OSLO: The Norwegian government’s decision to add an additional $230 million to its defense budget for 2017 will secure spending in the Norwegian Defense Forces’s (NDF) Long Term Defense Plan while critically protecting the military’s modernization and procurement programs.
The increase will lift the level of Norway’s overall defense budget in 2017 to more than $6 billion. Of this amount, procurement will account for $1.5 billion while infrastructure will consume $370 million.
The defense-spending hike has been problematic for Prime Minister Erna Solberg, whose center-right minority coalition government is politically fragile and under pressure.
Opposition leaders have criticized Solberg for resorting to using record levels of capital, held in the state’s sovereign wealth vehicle, the Government Pension Fund (GPF), to both meet deficit targets in the 2017 national budget and stimulate growth in Norway’s oil revenue-dependent economy.
However, cross-party support for the defense budget increase was energized by a number of key factors. These included the need to keep pace with Russia’s military strengthening in the High North. Moreover, Norway is concerned over the prospect that US investment in maintaining security in Europe and the High North region could weaken under a Trump administration.
The new extra funding measures will serve as the initial step in a process to add almost $20 billion to NDF budgets over the next 20 years, said Defense Minister Ine Eriksen Søreide.
“When we introduced the new Long Term Defense Plan we said that we had to first make sure that what we already have actually works. That is exactly what this budget aims to do. We still have a long way to go, but this is an important first step towards building a more capable and sustainable Armed Forces for Norway,” said Søreide.
Significantly, in terms of procurement and new acquisitions affordability, the additional spending provision addresses the need to offset for the Norwegian krone’s sharp fall in value against the US dollar. For the first time, Norway’s 2017 defense budget will include funding increases that directly target the growth in the cost of military equipment.
