An Overview of the 1995 Report on Allied Contributions to the Common Defense

INTRODUCTION

The security relationship the United States enjoys with its major allies continues to change at a rapid pace. Momentous initiatives undertaken at the 1994 NATO Summit--particularly Partnership for Peace (PfP) and counterproliferation efforts--and the increasing scope of our bilateral relations with Japan and the Republic of Korea, are transforming the way we manage post-Cold War security challenges in Europe and North East Asia.

In the wake of this important transformation, the United States has adopted a more comprehensive approach to burdensharing issues. This approach, suggested in earlier editions of this Report and set forth explicitly last year, moves beyond the traditional focus on the burdens of common defense to address more broadly the responsibilities of cooperative security.

This is the basis upon which this Overview to the 1995 Report on Allied Contributions to the Common Defense has been prepared. As with last year's submission, this Overview presents a timely executive-level summary to assist Congress in its deliberations. The complete Report, containing methodology and detailed support of our findings, will be provided separately.

RESPONSIBILITY SHARING

The Administration remains committed to increased sharing of the roles, risks, responsibilities, and benefits of meeting common security goals and objectives. This means continuing to seek greater cooperation with our allies and partners, including all facets of expanded security responsibilities appropriate for this new era.

Military and defense efforts remain paramount among factors contributing to peace, security, and stability in the post-Cold War environment. Resources and armed forces dedicated to the common defense continue to be the foundation of our cooperative security arrangements with allies.

Beyond these contributions, however, are many diverse activities important to U.S. and allied security interests. Allies' "responsibility sharing" efforts encompass not only their customary defense contributions, but also the expanded array of roles and risks they are undertaking in the face of new security challenges. Such efforts include crisis management, peace operations, denuclearization and limiting the proliferation of weapons of mass destruction (WMD), promoting democratization and stabilization, and providing economic and humanitarian assistance.

Another important part of responsibility sharing is host nation support provided to U.S. forces based on allied soil, or deployed to foreign shores in a contingency. Although extremely valuable, this support--including sharing of U.S. stationing costs--is only one of many factors used to determine the extent of nations' responsibility sharing efforts.

EVALUATION OF FAIR SHARES

There is no single, universally accepted formula for calculating each nation's "fair share" of the responsibility for cooperative security. In theory, any contribution that enhances peace and stability is part of a nation's responsibility sharing effort. National contributions assume many forms, requiring different measures and analyses. Some forms of responsibility sharing, such as defense spending and force levels, can be calculated with precision. Evaluating other types of contributions, such as host nation support, involves a mix of quantitative analysis and subjective judgment.

Given wide disparities in levels of national economies, populations, and economic well-being, any objective assessment of U.S.-allied responsibility sharing must account for nations' efforts relative to their ability to contribute. It is on this basis that most key indicators in this Report are presented. Information on measures of nations' ability to contribute--including GDP per capita, a key indicator of economic well being--is included at Annex 1 [Selected Indicators].

COUNTRY ASSESSMENTS

The broad array of countries' responsibility sharing efforts and contributions addressed in this Report are subdivided into five major categories. These are: (1) aggregate resources for defense; (2) military forces for defense; (3) crisis management and peace operations; (4) economic and financial assistance; and (5) host nation support. Chart 1 provides a summary assessment of nations' efforts in each of these categories; additional detail is provided in the following sections and annexes to this Report.

Overall Assessment

To put U.S. and allied responsibility sharing in perspective, it is important to note the substantial U.S. defense drawdowns that have taken place in recent years. Annual U.S. defense outlays, for example, have declined in real terms from the mid-1980s to 1994 by $77 billion (over 20 percent). In concert with these budget cutbacks, since the end of the Cold War various elements of U.S. active duty force structure have been drawn down 20 to 40 percent, with end strengths dropping over 20 percent. A sizable proportion of these reductions has occurred from units stationed overseas, predominantly from those in Europe. Since 1990, the number of U.S. troops based on foreign shores has declined 190,000 (45 percent); in Europe alone, the U.S. drawdown exceeds 175,000 (60 percent). As a consequence of these reductions, the Department estimates that annual costs of our forces based overseas have decreased by nearly $10 billion (33 percent) since 1990.

Because these sizable U.S. reductions have outpaced allied reductions in the aggregate, our relative share of the common defense burden has diminished. At the same time, our allies are showing strong support for important shared security goals--including PfP, assistance to the New Independent States (NIS) of the former Soviet Union, and denuclearization.

As discussed below, however, and depicted in Chart 1, wide differences remain among the force improvement efforts and security contributions of individual nations.

Aggregate Resources for Defense

The financial and personnel resources nations commit to defense remain their most important contributions to collective security. This section addresses financial commitments to defense, while personnel contributions are summarized in Annex 1 [Selected Indicators].

Military Forces for Defense

The standing military forces that nations raise and maintain represent their most basic defense capabilities, and thus comprise an integral component of responsibility sharing.

Crisis Management and Peace Operations

The post-Cold War era poses many new security risks and challenges to the United States and our allies, including a wide range of political, economic, and ethnic instabilities that may affect areas of strategic interest. The prevention and management of these risks will be increasingly important to protecting fundamental Western values and enhancing our security.

Economic and Financial Assistance

Each of the nations addressed in this Report provides economic assistance to developing countries, or has pledged aid to Central European nations and the NIS. These contributions and pledges are an important boost to post-Cold War stability, and represent notable economic commitments by donor nations.

Host Nation Support

Our European and Pacific allies provide a broad range of host nation support to U.S. forces. As shown in Chart 5, the Department estimates that in 1993 we received assistance valued at between $7.5 and $8.5 billion in direct allied cost sharing support and foregone allied revenues. This equates to roughly 45 to 50 percent of the costs the Department incurs in these countries (excluding U.S. military personnel costs). Our wartime host nation support (WHNS) agreements with many of these countries provide us with additional extensive cost avoidances. (Figures discussed here and depicted in Chart 5 are estimates for 1993. Data for 1994 are currently being developed and will be forthcoming.)


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Chart 5
Estimated 1993 Defense Cost Sharing Contributions - $ Billions

MAJOR ISSUES AND RECENT PROGRESS IN RESPONSIBILITY SHARING

This section addresses key topics of special concern to Congress and highlights recent developments in our ongoing efforts to ensure equitable responsibility sharing.

NATO Security Investment Program

Virtually since its inception, NATO has provided infrastructure for Alliance needs on a commonly funded basis. NATO's Infrastructure Program--recently renamed the NATO Security Investment Program to reflect more accurately its reorientation to the new strategy and force structure--is thus among the oldest and surest tools for equitably sharing defense costs among the allies.

Recent Cost Sharing Initiatives

Congress continues to be concerned with the level of U.S. outlays associated with our forces based overseas--a concern shared by the Administration. Since 1990, the real annual costs of our overseas forces have dropped by nearly $10 billion (33 percent), and the share of U.S. non-salary costs defrayed by our allies in the aggregate has increased. This Administration remains strongly committed to seeking additional cost sharing progress, and is continuing to pursue agreements with our major allies that will result in reduced U.S. stationing costs.

The Japanese Cost Sharing Model

The political and military relationship the United States enjoys with our major allies is uniquely tailored to the strategic and economic circumstances of each ally. For this reason, it would be inappropriate to apply a single standard or approach to countries as varied as those addressed in this Report. Nevertheless, some observers have proposed that the United States negotiate with our European allies a substantial host nation support package covering up to 75 percent of our annual stationing costs--based on the agreement we have with Japan.

Residual Value Compensation and Environmental Restoration

Since 1990, while the number of U.S. military personnel stationed in Europe has dropped from over 300,000 to roughly 130,000, the number of DoD sites in Europe has likewise been reduced--from around 1,400 to approximately 500, a decline of more than 60 percent. Over half of these sites, the majority in Germany, have now been returned to the host government.

CONCLUDING OBSERVATIONS

Responsibility sharing is an attempt to address the entire spectrum of post-Cold War security challenges which now faces us. Through this approach, we seek to recognize and encourage not only nations' contributions to the common defense--which remain the cornerstone of our security--but also the broad range of other efforts undertaken to promote peace and stability. This perspective emphasizes the strategic view of our shared security interests, and permits a more comprehensive assessment of national contributions.

Among our NATO allies, responsibility sharing focuses on their continued commitment of resources and forces for defense, their significant contributions in the areas of peacekeeping and financial assistance to fledgling democracies in Central Europe and the NIS, and on their support for critical new missions such as PfP and counterproliferation.

As for our Pacific allies, Japan is assuming increased responsibility for self-defense, and continues to show steadfast support for the U.S. role in the region, including providing extensive host nation support to stationed U.S. forces. Meanwhile, the Republic of Korea continues to rank among the top nations assessed in this Overview in the key categories of defense resources and forces. In addition, the Republic of Korea has made important strides toward military autonomy and in augmenting their host nation support contributions to help defray U.S. stationing costs.

We are encouraged by Congressional support for this more comprehensive approach to assessing nations' efforts. As we expand the security dialogue with our allies and explore new arrangements to meet shared objectives, we look forward to building on the theme of responsibility sharing through continued discussions with the Congress.

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