NATO Funding: What is the Issue?

President Trump accused America’s NATO allies of “....not paying what they should”. NATO is based on collective defence – an attack on one or more is considered an attack against all (something like “The Three Musketeers”!). Treaty members target spending 2% of economic output (GDP) on defence – but that is just a guideline. There is no penalty for not meeting the guideline. Each country (in the 28 member alliance) decides how much to spend and how to use the money.

The North Atlantic Alliance has its own military budget of Euro 1.29 billion. This is used to fund some operations, finance the command centre and also for training and research. The Alliance also has a civilian budget of Euro 234.4 million to fund NATO Hq. in Belgium and its administration.

Only 5 members meet the 2% target – the U.S. Greece, Poland, Estonia and the U.K. Among the rest, the larger economies like Germany, Italy and Canada are well below the target. In 2016, 22 of 28 NATO members increased their defence budgets. Overall, spending rose by 2.9%.

Why spend? Fear of Russian aggression. So the border states of Latvia, Lithuania and all splurged in 2016. But is there another Trump hidden agenda? To boost sales of U.S. defence manufacturers – Lockheed Martin, Northrop Grumman, Boeing and the like? We will never know for sure but a businessman is always a businessman.

What about Malaysia? We provide 1.1% of our GDP on defence. Under the previous Government, we had equipment that may not be combat ready, planes that may not fly and submarines that may not submerge. And who is our enemy? Singapore? Indonesia? Or, China? More likely it is the bandits from Mindanao!