LITHUANIA. The recent global economic upheavals have weakened considerably the government's ability to pursue its ambitious programs to modernise and strengthen the country's armed forces. As a result of the sharp decline in the national economic situation and spiralling debt, all government departments have been told not only to tighten their belts, but also to reduce expenditures sharply during Fiscal Year 2009.

     According to Defence Minister Rasa Jukneviciene, who only recently took office, ambitious modernisation plans were made at a time when the full implications of the economic crisis were still unknown. The new four-party coalition government is predicting a 2 per cent drop in gross domestic product, which considerably jeopardises the military enhancement programs, he noted.

Funding decline

It had been planned to raise the defence spending levels for FY2009 to well above 1.2 per cent of GDP, from last year's meagre 1.11 per cent. It had been predicted at the end of last year that the current situation would in fact force the government to reduce this level further, but it now looks as if it will remain stagnant. It had been hoped to raise this percentage gradually to the NATO recommended reference of around 2.0 per cent of GDP as the annual spending level for force modernisation.

     The actual budgetary allocation for FY2009 is expected to total some Litai 1.1 billion   (approximately US$435 million). This represents the first decline in defence spending since 1999 and is well below last year's total of approximately Litai 1.21 billion.

Following the spending cutbacks, the Ministry of Defence has decided not to reintroduce national military conscription as originally planned. This approach had been contemplated as a means of bolstering the strengths of both the Army and Navy.

     This move has now also raised fears that there could be a shortage of manpower in the near future. In addition, senior military chiefs are concerned that this, together with a possible stagnation or reductions in salaries and benefits, could trigger a crisis of morale among the personnel. It is also understood that plans to improve the general quality of life of military personnel, particularly through enhancements to housing and other infrastructure elements, may now be shelved or postponed as a result of insufficient funding.

Procurement plans

In spite of the budgetary cutbacks, Jukneviciene has reaffirmed his intention to maintain most major procurement and modernisation plans. He noted, however, that Lithuania may not be in a position to fulfil all of its international obligations, particularly with regard to participation in multinational operations abroad.

     Defence officials have pointed out that some new procurement plans will, in fact, need to be temporarily shelved. It is thought that both the Army and Navy are likely to be equally and significantly affected, although no details have so far become available.  

     In spite of the gloomy picture, many major ongoing procurement and modernisation programs are being pursued, while the building up of general stores and ammunition stocks will continue. Thus, the Navy will proceed with its plans to acquire two Hunt-class mine countermeasures vessels from the UK Royal Navy, although their financing aspects may now be restructured.

     Jukneviciene has also stressed that funding is being guaranteed in the budget for the procurement of three C-27J Spartan tactical medium transport aircraft for deployment by the Air Force. In addition, plans to purchase two NATO-compatible long-range ground-based air surveillance radars are also being pursued.

     Since all the countries in the region are suffering from the current economic decline, Jukneviciene noted that Lithuania was in discussions with Estonia, Latvia and Poland on pursuing joint acquisition and modernisation programs in order to keep costs to a minimum. In this context, however, Estonian Defence Minister Jaak Aaviksoo recently noted that a long-term tri-national program being formulated by Estonia, Latvia and Lithuania, to jointly procure multi-role combat aircraft may now have to be shelved indefinitely. The proposal had been to acquire between 14 and 20 aircraft by around 2018. In Aaviksoo's opinion, this common fighter project could only become realistic if defence spending were raised to the level of at least 2.0 per cent of the respective GDPs of each country annually; all three countries are currently devoting well short of this proportion of their respective GDPs to defence annually.

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