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Poland - Military Spending

Poland launched an ambitious 10-year defense project in 2015 aimed at upgrading its military forces. According to Deputy Defense Minister Czeslaw Mroczek, in April 2016 Poland would chose a supplier of an anti-missile defense system which will reportedly cost up to $10 billion. In total, Warsaw was planning to spend about $42 billion on its military upgrade over the next ten years. Poland's military modernization program includes a missile defense shield, anti-aircraft systems, submarines, combat drones, armored personnel carriers.

While the previous government was prepared to spend $34 billion through 2022 on new weapons and equipment, Defense Minister Antoni Macierewicz stressed in April 2016 that this sum did not take into account maintenance and parts. By his count, Warsaw will spend nearly $62 billion modernizing its military. Waszczykowski cited Russias involvement in Ukraine as the chief reason for the increase of Polands military.

Poland spends more on defense than any other European power: the country raised its military expenditures by 13 percent between 2013 and 2014, spending 2.1 percent of its gross domestic product ($9.9 billion) this year on the military. The increase in military spending is a reaction to the crisis in Ukraine.

Poland has become one of the most vocal critics of the Kremlin, depicting Russia as an aggressor and a threat to Eastern Europe. Poland's ex-President Lech Walesa even went so far as to urge the Western powers to "scare" Russia with nuclear weapons.

Poland is committed to modernizing its armed forces despite prolonged economic woes and will invest about $40 billion in its military within the next decade, Prime Minister Donald Tusk said 03 June 2013. The modernization programs priorities include the purchase of guided missiles for F-16 fighters, the development of special purpose forces and the naval missile division on the Baltic Sea, and the provision of a sufficient number of unmanned aerial vehicles (UAVs) to the military, Tusk said. In making the decision to sustain defense spending levels during the [economic] crisis, we will see to it that those funds are used even more effectively, the prime minister said.

To fulfill defence tasks and missions, Poland allocated (according to the Budgetary Act) 25,719.0 million zlotys (MPLN) to defence expenditures. The 2010 defence expenditures ceiling was established as defined in the act dated 25 May 2001 on restructuring, technical modernization and financing of the Polish Armed Forces (not less than 1.95% of the Gross Domestic Product of the previous year). Within the mentioned amount - 25,448.3 MPLN has been allocated to Part 29 - National Defence, and 270.7 MPLN to the other parts of the state budget. Defence expenditures in 2010 reflect positive trend of the Polish Armed Forces development, capital investment expenses are assumed to reach 22.5% of total MoND budget. Irrespective of budget resources, MoND expects that process of the armed forces modernization will be strengthen by using of some off-budget resources (domestic and foreigner).

There is currently applied in Poland procedures of the planning and realization of expenditure for the purposes of defence which were formulated after the year 1989 within the framework of the politcal and economic transformations which transpired. The objective of the changes was to ensure greater clarity and control over the sphere of financing the defence systems of the defence of the state in accordance with the standards of the North Atlantic Treaty Organization.

An integral part of the democratic control over elements of the defence system of the Republic of Poland is a the clarity of the budget policy. The defence budget results from the acceptance of a strategy of security and defence.

The Parliament yearly defines the annual budget, where the extent of expenditure for military purposes is described. The expenditure of the Ministry of the National Defence is classified as "Section 29" of the state's budget. Some undertakings in the field of defence are financed within the framework of the budgets of other spheres of government and of provinces. There are expenditures on civil defence, works on surveys and growth, tasks of conscription commissions. From the reserve of the state budget have been deliberately targeted at the realisation of social investments, preparation for integration with NATO and the duties connected with the participation of Poland in peace-keeping missions as well.

The particular procedure of working out and endorsing the budget of the Ministry of National Defence is defined in the Public Finance Act from 26th of November, 1998. The basis of planning the budget of the military is the plan of the development of the armed forces. The realisation of the defence budget is a subject of control. The control of military expenditure is realised by public and social institutions - the Ministry of National Defence, the Parliament and the Senate and its Commissions of National Defence, the Highest Chamber of Control, the mass-media.

The role of the Polish Armed Forces in budget creating lies in the articulation and particular Justification of the Army financial needs. The influence of the Parliament appears at the level of creation and realisation of the budget. The public control of the rules and execution of the budget is possible because of its accessibility to the population at large, as the bills for the budget are published in the diary of bills. Very important controlling institution is a treasury control, which tasks are connected mainly with taxes as well as with purposes and legality of expending budget means. The organs controlling the exchequer are the minister of finances and the General Inspector of Treasury Controls. Another organ of control is also Department of Control of the Ministry of the National Defence, The realisation of the budget is examined by, among others, the Highest Chamber of Control and is covered by parliamentary analysis in formulating the national budget. The outlay of budgetary means is disciplined by the demands of the public.

In Poland all military expenditure are a subject of control on some independent levels. There are:

  • the surveillance of the civilian ministry of the national defence on the level of planning and realisation; the minister of national defence within the framework of his competence takes responsibility for the preparation of the principle of the national defence policy and its realisation in the policy of the Council of Ministers;
  • parliament - takes a standpoint in respect to its defence policy in the course of the annual debate on foreign policy and the defence of Poland, which surveys the task and the execution of the state budget, thus giving the government the last word in passing resolutions concerning various aspects of the defence policy;
  • parliamentary works of the Commision of National Defence - talks with defence experts, i.e. chiefs of the defence departments from the Ministries of Finances, Treasury and Economy; analytical works connected with various aspects of the defence policy;
  • analyses carried out on the budget of the military by specialised cells within the Highest Chamber of Control;
  • interpellations and questions of deputies directed to the minister of the national defence;
  • the mass-media, enabling the wide public audience within the country to estimate the effectiveness of the government and the Armed Forces works.

Since 1989, the cornerstone of the Polish Government's foreign and security policy has been the strong strategic relationship with the U.S. and robust participation in NATO. Poland, a NATO member since 1999, is increasingly playing a larger role in defending international security and stability while continuing its internal process of military restructuring and transformation. The Polish government's program to boost defense capabilities gained considerable momentum in 2002 as a major downsizing to reduce Polish military forces to 150,000 neared completion and modernization programs including the procurement of major new systems for land and air forces and upgrades to bring Soviet-era equipment up to NATO standards gained ground. The foremost military modernization issue is Poland's decision in 2002 to acquire 48 new multi-role fighter aircraft, namely Lockheed Martin's F-16 with delivery to take place by 2008. However, among all the NATO nations, Poland had the second lowest percentage of defense spending (10.3 percent) on modernization programs in 2002 - just over half the non-U.S. NATO average of 19 percent.

Poland's economic slump continued in 2002 and forced the Government to take government-wide austerity measures although defense spending was not affected. Poland's defense spending increased by a 3.2 percent in 2002 (to $3.6 billion), but relative to GDP, remained stable at 1.97 percent - slightly above the average of 1.9 percent of GDP for all non-U.S. NATO nations. Poland's GDP increased in 2002 by 1.2 percent in real terms, up marginally from 1 percent growth in 2001. The large reduction in the annual inflation rate - from 28 percent in 1995 to 1.9 percent last year - represents a major accomplishment for both the Polish government and the National Bank of Poland (NBP).

Poland was an active contributor to NATO, UN, and OSCE peacekeeping operations and observer missions in 2002 with approximately 1,575 military and civilian personnel deployed in 15 peacekeeping operations and observer missions in Europe, Africa, and Asia. Of note, Poland has shifted its participation toward NATO-led operations and away from its traditional focus of UN-led operations. Poland made no financial contributions to UN Peace Operations. In 2002, Poland maintained a 573-person force in KFOR and 297 in SFOR.

At the request of the U.S., Poland provided Soviet-era weapons and ammunition to the U.S.-sponsored Georgia Train and Equip Program and offered to provide military equipment to the Afghan National Army as well. The Polish Ministry of Foreign Affairs disbursed approximately $42 million of humanitarian and developmental assistance in 2002. Assistance to Afghanistan included medicines, clothing, and educational scholarships for Afghan women at Warsaw University.

Poland continued in 2002 to conduct an active mentoring program for NATO aspirants. Poland spent roughly $500,000 in 2002 on Partnership for Peace related activities. The Polish Ministry of Defense negotiated work plans with NATO aspirants to foster military reforms and adjustment to NATO standards, provided training to aspirant officers and NCOs at Polish military academies, and transferred excess Soviet-era equipment to a few aspirants with the idea of creating capabilities on which NATO could draw.

The U.S. and Poland continued in 2002 to develop the bilateral Defense Transformation Initiative, focusing on unit partnerships with the goal of increasing interoperability through training and joint exercises. The bilateral Military Capabilities Initiative (MCI) focuses on cooperative activities that do not involve any increase in U.S. funding for the Polish military.

Poland's military is continuously undergoing changes - all designed to restructure itself into a more capable and mobile force compatible with NATO and EU troops. It is changing every area of operation: force structure, staff organizations, training programs, doctrine, security procedures, etc. However, the changes in Poland's military and the reorganization plan for the defense industry must compete with other reforms that the state budget must also finance.

In 2007, the Polish government allocated nearly USD 7.2 billion (PLN 21.58 billion), for defense expenditures of which 23% for modernization of the army, hardware purchase and infrastructure maintenance. Forty five percent will be spent on salaries and pensions. The modernization of the Polish army includes improvement of troop capacity and mobility and improvement of air defense system. The modernization project involves purchase of military equipment (armored transportation vehicles and military transportation aircraft) and ammunition (armor piercing guided missile and ship to ship missile system for the Polish Navy). NATO force goal requirements are also driving equipment-related decisions, ranging from modernization of Mi-24 helicopters, and Mi-8 and Mi-17 transport aircrafts.

Poland receives one third of NATO funds allocated for the development of defense infrastructure projects. By the end of 2009, the value of NATO financed projects in Poland will reach PLN 2.5 billion (USD 781 million). Also, Poland has one of the largest IMET programs in EUCOM and is one of top 10 worldwide. Poland has trained over 2200 military and civilian students since 1992 using IMET, FMS and CTFP. In FY2006 Poland sent 77 military students to be trained in the U.S. and 85 students were projected for FY2007. These programs help reform defense establishments of Poland and build Poland's capacity to conduct peace and stability operations. Poland has a state Partnership Program with the Illinois National Guard.

Poland's defense budget is negotiated annually and the budget parameters are set during the negotiations. The Polish government is required by law to hold tenders for major procurements. Financial value, project complexity, international cooperation and political sensitivity determine the project category. Poland has an offset policy coordinated by the Department of Offset Programs at the Ministry of Economy. These offset requirements are an important part of defense procurement contracts. Offsets are sensitive political issues that involve regional interests in Poland, therefore, the allocation of offsets is the exclusive responsibility of the Ministry of Economy. Offsets can best be approached through partnerships with local companies.



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