Minister Xhaçka presents to the National Security Committee the draft budget for 2019: Priority the Modernization, Training and Investments

Published: Thursday, 08 November 2018 16:53

The Modernization of the Light Infantry’s Group Battalion, the implementation of the Integrated Airspace Surveillance System, the improvement of the Integrated Observation System for Marine Space (SIVHD), infrastructure improvements, investments in the modernization of Kuçova Base, the support of the military in international missions, in the home and abroad exercises, their financial treatment and commitment before, during and after civil emergency situations are some of the main issues of the Defense Draft - Budget for 2019, which was presented by the Defense Minister Olta Xhaçka at the Parliamentary Committee on National Security.

Below the full presentation by Minister Xhaçka, in front of the members of the Committee on National Security:

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At this hearing session, I relate the Draft - Budget of the Ministry of Defense for 2019. The most efficient management of such a structure as the Ministry of Defense, a structure that has already gained more responsibility for internal security, in addition to traditional defense duties, also requires more reasonable budget support.

Through this Draft - Budget, we aim to fulfill the objectives of the national plan and the obligations that we have towards NATO. This Draft - Budget is based on the main documents on Defense Strategic Planning: the National Security Strategy, the Military Strategy and supports the Long-Term Development Plan of the Armed Forces.

In this context, the Draft - Budget of the Ministry of Defense for 2019 was based on the requirements of the Armed Forces structures for maintaining and supplementing Capacities for all budget items, ranging from personnel expenses, goods and services expenses, home and abroad transfers expenses, as well as capital expenses.

Expense categories for 2019 for the Ministry of Defense are as follows:

1. Support to personnel at 32% of total expenditures;
2. Operations inside and outside the country and civil emergencies at 6% of expenditures;
3. National and international trainings at 4% of expenditures;
4. Education and training at 3% of expenditures;
5. International structures and commitments at 2% of expenditures;
6. Modernization of the Armed Forces with equipment at 9% of expenditures;
7. Infrastructure improvements at 2% of expenditures;
8. Reliance on goods and services at 29% of expenditures;
9. Support for Health at 4% of expenditures
10. Other operating expenses at 9% of total expenditures.

We have defined the main priorities for supporting with source protection the above categories, which support these budget programs:

• Combat Forces or 36% of expenses are for this program;
• Combat Support Forces or 26% of expenses are for this program;
• Other FA structures that include other budget programs at 14% of expenditures;
• Military Social Support for 24%.

Analyzing the expenses categories for 2019 and the percentage reports of the current and capital expenditures categories to the total budget of the Ministry of Defense, it is concluded that capital expenditure (article 231, investment projects) for 2019 is 11% while the total budget of the Ministry of Defense is at 1.2% of Gross Domestic Product.

Let me remind you that at the NATO Summit held in Wales in September 2014, the Heads of State and Government of the Alliance took the oath of halting the tendency of reducing the defense budgets of NATO member countries as well as the gradual increase of the budget to reach the level of 2% of GDP by 2024.

The Summit also orientated the balance between budget items, in order to increase the capital expenditures to 20% of the Defense Budget, and to pay more attention to the Modernization of the Armed Forces, as the modernization increases the Capacities and enables the accomplishment of the Mission.

In accordance with this commitment, our country sustained the Alliance and took a political commitment to increase the Defense Budget while increasing the level of capital expenditures, and this commitment has been conveyed to the highest leadership instances of NATO and our strategic Ally, who carefully monitor this important and significant process for our commitment to the Alliance. The assessment of security environment by the Alliance has made it even more imperative.

Considering the specific macroeconomic conditions as well as the fiscal capacity of our country, we consider that there should be a more cautious approach to the Defense Budget in order to meet our constitutional obligations as well as those arising from being a NATO member.

Through this Draft - Budget, the Ministry of Defense aims to achieve some important objectives not only in the field of Defense, but also in other aspects, which in a way, perhaps indirectly, affect not least the economy of our country.

Among the military objectives that will support this budget, I would like to emphasize:

• The Modernization of the Light Infantry’s Group Battalion. (Purchase of Light Armor, Ammunition and Accessories for Armed Forces at $ 8.3 million). This is one of the major objectives not only for the national security, but also one of the most important obligations of our country towards NATO in the framework of Collective Defense;

• The improvement of other Capacities and basic equipment for the military of AAF, (Armed Forces systems and equipment at $ 1 million) which are needed to support the AAF activity at home and abroad;

• The modernization of communication and information systems;

• The implementation of the Integrated Airspace Surveillance System. This project is ongoing from 2017 and has a total value of $ 22 million, with a time span in three budget years. Also, this project is being developed with the help of our strategic partner United States of America;

• Improvement in the functioning of the Integrated Observation System for Marine Space. This investment is carried out on the basis of a developed project procured this year and will be implemented in 2019, at $ 2.2 million. These systems are very important for the country's security aspects, our contribution to NATO's security architecture and inter-institutional cooperation for combating illegal trafficking.

• Infrastructure improvements. (Construction of a hangar for the aircraft of the Armed Forces; the construction of the necessary infrastructure for the location of the airspace radar, as well as other infrastructure costs, in the amount of $ 4.4 million. The Armed Forces will administer, develop and maintain a modern infrastructure for living, for education/training, support for operations, and Command and Control of military structures in times of peace, crisis and war.

• The investments for the Kuçova Base Modernization as you are aware; the North Atlantic Council has taken the decision to use the Kuçova Air Base as the NATO support base. Thus, it has been agreed to its modernization through the implementation of several projects that will be joint investment between the Albanian Government and NATO. This will be an ambitious project that places our country in the map of important NATO points. I believe we all agree that building such a base brings with it multiple benefits. First, the level of security of the country increases. Enhancing the perception of security increases the likelihood of attracting foreign investors. There will be a revitalization of the local economy, through infrastructure improvements, employment and business services, etc. This is an investment of such magnitude and an opportunity for which we must be very serious in co-operation with the Alliance.

This budget will develop the operational capacities of the Armed Forces in the areas of:

• SAR Capacities, which represent the AAF capabilities to carry out search and rescue operations on land, air and sea;

• Interoperability Capacities within its components; other national institutions and agencies as well as allied forces;

• Command - Control (C2) Capabilities that represent the ability to exercise authority and leadership responsibilities to accomplish the mission;

• Capacities to refine the recruitment process by increasing co-operation with central and local institutions, as well as with educational institutions and civil society, as a key factor in recruiting AAF candidates with high intellectual and physical capabilities.

The MoD has already taken under institutional command the General Directorate of Civil Emergencies and the General Directorate of State Material Reserves. Taking over these structures increases our financial obligations. Now, in addition to intervening in dealing with Civil Emergencies, we are also conducting preventative works that are costly. Also, we have the obligation to compensate for damages caused to private property of citizens from civil emergencies.
With the funds allocated to the Ministry of Defense, in addition to fulfillment of the constitutional mission of the Armed Forces, we will also work on community assistance, as infrastructure intervention in remote areas, construction of

"Bailey" bridges, hotspots' clearance, removal of the rocks that obstruct road axes, or pose a threat to citizens' safety, medical visits for the communities in the remote areas, etc. Hence, besides the legal obligations, some of the funds will be channeled into human issues and raising the quality of life of the citizens.

The priority of the Armed Forces for 2019 will also be the increase of financial treatment and motivation of the personnel. We will aim to modernize their education and training, according to the NATO standards.

We are giving a substantial contribution to the engagements in the structures and operations within the Alliance. Our goal and NATO's demand is to further increase this contribution and representation.

Our country is a participant in the regional security initiatives and for the year 2019 will take the lead of some of them, which requires support with budget funds for the good functioning of these structures. Currently, we have just taken the lead of the Cooperation and Security Centre (RACVIAC). Next year we will take the lead of SEDM (Southeast European Defense Ministry) and SEDM Secretariat.

Honorable colleagues,

For the arguments outlined above as well as our government's NATO policy to increase the Defense Budget by 1.25% of GDP for 2019, I will call for your support for the realization of these commitments.

Meanwhile, I assure you that the Ministry of Defense and the Albanian Armed Forces will correctly fulfill the obligations and will continuously increase the transparency and efficiency of budget expenditures.

Thank You!

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