Center for Strategic Decision Research

Mr. Alfred Volkman
Director of International Cooperation
Office of the U.S. Under Secretary of Defense (Acquisition, Technology, and Logistics)

Dealing with the Challenges in Afghanistan and Pakistan: How Can the International Defense Industry Contribute?

OPENING REMARKS

This is the panel on the defense industry. The defense industry is an important part of global security. The United States and many of our allies depend mainly on a publicly owned, profit-driven industry to provide the military equipment and technology that is essential to military success, and the close relationship between defense ministries and industry is only likely to grow closer in the future. We talk about the defense industry, but really the industry that supports defense is much broader than what traditionally has been characterized as the defense industry. I think that if you look at the representatives from industry who are here for this panel, you get that point.
The defense industry depends on government to define the military capabilities that are required and to provide the resources necessary to acquire these capabilities. I’ll say just a few words about this before I turn the discussion over to representatives of the defense industry to talk about resources and capabilities.

COPING WITH LIMITED AND SHRINKING DEFENSE RESOURCES

The resources available to acquire defense equipment are limited now, and they are very likely to be limited to a greater extent in the future. Today, only 6 of 26 European NATO partners spend 2% or more of their gross domestic product on defense, and very little of this is spent on what would be characterized as defense investment. Less than half of the members of the Alliance allocate 20% of their limited defense spending to investment in technology and equipment. In the past 20 years, European defense spending has been disproportionately consumed by personnel costs and I understand that during the weekend of this workshop the German Parliament is actually looking at whether or not they should continue to have an army that is based on conscripts.

The resources available for defense are likely to shrink greatly in the future as nations strive to reduce national debt. So investments in defense equipment capability are likely to shrink at an even faster rate, which means that nations must prioritize their capabilities and eliminate expenditures on the capabilities that are not necessary or, at any rate, are the least important. My observation is that prioritizing military capabilities and eliminating military capabilities are very difficult things for governments to do. Secretary Gates has made a very significant effort in the United States over the past several years to convince Congress that there are military capabilities and programs that we no longer need. We need to eliminate these programs because we need to spend our scarce resources on things that have a higher priority. He has had a very difficult time convincing the U.S. Congress, as well as the military departments, that this is necessary.

There are many threats that we need to address, and we need to prioritize our capabilities to address them. The U.S. and our NATO allies must fight and prevail in the difficult wars that we are fighting now in Afghanistan and Pakistan. And we still must be prepared to fight against conventional threats against the territory of NATO. We also must be prepared to defend against the more likely threats from terrorists and nations with nuclear missiles that could emerge within the next 10 years, or that are emerging now.

PREPARING FOR PROBABLE THREATS

The recently published report by the Group of Experts on the new Strategic Concept for NATO, which is on the NATO Web site, identified the most probable threats in the next 10 years to be an attack by ballistic missiles, which could be nuclear armed; strikes by international terrorist groups, and cyber assaults, which we discussed at great lengths earlier in this workshop. So what are the high-priority capabilities that NATO and our industry must be prepared to help us address? Any list would include:

(a) Countering improvised explosive devices. They are constantly changing, and we must be very agile in how we counter them.

(b) Missile defense. Any discussion of the threat that is posed by the regime in Iran prompts serious consideration of missile defense for Europe, and the discussion we have had so far indicates that Europe is becoming more and more serious about missile defense.

(c) Cyber security.

(d) Lift. Europe has done much to acquire lift since 2001, when quite frankly there was a great deficiency in lift capability in Europe. All of us need more lift.

(e) Intelligence, surveillance, and reconnaissance. More nations need to bring UAVs to Afghanistan, and we need to have the capability to share the information they obtain with partners. On a positive note, I cannot pass up the opportunity to say that there is a distinct possibility that NATO will award a contract for a ground surveillance system, something which some of us at this workshop have spent a good part of our lives trying to accomplish. I hope it will occur soon.

How can the international defense industry contribute to NATO and allied governments’ ability to acquire these capabilities? For the answer to that question, I am going to turn the discussion over to this distinguished panel of industry experts.