International Network of Engineers and Scientists Against Proliferation

The Costs of NATO Expansion

Alistair Millar

Slightly corrected contribution presented at the Alba Kör "No-to-NATO Conference", Budapest, Hungary, November 1997.

One of the the central issues surrounding NATO expansion is the costs. Analysts generally use the word "cost" in a financial or economic context. Of course, the amount of money this project will require from current and aspiring NATO members is very important and I will deal with this issue first. Eastern European nations, such as Hungary are now faced by a costly and unecessary remilitarization when they need to focus their resources on economic and social reconstrustion. Notwithstanding, it cannot be understated that there are other "non-financial costs" of enlargement that are going to have a profound effect on a wide range of important priceless issues. These include Europe's post Cold War relationship with Russia and with mulilateral organizations; the future of arms control; and the prospects for sustainable peace in region that faces no significant threat to its security for the first time in centuries.

Cost Estimates

There have been five principle cost studies to date, three of which have been produced entirely in the United States. The other two have come from NATO's Senior Resource Board (which the United States rejected for its faulty assumptions and costs that were to low). The other has been offered by the Polish Government, which lists 19 target areas to achieve a minimum of logistical changes at a cost of $84 million in fifteen years. This appaers quite low because it is incomplete, and excludes military modernization. This point is addressed in a US State Department Telegraphic Reprint from the Polish Embassy which notes that the tougher question is where to get the cash to upgrade essential military hardware. Only 20% of the Polish army's equipment is considered modern and compatible with NATO standards.

All of the costs estimates to date are "notional" and depend on how big a threat planners assume the allance will face, what forces will be needed to keep NATO credible against a potentially resurgent Russia (this is very unlikely in the near term if at all) and exactly what NATO's other missions will be.

The first of the American cost estimate studies was produced by the Congressional Budget Office (CBO) produced in March of 1996 and estimated that the price for expansion vary considerably based on different assumptions they offered a range anywhere from $61-125 billion. The following month the RAND corperation produced figures between $10 Billion and $110 billion with $42 Billion being the most likely. The most frequently cited study was released by the Clinton Administration, through the State Department in February of this year. This study estimates that costs will be lower, between $27-35 billion, giving figures based on what the Administration believes will be affordable to the United States. It devides the costs up between the Alliance as follows: 50% current European members plus Canada; 35% new members; and 15% for the United States. The Administration is littered with pitfalls and serves will ? purpose as the basis for a such accomplicated and sweeping foreign policy. It fails to do a bottom up costing of the detailed military improvements needed for expansion, numbers are just picked to suite what they want to pay without sufficient analysis, not based on fact and often cannot be verified. The study assumes that each nation would purchase the I-Hawk defense system, originally deployed in the late 1960's and now being phased out. Furthermore the study assumes that each nation will purchase 18 F-16 fighter planes, in reality new members are being pressured to buy 300 new aircraft.

NATO has promised to release a new cost study in December 1997 at the Alliances foreign ministers meeting in Brussels. Anlaysts already anticipate that the figures given in this study will also be low (about $5 billion over ten years) as the price for achieving "initial operability". One problem with this study as with the others is that it does not produce a micro analysis with sufficient detail to be a reliable estimate. Accordingly the CBO and the General Accounting Office will produce a more authoritative study in June 1998. Even if this study does provide the Senate and other NATO member legislatures with a more realistic bill for what they are expected to pay, it will come after the vote on enlargement ratification in February. As a result the United States Senate will be passing an unfunded mandate for what the Administration in Washington DC has claimed will be an "open door" enlargement policy. The officially stated policy of NATO is to bring in Slovenia, Romania and the three Baltic Countries (which are indefensable without nuclear weapons). Furthermore recent pronouncements in the United States indicate that NATO intends to militarize the Partnership for Peace countries to levels closer to NATO proper in the future. This would bring the unfunded mandate all the way to the Chinese border. Here, in the Czech Republic and in Poland you are currently deciding on becoming NATO members yourselves without knowing what the actual costs will be. Even based on the current estimates, Hungary and the Czech Republic who are currently spending respectivelty 1.4% and 1.7% have promised NATO to increase this by 0.1% per year until the end of the century. Between 1996 and 1998 the Czechs have estimated that they will have allocated 26% more in real terms, to defense—while Western defense budgets are coming down.

The basis for all the costs studies is based on NATO's 1991 Strategic Concept. This document still makes frequent references to the Soviet Union and its republics and the USSR. It is out of date and cannot possibly provide sufficient rational for NATO in the Post Cold War era, let alone what the costs of expansion will be.

What do you expect to get in return for your investment? As you all well know Article Five of the NATO Washington Treaty pledges that an attack on one member will be considered an attack on all of them. This sounds like a strong, comfortable security blanket being offered to you who still have vivid memories of Soviet domination, particulary in 1956. I urge you to pay special attention to a recent interpretation of Article Five from the White House. In September US Senator Kay Baily Hutchison (R. Texas) submitted a letter and some questions to Clinton on NATO expansion. The fourth question reads as follows:

"Under Article V of the treaty, NATO's security guarantees will extend to all new member nations of Central Europe. Is a border dispute involving one or several of the new NATO members so vital a national security threat to the United States that we are willing to risk American lives?"

The Clinton Administration answered the question this way:

"Article V states that members will consider an attack on one an attack against all. It does not define what actions constitute an "attack" or prejudice what Alliance decisions might then be made in such circumstances. Member states, acting in accordance with established constitutional processes, are required to exercise individual and collective judgement over this question."

That doesn't sound like the iron clad security guarantee that you think you are paying for. Instead it is flimsy and open to interpreation. After spending vast amounts of money on defense instead of social and economic concerns in this part of Europe, will it be worth it?

Loans

Over the last two years, economic aid to this region has gone down while military spending has dramatically increased. During 1996 the Clinton Administration diverted $15.6 billion from economic assistance funds into military funding. For 1997 this conversion will use a further $7 [b]illion? and has already been authorized in the United States.

At a time when Central and Eastern Eurpean nations are in the middle of a costly transformation to a market economy, spending money on militarization instead, will increase instability and threaten security in the region rather than strengthen it. The International Monetary Fund has already warned the Western Governments, especially the United States not to push Central and Eastern Europe to spend on defense and jeopardize their domestic reform programs. If you had a referendum in this country based on the IMF's recommendations on military spending, Hungary's approval of NATO expansion may not be so imminent. Would you rather have tanks and fighter planes or hospitals and schools?

Alistair I. Millar, British American Security Information Council (BASIC), 1900 L St NW Suite 401-2, Washington DC 20036; tel +1-202 785 1266, -387 6298, e-mails: basicus@basicint.org; aimbasic@aol.com.