1. NATO PSOs (ISAF) and Defence Economics Issues
Dr. Szenes Zoltán CSc ZM NDU Department of Security and Defence Policy
Conference on Peace Support Operations and Defence Economics. 29 May 2008

2. NATO: Level of Commitment
Afghanistan
Iraq
OAE
Humanitarian
Relief
Kosovo
PPs
Bosnia
OAE
Africa
Kosovo
Baltic &
Slovenian
Air policing
Balkan NHQ
Defence
Reform
NRF
Concept
NRF FOC
Bosnia
1996
2002
2007

3. Force Providers to the ongoing PSOs

4. NATO’s three resource pillars
INTEGRATED MILITARY STRUCTURE
NATO RESOURCE PILLARS
BUDGETS
AGENCY
CIVIL
BUDGET
MILITARY
NSIP
FIXED INFRASTRUCTURE
DEPLOYABLE
STRATEGIC
EQUIPMENT
MANPOWER
CIVILIAN
The three funding mechanisms (common funding, multi-national funding and national funding) are shown on the base of this structure. They are used to support NATO’s three resource areas: budgets, the NATO Security and Investment Programme (NSIP) and manpower. All three resource areas support the integrated military command structure.
My briefings will be restricted to the column on the left, Budgets. My colleagues, LTC Duane Padrick and Mr. Wilco Koelewijn will be addressing the centre column, the NATO Security Investment Program or NSIP, and Mr Patch will deal with Manpower, both military and civilian.
In its simplest terms, budgets pertain to ongoing or “operation and maintenance” costs, the NSIP pertains to investment or capital costs, and manpower is self-explanatory.
Within the category of Budgets, there are three types of budgets .
a. Starting from the bottom of the left column, the International Military Budget, often shortened to just “Military Budget”, supports military programmes of the command structure within NATO.
b. The Civil Budget is used to support NATO Headquarters in Brussels. This budget is broadly split between civilian manpower, the Science Programme and the Information Programme.
c. Agency Budgets include budgets, for example, NATO Procurement and Logistics Organisations such as NETMA, NAPMA, and NACMA. Agency budgets are frequently set up by a group of NATO nations to procure or support a specific programme.
NATO Airborne Early Warning and Control (AEW&C) Programme Management Agency
NATO Eurofighter & Tornado Management Agency
NATO Air Command and Control System Management Agency
These three Resource Pillars function closely with each other. For example, a HQ would be built using NSIP funds. The daily operating costs are resourced through the Military Budget. And civilian and military manpower requirements although identified together under manpower establishments are funded separately - civilian salaries are funded by NATO budgets and military staff are nationally funded.
During this course you will learn that these three pillars come together in “Capability Packages” where all related resources are approached in an integrated way.

5. National and NATO resources
Nations spend:
2.7% of GDP on defence
Of this nations spend:
0.44% on NATO (MB 0.17%)
What does this buy?
The “glue” of the alliance.
Integrated command structure
Combined exercises
NATO Response Force (NRF)
NAEW
Missions and Operations
The common funded resources in the big picture shows that nations spend 2.7 % of the gross domestic product on defence.
Of this 0.4% is spent for the common funded resources. To narrow my approach down to my micro cosmos, less than 0.2% is the focus of my briefings and my pillar of the “tempel” I showed you. I will in the rest of my briefings focus on Military budgets.
To me this also helps to illustrate what common funding buys the nations. To me it provides the glue that connects the forces and efforts of the nations through Command and Control.

6. NATO Resources 2007
To give you a rough order of magnitude. The Guesswork on the cost of the military manpower provided to the Nato Command structure is based on the Medium Term Financial Plans and are just a guess meant as an illustration.
What this boils down to is:
1 rough estimate (base on cca 13K military posts in the PE)

7. PSO Military Budget tendency

8. ISAF NSIP and Military Budget
(2007)
NSIP
647.5 M€
MILITARY BUDGET
266.4 M€
NTM-I 3%
BALKANS
18 %
NHQ Sa 2%
NTM-I 6%
JFC 3%
KFOR 10%
NSIP > NATO Security Investment Programme
ISAF 79%
514 M€
ISAF 78%
206.3 M€

9. Funding Mechanisms Common funded---NAMSA
Funded by NATO nations through established cost-shares (Funding eligibility- Funding principle)
Multi-nationally funded (Joint) --- MN Logistics
Funded by agreement (CAOCs, NRDC HQs)
Trust funding
Nationally funded--- Contracting and Outsoursing
Funded by individual nations
There are 3 funding mechanisms that must be understood:
Common-funded means paid for by NATO funding that is provided through established cost shares. I will explain what I mean by cost shares in a few slides.
Multi-nationally funded is outside the authority of NATO and occurs when two or more NATO nations agree among themselves to share costs of a programme. An example is the agency, NETMA – NATO Eurofighter 2000 and Tornado Development, Production and Logistics Management Agency that receives its budget from just 4 nations - Germany, Italy, Spain and the United Kingdom.
Nationally funded means just that – funding responsibility lies with individual nations. For example, salaries for NATO military personnel is nationally funded. NATO funds are not used for military salaries.

10. ISAF Mission Mission: Desired Military End-state:
Assist the Afghan government to maintain security;
Facilitate the development of Afghan government structures;
Extend Afghan government control; and
Assist reconstruction and humanitarian efforts.
Desired Military End-state:
That Afghan National Security Forces are able to provide security and sustain stability in Afghanistan without NATO support.

11. Afghanistan Development
Rebuilding
Afghanistan
Afghan Compact 2007
Counter
Narcotics
United
Kingdom
Lead
Judicial
Reform
Italy
Disarmament
Of Illegally
Armed Groups
(DIAG)
Japan
Train the
Afghan
National
Army
States
Train
Police
Forces EU
SECURITY SECTOR REFORM
UNAMA-NGOs
ISAF OEF
INTERNATIONAL COMMUNITY

12. Bucharest Summit Top priority Clear Vision guided by four principles
a firm and shared long-term commitment
Support for enhanced Afghan leadership and responsibility
a comprehensive approach by the IC, bringing together civilian and military efforts
Increased cooperation and engagement with Pakistan’s neighbours
Political-Military Plan

13. US CENTCOM CINC Strategic Guidance
Set conditions for security and strenghten governance in Afghanistan
Working with ISAF , conduct operations, that provide security, stability, and maturing governance to the people of Afghanistan. Through Combined Security Transition Command (CSTC-A) continue to develope and grow the Afghanistan Security Forces
(Lt Gen M.E. Dempsey)

14. ISAF Issues Military Infrastructure development ASF Training
Filling CJSOR
Counter Narcotics
PRTs
Security problems (IED)

15. Current ISAF Infra Projects
Kandahar Airfield
Demining
Airfield Operating Surfaces
Airfield Operational Facilities
Roads
Bulk Fuel Installation
Combined Air Terminal Ops (CATO)
Environmental Baseline Study
Air Traffic Control Tower
Waste Water Treatment Plant
APOD NATO Support Element
Hazardous Material Cargo Pad
Theater Map Depot
Taxiway D2 reconstruction
Role 3 Medical Treatment Facility
Real Estate Expansion
Domestic accommodations
Operational accommodation
Water and Sewer system
Mazar-e-Sharif
Aircraft Operating Surfaces, Patrol Road, Main and Sliding Gates, Morale & Welfare Compound, Runway, Maintenance facility
Bagram
Rotary and fixed wing Aircraft Operating Surfaces
KAIA North & Relocation
Mine and UXO Clearance, Aircraft Operating Surfaces, APOD Operational & Domestic Facilities, Environmental Baseline Study, MEDEVAC Rotary Wing Parking Apron, Perimeter road, Force protection

16. Operational Logistics Support Projects

17. NAMSA “junction” ties NATO and Nations
KAF RLS & APOD Projects
KAF
NAMSA “junction” ties NATO and Nations
to the highway to KAF

18. Security Issues Talibans’ Long term goal: take over the power
Priority: South, East and West
Concept: 1. Code of Conduct (attack the people of the goverment)
2. Operation Lesson (ISAF, foreigners)
3. Complex Operations (collateral demage)

19. Insurgents Use Of IEDs 50 % IED incidents, ISAF casualties- 53 %
IEDs are simply the insurgents’ method of achieving their short term military and longer term political aims.
Had they access to “conventional” weapons they would use them.
When ISAF efforts negate the effects of one type of IED they will seek alternatives.
IEDs can be used for “spectaculars” as well as tactical attacks.

20. Results and Challenges
Contribution to Security and Stability (PRTs)
Security becomes more and more important
New Force Contributions
Real Fight with Insurgents
Long term mission- huge invesment

21. Thank you for your attention!
Questions?