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Report on Allied Contributions to the Common Defense
A Report to the United States Congress by the Secretary of Defense
U.S. Department of Defense
March 1997
Annex: Data Notes and Country Summaries
This annex presents technical notes on the uses, sources, and limitations of the data presented in this Report, and provides a recap of selected responsibility sharing indicators on a country–by country basis.
The assessments presented in this Report are only as good as the data upon which they are based. The Department has every confidence that the data used for the assessments in this Report are as complete, current, and comprehensive as they can be, within the limits of the legislation.
Timing and Limitations
The FY 1997 Defense Authorization Act stipulates that allies should take certain actions or achieve certain results in their respective indicators of responsibility sharing by September 30, 1997. Due to unavoidable time lags in the collection and analysis of the necessary data, this Report relies on statistics for 1995 and 1996. Projected data for 1997 is either not available for many key elements necessary to the analysis, or where available, is generally unreliable. The Department is therefore unable to assess countries’ performance against Congressional targets set for 1997, and — due to these time lags in data collection and analysis — will be unable to provide reliable measures of country contributions for 1997 for another one to two years.
Moreover, most if not all of the countries affected by section 1084 of the FY 1997 Defense Authorization Act were finalizing their 1997 defense and national budgets even as the Authorization Act was being drafted and enacted into law. Thus, due to the timing of the Congressional legislation, the Administration’s ability to influence nations’ performance against these targets was virtually foreclosed before the goals were established.
Data Sources
Defense spending data are provided by a variety of sources. NATO’s December 1996 report on “Financial and Economic Data Relating to NATO Defense” is the primary source for past and current defense spending data for the NATO nations, including the United States. Sources of defense spending for Japan, the Republic of Korea, and the GCC nations include U.S. embassies in the host nations, recent national defense white papers (where available), and the International Institute for Strategic Studies (IISS). Wherever possible, the Report presents defense spending figures according to the NATO definition of what constitutes defense spending. According to this approach, defense expenditures are defined as outlays made by national governments specifically to meet the needs of the armed forces. In this context, the term “national government” limits “defense expenditures” to those of central or federal governments, to the exclusion of state, provincial, local or municipal authorities. Regardless of when payments are charged against the budget, NATO defense expenditures for any given period include all payments made during that period. In cases where actual 1996 defense outlays are not available, final defense budget figures are substituted. War damage compensation, veterans’ pensions, payments out of retirement accounts, and civil defense and stockpiling costs for industrial raw materials or semi–furnished products are not included in the NATO defense spending definition.
GDP data are also acquired from a variety of sources. GDP serves as a primary macroeconomic indicator of a nation’s economic well–being by measuring the market value of all final goods and services produced in a given year within the country’s borders. GDP data for NATO members and Japan is taken from the Organization for Economic Cooperation and Development (OECD). Because OECD does not have data for GCC countries or the Republic of Korea, figures were drawn from the World Bank and the WEFA Group.
UN peacekeeping data are taken from UN reports for 1996, including voluntary country contributions in support of Security Council resolutions, as taken from embassy reporting (1995 estimates).
Cost sharing data are provided by U.S. embassies and DoD components, including the military departments and commands, based on requests from the Department of State and the Department of Defense. DoD components also provide associated estimates of U.S. stationing costs by country. Extensive manual evaluations are required to determine the estimated value of contributions made by each nation to the United States, and of U.S. expenses incurred overseas. Cost sharing data and stationing cost estimates for a given year are collected by the Department during the spring of the following year, and are then evaluated and published as budget exhibits. Due to the Congressional deadline for this Report, the Department has used estimates for 1995. Data gaps and classification of figures prevent full coverage of cost sharing and stationing cost estimates for the GCC nations.
Bilateral cost sharing is divided into two categories, according to whether the costs are borne by the host nation on–budget (direct cost sharing), or only as imputed values of foregone revenues (indirect cost sharing). Direct cost sharing includes costs borne by host nations in support of stationed U.S. forces for rents on privately owned land and facilities, labor, utilities, facilities, and vicinity improvements. Indirect cost sharing includes foregone rents and revenues, including rents on government–owned land and facilities occupied or used by U.S. forces at no or reduced cost to the United States, and tax concessions or customs duties waived by the host nation.
Foreign assistance data are provided by the OECD. The OECD’s Development Assistance Committee (DAC) encourages commitments of international aid, coordinated aid policies, and consistent aid reporting. The DAC’s definition of “official development assistance” (ODA) is recognized as the international standard for reporting aid provided to developing countries and multilateral institutions. This is immensely useful, since “aid” is an extremely broad term, and encompasses many different types of assistance, which can make contributions from various nations very difficult to compare directly.
OECD has a 27–nation membership (G–27), including all NATO countries and Japan. The G–27 establishes economic and political conditions that nations must meet before receiving assistance (e.g., demonstrated commitment to political reform, and free and fair elections). Subsidies are provided in the form of trade and investment credits, grants, and loan guarantees, and are directed into areas such as food aid, medical supplies, and technical assistance in management training, privatization, bank and regulatory reform, environmental projects, market access/trade, nuclear reactor safety, and democratic institution building. The G–27 is also coordinating nuclear safety assistance to the NIS.
Aid to 13 of the 22 emerging economies of Central Europe and the NIS does not qualify as official development assistance for OECD purposes, but instead is categorized as “official aid” (OA). Both categories, ODA and OA, cover identical types of assistance, with the only difference being the recipient nations. Therefore, total grant aid is the sum of all ODA and OA. Grant aid to Central Europe and the NIS encompasses all OA funding plus the portion of ODA that comprises contributions to the other nine Central European/NIS nations.
This Report discusses available data for 1990 through 1995. At this time, complete and reliable foreign assistance data is available only through 1995 due to complexities and delays in the reporting process. Since final 1995 OA figures for Greece, Korea, Luxembourg, Norway, Spain, and Turkey are not yet available, this Report assumes their OA funding for 1995 was the same as their 1994 contributions.
The following charts provide summary information for responsibility sharing contributions on a country–by–country basis.
Note: with the exception of cost sharing estimates, all dollar figures shown in the country summary charts are in 1996 dollars, using 1996 exchange rates. Cost sharing figures are shown in 1995 dollars, using 1995 exchange rates, to facilitate comparison of Pacific allies' contributions with levels agreed to in agreements concluded in 1995.
| NATO | Pacific Allies | Gulf Cooperation Council | ||||
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Belgium
Canada Denmark France Germany Greece Italy Luxembourg |
Netherlands
Norway Portugal Spain Turkey United Kingdom United States |
Japan
Republic of Korea |
Bahrain
Kuwait Oman Qatar Saudi Arabia United Arab Emirates |
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