Dear Colleagues,
Year 2014 and its budget showed that the Government took cautious and secure steps towards economic recovery, stopping the decreasing trend and launching the revitalization of the economy. I want to begin my speech on 2015 budget focusing shortly in what we have done during the current year and what we will do in the future.
The Ministry of Defence is trying to put in maximum efficiency the available funds, continuing rigorously the control of all available financial resources. The Ministry of Defence budget for 2014, approved a year ago, was not only distorted in structure, but also inherited numerous unpaid bills by the previous government.
Through the difficult combination of: limited budget and overdue invoices, it has not been easy to find facilitating ways in order to use efficiently the available funds and to fulfill the constitutional mission of the Armed Forces.
Trying continuously to fulfill the budget of this year and making possible, due to reallocations, the fairly and effectively use of financial resources, we entered into an important process of the internal audit. This structure, currently not apathetic and inefficient, by the end of the year 2014 is expected to carry out about 38 audit missions or 12 times more than in 2013. This process has revealed violation of financial discipline with effective damage done during 2010-2013 period for the amount of 163 million Leke (ALL). We will continually insist and will assure all the Albanian taxpayers that all their contributions intended for the Armed Forces will be used until the last penny with the required effectiveness and efficiency.
It is now certain that the money of the national budget, but also the secondary incomes provided by the sale of weapons or their demilitarization, will not be used according to the likes and preferences of political humor, as it has happened in the past of this Ministry, when millions of Euros from the money and contribution of taxpayers were made available the camping, ignoring the multiple requests of the Albanian Armed Forces for modernization and infrastructure, and its own commitments in relation to the Alliance.
Based on the assessment of the budget of the Ministry of Defence for 10 month-period, the 2014 budget is expected to use 97% of its total budget, the highest level of the implementation of the budget in the recent years.
The expected result is the direct consequence of improving significantly the management of public funds, as well as analytical control over the implementation of public expenses. On the other hand, the implementation of expected investments, at the end of the year, is expected to be in highly satisfactory levels, around 98%.
The reallocation of budget funds, during the fourth quarter of this year, it will make possible the fulfillment of a longstanding commitment towards the Alliance, precisely, the equipment of the 2nd Infantry Battalion with new NATO-standard weapons.
This year, our Air Fleet was equipped with two “Cougar” helicopters, part of the contract that has been implemented since 2010, while the amendment of the initial contract for the equipment of the Air Force with two SAR (search-and-rescue) helicopters was seen as necessary, replacing the VIP helicopter lost in an accident two years ago, finely closes the contract in 2015 with the obligation to pay about 13 million Euros. Based on the measures taken by the Government for the payment of overdue liabilities, through the loan provided by the international financial institutions, we managed to pay during this year 669 million ALL of overdue liabilities, or 35% of total liabilities of the Ministry of Defence.
The 2015 draft budget presented for approval by the Government to the Assembly is in the course of its long and short-term priorities for the fulfillment of the Government’s program and it is based on an economic growth of 3%. So, obvious priority was given by this budget to health, education, public order and infrastructure, this is also due to backwardness inherited in these sectors. Expressing my approval for these priorities, I have to present to you, dear colleagues, some data related to the MoD budget, and how they will be managed.
For 2015, the estimated budget for the Ministry of Defence is expected to be 12 billion 654 million ALL, or 0.83% of GDP. Obviously, this budget is not in accordance with our budgetary requirements, discussed by the strategic management group composed by military and public finance experts and based on the needs for the modernization of the Armed Forces according to NATO standards.
However, the budget projections for 2015 will guarantee the fulfillment of any constitutional mission of Armed Forces; it will ensure the functionality and operational capability of their structures. During 2015, the Ministry of Defence priorities will be:
• Further modernization of the Armed Forces and especially of the 2nd Infantry Battalion;
• Participation in NATO missions, and missions under EU;
• Our contributions to national initiatives, civil emergencies, civil-military cooperation;
• Increase the quality and improvement of conditions of training, education, exercise, improving the treatment and military housing, etc.
For their achievement will use all financial resources, as well as secondary incomes. Our attention is now focused on how to use the money the Government proposes to make available for the Army.
Let’s begin with a brief description of the three main budget items.
The projected amounts for wages and social insurance are subject to a special study and assessment undertaken by the experts of the Ministry, in order to move forward with grants or rewards that will be given to combat forces for the fulfillment of their mission, reducing the maximum expenses for unproductive or inefficient functions.
On the other hand, significant changes that took place recently in the numbers of employees and their structure (officers, NCOs, professional soldiers and civilians) were made in order to increase the efficiency and operability within the Armed Forces. Likewise, we aim to reward some functions and professions with similar function to other ministries, and that unfortunately we inherited with significant differences as: the pilots, military police, intelligence service and other similar functions.
The specific weight of operative and maintenance expenses in the total budget will be improved. It is worth mentioning that the improvement of the structure within operative expenses will enable significant growth of spending for our participation in NATO peacekeeping missions. Over 800 million ALL (3 times more) will go to participation in operations, against 300 million spent in 2014. It includes:
a- Participation in joint operations;
b- Continuation of contributions in the framework of NATO, especially in hotspots.
The improvement of financial management and control, as I mentioned above, remains the focus of our structures’ work and will constantly accompany this budget. Continuous monitoring of budget implementation; reallocation when necessary; setting procedures and their constant review in function of good management; reviewing and reorganization of spending units; full computerization of financial services, etc; automation associated with continuous audit and assessment of this process, aim to establish a more inclusive control over expenses and their efficient use, and obviously reduce the administrative expenses, etc. This is a process that has already begun and is progressing according to forecasts, and positive results are expected in 2015.
What I can say is that, the inherited structure will be improved this year, at least in the “investments” item. The provided investments in the draft budget, as well as those that will be able to achieve through internal secondary resources, will aim the further modernization of the Armed Forces, the improvement of military infrastructure and increase of military dignity.
The investment’s deformed structure, where around 96% of it comprised the purchase contract of multirole helicopters, as I mentioned before, could be improved. The contract will end in year 2015, and 70% of total investments will exactly go to the closure of this contract, while the remaining part will be used mostly to purchase weapons and ammunition, and of course, for investments which will improve the military structure, for which we project to allocate more than 288 million ALL compared to 0 (zero) ALL in 2014. Although this is a very modest amount, it is a secure step for the rehabilitation of military infrastructure, which was abandoned and without which the functions and mission of the Armed Forces cannot be accomplished. In this regard, we consider as priorities several facilities that have direct impact on the mission and operational capacity of the Armed Forces. During 2014, we built the fourth combat ship. The deepening of the ‘Kepi i Palit’ Base, a base left completely at the mercy of fate, and the deployment of warships’ digital identification system , important for the mission of the Naval Force, is foreseen in the 2015 budget to be financed with 23 million ALL.
In addition, 50 million ALL are allocated in the draft budget for the reconstruction of the group of depots and shooting range of Feken, in Biza. This investment will improve the professionalism and the normal functioning of the Land Force’s training facilities. Besides, other financial means (35 millions ALL) are provided for the modernization of the Joint Operations Centre and communication system, etc. The purchase of technological equipment, hardware, software, licenses and encryption devices for fixed communication, as well as finance and accounting automation are some other budgetary requirements necessary to be covered by the 2015 budget.
Rehabilitation and maintenance of military holiday homes, some of which are on the brink of destruction and until recently used for business and private interests. It is part of our priority to increase military care, this sanctioned and stated at the Defence Directive, for which we have projected 21 million ALL. On the other hand, we will open and will make functional a rehabilitation centre for autistic children of military personnel, which is projected to cost 10 million ALL.
Simultaneously, the process of granting soft loans will begin for the militaries with housing problems, and the legalization of facilities where militaries live since two decades. In addition to loans, from the available financial resources, we are identifying properties that can be turned to housing funds, as we are identifying lands or facilities in cooperation with the National Housing Authority, taking concrete steps in order to finally solve the housing problem, an obligation that derives from the military status.
MoD budget will be supported by secondary incomes generated by its own structures, which will be used exclusively for the Armed Forces modernization. So, we have began a process to identify excess materials, weapons, ammunition and other equipment, which are out of use of the Armed Forces, in order to input them in the market and generate the needed financial resources from them. By this operation will be gain 700-800 million ALL.
Dear Colleagues,
Concluding, I must express once again my firm conviction that the budget presented by the Government is the best version possible for the conditions and strategic priorities of our country. On the other hand, I assure the Government, Parliament and Albanian taxpayers that the Ministry of Defence will succeed, with this budget, and we will take measures for its efficient use, providing additional resources, to meet successfully the constitutional mission in service of defence and security of the Republic of Albania, as well as participation in joint missions with NATO and EU. Therefore, I invite you to vote for it without hesitation.
Thank you!
