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Finland DEFENSE SPENDING
The combined budget of the Defense Forces and the RVL
have
remained fairly constant during the 1980s as a percentage
of
total government expenditures, in most years ranging from
5.5 to
6 percent. Defense costs generally constituted about 1.5
percent
of gross national product
(GNP--see Glossary), although
they rose
to 1.7 percent in 1983 before diminishing to 1.48 percent
in 1987
as a consequence of budget cuts imposed on the Ministry of
Defense. The defense budget totaled Fmk5.58 billion in
1987 and
Fmk6.04 billion in 1988.
During the 1982-86 period, the principal expense
category was
equipment replacement and procurement (31 percent of the
total
budget), followed by payroll costs (25 percent). Upkeep of
conscripts and training expenses averaged 13 percent of
the
budget; operations and maintenance, 16 percent; and real
estate
and other expenses, 15 percent. The procurement projection
for
the 5-year period, 1987-92, earmarked 48 percent for the
army, 25
percent for the air force, 20 percent for the navy, and 7
percent
for common-use equipment. This reflected increased
emphasis on
the acquisition of armor and firepower for the army and a
diminishing rate of procurement for the air force. The air
force
share was expected to rise again after 1992, however, when
the
entire fleet of fighter aircraft was scheduled for
replacement.
Although Finland's defense budget showed a slight
increase
during the 1980s, it failed to maintain the targeted
annual real
growth rate of 3.8 percent established by the Third
Parliamentary
Defense Committee in 1981. In both absolute and relative
terms,
Finland's defense budget continued to be among the lowest
in
Europe. A study prepared by the United States Arms Control
and
Disarmament Agency found that Finland's defense effort,
expressed
in terms of military expenditures as a ratio of GNP, was
among
the lowest of the developed countries of the world. Only
Japan,
Luxembourg, and Iceland had lighter defense burdens, based
on
1985 data. Finland also ranked low in military
expenditures per
capita (US$156 in 1984, calculated in 1983 dollars) and as
a
percentage of central government expenditures (one hundred
twenty-third in the world in 1985).
These low budget outlays presaged future deficiencies
in
modern arms when existing equipment had to be replaced. As
senior
military leaders pointed out, costs of new weaponry were
increasing at a rate of 5 to 15 percent annually on world
markets, with the result that new procurements could not
keep
pace with equipment obsolescence and deterioration,
especially in
the army. Finnish analysts argued, however, that the
budgeted
figures somewhat understated Finland's real defense effort
compared with other Scandinavian countries, because of the
low
conscript pay and the fact that certain military
infrastructure
costs as well as military pensions were not included in
the
defense budget. Moreover, the RVL, which would be an
important
adjunct to the military in an emergency, was included in
the
Ministry of Interior budget rather than in the defense
budget.
Data as of December 1988
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