collective Cost Sharing initiative, under which the Alliance will offset U.S. O&M costs for prepositioned war reserve equipment and material. Finally, an additional U.S. savings of approximately $12 million were realized in 1999 due to a reduced U.S. share of the common budgets owing to increased participation by Spain, and the inclusion of the Czech Republic, Hungary, and Poland.

Assessment of Cost Sharing Contributions

Cost sharing objectives are not appropriate for all countries, due to the differences in the nature of our security relationships with various allies and partners. For instance, our European allies have no tradition of providing the kind of direct cash and in-kind support provided by Japan and the Republic of Korea, since NATO has for many years concentrated on strengthening participation in the military roles and missions of the Alliance. In contrast, due to the much different security situation in the Pacific, and the unique defense capabilities of Japan and the Republic of Korea, our responsibility sharing policy in this region has emphasized cost sharing rather than global military roles and missions.

Chart III-20 shows the nations with the greatest U.S. cost offset percentages for 1999. Japan leads all nations in covering 79 percent of costs associated with the stationing of U.S. forces, with Saudi Arabia close behind at 68 percent. Kuwait, Qatar, Italy, the Republic of Korea, and Germany all offset over 20 percent of U.S. stationing costs. Nine other NATO allies collectively offset 22 percent of U.S. stationing costs. Cost offset percentages cannot be given for Hungary, Oman, and the United Arab Emirates due to the lack of complete information regarding U.S. stationing costs in those countries.

Multilateral Cost Sharing: NATO's Common-Funded Budgets

NATO's long-standing arrangement for sharing the costs of mutually-beneficial projects is one of the Alliance's best tools for promoting responsibility sharing equity. A summary of 2000 outlays by each of the NATO common-funded budgets is provided below, showing each country's contribution and percentage share of costs incurred. See Chart III-21.

 

 

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FOREIGN ASSISTANCE

Foreign assistance plays a prominent role in nations’ overall responsibility sharing efforts. For, although economic aid does not directly increase U.S. and allied defense capabilities, it makes an important contribution to global peace and stability. For many years, most industrialized NATO countries and Japan have extended various types of assistance to developing countries. In addition, and of special significance in the post-Cold War era, NATO nations, Japan, and the Republic of Korea also provide assistance to the emerging democracies of Central and Eastern Europe, and the Newly Independent States (NIS) of the former Soviet Union.

The Organization for Economic Cooperation and Development’s (OECD) Development Assistance Committee (DAC) encourages commitments of international aid, coordinated aid policies, and consistent aid reporting. The DAC’s definition of Official Development Assistance (ODA) is recognized as the international standard for reporting aid provided to developing countries and multilateral institutions. Aid to 12 of the 22 emerging economies of Central Europe (including the Czech Republic, Hungary, and Poland) and the NIS does not qualify as Official Development Assistance for OECD purposes, but instead is categorized as Official Aid (OA). Both categories, ODA and OA, cover identical types of assistance, with the only difference being the recipient nations. Total foreign assistance evaluated in this Report is the sum of all ODA and OA.

Foreign assistance is comprised of both bilateral aid, assistance given by one nation directly to another, and multilateral aid, assistance given by a nation to an international development bank (e.g., the World Bank) or other multinational agency (e.g., the European Commission) that is pooled with other contributions and then disbursed. Multilateral assistance traditionally focuses on projects and programs with longer term objectives beyond providing immediate liquidity (e.g., human resources development, technical assistance, financial infrastructure improvement, and poverty reduction).

Foreign Assistance Contributions

As shown in Chart III-22, disbursements of foreign assistance by the nations included in this Report exceeded $56 billion in 1999 (the latest year for which reliable data are available). Of this sum, our allies and partners provided over $43 billion while the United States provided nearly $13 billion. This aid reflects a commitment to promote democratization, government accountability and transparency, economic stabilization and development, defense economic conversion, respect for the rule of law and internationally recognized human rights, and to provide humanitarian relief. Total foreign aid in 1999 represented one quarter (0.25) percent of the combined GDPs of all the nations in this Report – a minor increase over the 0.24 percent of total GDP reported for 1998.

Chart III-22 also shows that, as in the recent past, the four nations with the largest foreign assistance contributions (in absolute terms) in 1999 were Japan, the United States, Germany, and France. At the other end of the spectrum are those nations that contribute very modest amounts of foreign aid, although this may be justified in the case of countries with relatively low standards of living (e.g., the Republic of Korea, Portugal, Greece, Poland, and the Czech Republic).

National and aggregated foreign assistance data is presented in the Additional Statistics section, Table E-14.

Assessment of Foreign Assistance Contributions

Chart III-23 depicts each nation’s average foreign assistance contributions as a percentage of its average GDP for the period 1997-1999. In an effort to better reflect real trends in foreign assistance, the Department assessed these contributions based on a three year average. The use of a multi-year average lessens the effects of excessive year-to-year volatility in the size and timing of aid contributions, and thus produces more meaningful results. For example, the United Kingdom’s foreign assistance as a percentage of GDP fell from 0.31 percent in 1998 to 0.26 percent in 1999. This was the result of multilateral contributions being delayed sufficiently that they were included in the 2000 aid totals instead of the 1999 totals.

Over the period 1997-1999, the average percentage of GDP spent on foreign assistance by all nations in this Report was 0.23 percent. Judged on this basis, 12 of the countries addressed in this Report contributed above average percentages of their GDP as foreign assistance. The highest donors were Denmark, Kuwait, Norway, and the Netherlands (the only nations that met or surpassed the UN assistance target of 0.7 percent of GDP). Luxembourg and France also had high foreign assistance percentages. Luxembourg plans to achieve the UN target of 0.7 percent of GDP in 2000, and reached a level of 0.65% percent in 1999. The United States ranks fifth from last among all the nations in this Report that are net donors of foreign assistance, ahead of the Republic of Korea, Turkey, the Czech Republic, and Poland.

Qatar, Oman, and Hungary are net recipients of foreign assistance.

These assessments are summarized in Charts I-1A and I-1B.

 

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CONCLUSION

As stated in previous years’ reports, the Department believes that our allies’ and key security partners’ efforts present a mixed, but generally positive picture in terms of shouldering responsibility for protecting shared security interests. As noted throughout the Report, there is no one set formula or strategy for increasing allied contributions to collective security that is appropriate for all allied nations. The United States will continue to encourage our allies and partners to assume a greater share of the burden of providing for the common defense using approaches tailored to the circumstances of particular nations or groups of nations. The launching of NATO’s Defense Capabilities Initiative (DCI) is an important step in that direction. The DCI requires improvements in five major categories of military capability: 1) Deployability and Mobility; 2) Sustainability and Logistics; 3) Consultation, Command and Control; 4) Effective Engagement; and 5) Survivability of Forces and Infrastructure. The United States also welcomes and encourages the European Union’s ongoing development of a European Security and Defense Identity (ESDI), which has a "Headline Goal" of being able, by 2003, to deploy a force of 50-60,000 troops within 60 days, and be able to sustain it for up to one year.

The responsibility sharing efforts of our non-NATO allies and security partners also present a generally positive picture. The members of the GCC continue to provide noteworthy host nation support, and maintain unusually high levels of defense spending – particularly considering their relatively low average per-capita GDP. As a front line ally that lives under constant threat of invasion and infiltration, the Republic of Korea contributes to shared security objectives primarily by maintaining large, capable armed forces with which to confront North Korea’s massive war machine. The ROK Army, for example, accounts for a full tenth of the total ground combat capability contributed by all the nations covered in this Report. The Republic of Korea has also supplied the bulk of the funding for the Korean Energy Development Organization (KEDO), and thereby made a vital contribution to holding North Korea’s nuclear program in check. Japan provides the highest level of cost sharing for forward-based U.S. forces of any allied nation, and contributed more funding than any other country (including the United States) to foreign assistance and UN peace operations in 1999 (the latest year for which complete data is available).

The 21st Century will certainly present many challenges that will impact U.S. and allied defense budgets, including regional conflicts, economic strife, and humanitarian missions. The Department believes that the nations covered in this Report have developed a heightened awareness of these challenges, and thus recognize the importance of continuing to increase their efforts to share the roles, risks, and responsibilities of defending shared security interests. The Department is committed to continuing its efforts to convince allied and partner nations to maintain and increase their responsibility sharing contributions.

 

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