oversight

NATO Enlargement: Reports Are Responsive to Senate Requirements, but Analysis of Financial Burdens Is Incomplete

Published by the Government Accountability Office on 2003-05-05.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States General Accounting Office

GAO          Report to Congressional Committees




May 2003
             NATO
             ENLARGEMENT
             Reports Are
             Responsive to Senate
             Requirements, but
             Analysis of Financial
             Burdens Is Incomplete




GAO-03-722
                                               May 2003


                                               NATO ENLARGEMENT

                                               Reports Are Responsive to Senate
Highlights of GAO-03-722, a report to
Senate and House Committees on Armed           Requirements, but Analysis of Financial
Services and Appropriations, the Senate
Committee on Foreign Relations, and the
House Committee on International
                                               Burdens Is Incomplete
Relations




On November 21, 2002, the North                The President’s reports responded to the Senate’s requirements. The
Atlantic Treaty Organization                   information provided in the reports was generally accurate and current.
(NATO) invited seven countries to
join the alliance. To facilitate               The methodology for assessing the likely impact of each invited country on
congressional consideration of                 NATO’s military effectiveness was reasonable. The reports provided a clear
NATO enlargement, the U.S. Senate
mandated in 1998 that GAO review
                                               explanation of the methodology used and provided information on countries’
and assess the reports the Senate              defense reform plans, past and current contributions to U.S. and NATO
directed the President to provide              operations, and expectations of countries’ ability to contribute specialized
on countries invited to join NATO.             military capabilities. The methodology was consistently applied to
The President submitted the                    assessments of each of the seven invited countries.
required reports to Congress on
March 25, 2003. To fulfill its                 The methodology used to analyze each invited country’s ability to fulfill the
mandate, GAO determined if (1)                 full range of financial burdens of NATO membership was not described and
the reports met the Senate’s                   the information provided was limited. The reports included some cost
requirements and the information               information but did not discuss the costs of maintaining representation at
was accurate and current, (2) the              NATO’s headquarters or military command posts. Furthermore, the same
methodology for assessing the
likely impact on NATO’s military
                                               types of information were not consistently provided for each country.
effectiveness was reasonable, and
(3) the methodology for analyzing              European NATO Members and Countries Invited to Join the Alliance
the ability of the invited countries
to fulfill the full range of financial
burdens of NATO membership was
reasonable.



To ensure sound analyses of
invited countries’ financial
capabilities in reports required for
any future NATO enlargement,
GAO recommends that those
reports fully explain the
methodology, ensure the range of
information is sufficient to support
the conclusions, and consistently
apply the methodology.

We provided a draft of this report
to the National Security Council.
The council did not provide
comments on this report.



www.gao.gov/cgi-bin/getrpt?GAO-03-722.

To view the full report, including the scope
and methodology, click on the link above.
For more information, contact Joseph
Christoff, 202-512-8979.
Contents


Letter                                                                                               1
           Results in Brief                                                                          2
           Background                                                                                3
           Reports Responded to the Mandate’s Requirements                                           5
           Methodology for Assessing Likely Impact on Military Effectiveness
             Was Reasonable                                                                          6
           Methodology for Analyzing Ability to Meet Financial Burdens Was
             Limited                                                                                 7
           Conclusion                                                                                8
           Recommendation for Executive Action                                                       8
           Agency Comments and Our Evaluation                                                        8
           Scope and Methodology                                                                     8


Figure
           Figure 1: Countries Invited to Join NATO and Current European
                    NATO Members                                                                     5




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           Page i                                                    GAO-03-722 NATO Enlargement
United States General Accounting Office
Washington, DC 20548




                                   May 5, 2003

                                   Congressional Committees:

                                   In the Senate resolution ratifying enlargement of the North Atlantic Treaty
                                   Organization (NATO) in 1999,1 the Senate required the President to submit
                                   to Congress a classified and an unclassified report that provides updated
                                   information on the status of political, economic, defense, and related
                                   issues for countries invited to join NATO. In addition, these reports are to
                                   provide an assessment of the invited countries’ likely impact on NATO’s
                                   military effectiveness and an analysis of the ability of each invited country
                                   to fulfill the full range of financial burdens of NATO membership. The
                                   President submitted these reports to Congress on March 25, 2003. The
                                   Senate mandated that GAO review and assess these reports.

                                   The President had previously submitted a report to Congress that provided
                                   information on the nine countries that were seeking NATO membership.2
                                   As required by the Senate, this August 2002 report assessed how countries
                                   would further the principles of the North Atlantic Treaty, contribute to
                                   North Atlantic security, and affect U.S. national security interests. It also
                                   evaluated countries’ eligibility for membership and estimated the military
                                   requirements and costs associated with a country’s membership for both
                                   NATO and U.S. budgets. In our November 2002 report, we found that the
                                   President’s report met the Senate’s requirements. However, we provided
                                   additional information on such eligibility issues as border relations,
                                   judicial independence, civil rights, human rights, and minority rights
                                   because the President’s report did not provide a full understanding of the




                                   1
                                   Section 3(2)(E)(ii) of the Senate Resolution of Ratification on the Protocols to the North
                                   Atlantic Treaty of 1949 on the Accession of Poland, Hungary, and the Czech Republic, 144
                                   Cong. Rec. S4217-20, 1998.
                                   2
                                    Section 3(2)(E)(i) of the Senate Resolution of Ratification on the Protocols to the North
                                   Atlantic Treaty of 1949 on the Accession of Poland, Hungary, and the Czech Republic
                                   required the President to provide such a report before NATO extended any invitations to
                                   countries seeking membership.



                                   Page 1                                                     GAO-03-722 NATO Enlargement
                   challenges facing these countries and their efforts to address those
                   challenges.3

                   To fulfill our mandate to review the President’s current reports, we
                   determined if (1) the reports met the Senate’s requirements and the
                   information was accurate and current, (2) the methodology for assessing
                   the likely impact on NATO’s military effectiveness was reasonable, and (3)
                   the methodology for analyzing the ability of the invited countries to fulfill
                   the full range of financial burdens of NATO membership was reasonable.

                   To assess the President’s current reports, we developed information from
                   a broad array of sources, including U.S., NATO, and foreign government
                   reports and analyses of the countries invited to join NATO and discussions
                   with U.S. and foreign government officials. We determined if each of the
                   Senate’s requirements was addressed and if the information provided was
                   accurate and current. To assess the methodologies used for the analyses in
                   the reports, we determined if the methodology was clearly and fully
                   described, if the range of information provided supported the conclusions,
                   and if the methodology was applied consistently to analyses for each
                   invited country.

                   The President submitted a classified and an unclassified report to
                   Congress on the seven countries that NATO invited to join the alliance—
                   Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia. The
                   National Security Council was responsible for developing these reports.
                   While we reviewed both reports, no classified information has been
                   included in our observations.


                   The President’s reports responded to the mandated requirements for each
Results in Brief   of the seven countries invited to join NATO and provided information that
                   was generally accurate and current. The information was generally
                   consistent with the data we collected independently from a broad array of
                   sources, including U.S. government, NATO, and foreign government
                   sources. No recent events have occurred to alter the general information
                   provided in the reports.




                   3
                   See U.S. General Accounting Office, NATO Enlargement: Report Is Responsive to Senate
                   Requirements, but Additional Information Could Be Useful, GAO-03-255 (Washington,
                   D.C.: Nov. 15, 2002).




                   Page 2                                                GAO-03-722 NATO Enlargement
             We found that the methodology for assessing the likely impact of each
             invited country on NATO’s military effectiveness was reasonable. The
             reports clearly identified the methodology used and the assessments in the
             reports provided information on the countries’ defense reform plans, past
             and current contributions to U.S. and NATO operations, and expectations
             of countries’ abilities to contribute specialized military capabilities. The
             methodology was consistently applied to assessments of each of the seven
             invited countries.

             We found that the methodology for analyzing invited countries’ ability to
             fulfill the full range of the financial burdens of NATO membership was
             limited. The reports did not identify the methodology used and did not
             provide information on the costs of maintaining representation at NATO’s
             headquarters or military command posts, which representatives of the
             invited countries consider part of the costs of membership. In addition,
             invited countries’ representatives to NATO stated that their commonly
             funded costs and the costs of maintaining representation at NATO ranged
             from about 1 to 4 percent of their defense budgets and that these total
             costs have been included in their budgets. The reports also did not identify
             the costs of NATO membership as a percentage of the countries’ total
             defense budgets. This information would have identified the level of
             demand these costs would place on the country’s total allocation of funds
             for defense. Finally, the reports did not consistently discuss the same
             types of information for each of the seven countries. The discussions of
             these types of information for each country are classified.

             Although the methodology for assessing the likely impact of the invited
             countries on NATO’s military effectiveness was reasonable, the
             methodology for analyzing the ability of countries to fulfill the full range of
             financial burdens of membership was limited. Therefore, to ensure that
             sound analyses of invited countries’ financial capabilities are provided in
             future reports, we are recommending that the National Security Council
             fully explain the methodology, ensure that the range of information is
             sufficient to support conclusions, and consistently apply the methodology.

             The National Security Council provided no comments on this report.


             The North Atlantic Treaty was signed on April 4, 1949, by 12 European and
Background   North American countries to provide collective defense against the
             emerging threat that the Soviet Union posed to the democracies of
             Western Europe. Since its inception, NATO has enlarged its membership
             four times as changing political and strategic circumstances have


             Page 3                                            GAO-03-722 NATO Enlargement
warranted. Turkey and Greece joined NATO in 1952, West Germany in
1955, and Spain in 1982.

In 1994, NATO committed to enlarging its membership to include the
newly democratic states of the former Communist bloc. In 1999, Poland,
the Czech Republic, and Hungary became the first of those countries to
join the alliance. At its summit meeting in November 2002 in Prague,
NATO invited seven countries to join: Bulgaria, Estonia, Latvia, Lithuania,
Romania, Slovakia, and Slovenia. Figure 1 shows the invited countries and
the current members of NATO.




Page 4                                          GAO-03-722 NATO Enlargement
Figure 1: Countries Invited to Join NATO and Current European NATO Members




                                      The President’s reports responded to the three requirements in the
Reports Responded to                  Senate’s mandate with regard to each of the seven invited countries. First,
the Mandate’s                         to provide updated information on the five issues required to be addressed
                                      in the report submitted to Congress on August 26, 2002, the reports
Requirements                          included updated information on the political, economic, defense,
                                      budgetary, information security, and legal conditions and preparations of
                                      the invited countries. Because NATO’s military requirements did not
                                      change, the reports included no changes in the methodology for assessing
                                      the potential costs of enlarging the alliance or in the estimates provided in


                                      Page 5                                           GAO-03-722 NATO Enlargement
                     the earlier report. Second, the reports provided an assessment of each
                     invited country’s likely impact on NATO’s military effectiveness. Third, the
                     reports provided a variety of information regarding each country’s ability
                     to meet the financial burdens of NATO membership, including such issues
                     as current and planned defense spending levels and economic growth
                     rates.

                     The information provided in the reports was generally accurate and
                     current. No major events appear to have been excluded. The information
                     provided in the reports was generally consistent with the data we
                     collected independently from a broad array of sources, including U.S.
                     government, NATO, and foreign government sources. The reports’ cutoff
                     date for the timeliness of information was January 31, 2003, and the
                     timeframes for events, particularly recent ones, were usually identified. No
                     recent events have occurred to alter the general information provided in
                     the reports.


                     We found that the methodology for assessing the likely impact of each
Methodology for      invited country on NATO’s military effectiveness was reasonable. The
Assessing Likely     reports clearly described the methodology. That methodology called for
                     assessing the soundness and feasibility of each country’s defense reform
Impact on Military   plan, each country’s support of U.S. and allied actions through
Effectiveness Was    contributions to U.S. and NATO military operations, and the ability of each
                     country to contribute specialized military capabilities to NATO once it
Reasonable           becomes a member. The information provided supported the reports’
                     conclusions about the likely impact of these countries on NATO’s military
                     effectiveness. The discussion of defense reform plans provided an
                     understanding of the status of the countries’ defense modernization efforts
                     and their degree of military preparedness. Identifying examples of how
                     countries have participated in or contributed to NATO or other
                     multilateral defense operations demonstrates how countries can be
                     expected to participate in NATO operations as members of the alliance.
                     Determining what kinds of specialized military capabilities a country could
                     provide to NATO illustrates how the country will enhance NATO’s
                     preparations for future missions. Finally, the methodology was
                     consistently applied in the assessment of each invited country.




                     Page 6                                          GAO-03-722 NATO Enlargement
                       We found that the methodology for analyzing the ability of invited
Methodology for        countries to fulfill the full range of financial burdens of NATO membership
Analyzing Ability to   was limited. The reports did not explain the methodology used and the
                       information provided to support the conclusions was limited.
Meet Financial
Burdens Was Limited    The reports discussed the ability of countries to meet their share of
                       NATO’s commonly funded costs,4 but did not consider the costs of
                       supporting country representation at NATO facilities. Officials of the
                       invited countries told us that their share of NATO’s commonly funded
                       costs generally ranged from about 1 to 2 percent of their annual defense
                       budgets. However, becoming a member also entails the cost of supporting
                       country representation at NATO’s facilities such as its civilian and military
                       headquarters in Belgium and its command posts in Europe. According to
                       officials of each of the seven invited countries, the costs of establishing
                       and maintaining country representation at NATO facilities are part of the
                       costs of NATO membership. Those country officials anticipated that the
                       costs for establishing and maintaining country representation at NATO
                       will vary between under 1 percent to, in one case at least, as much as 2
                       percent of their annual defense budgets. While the reports do not address
                       these costs, officials of the seven invited countries stated that the costs of
                       supporting country representation—along with their share of NATO’s
                       commonly funded costs—have been accounted for in the defense budgets.

                       The reports also did not identify the costs of NATO membership as a
                       percentage of countries’ total defense budgets. Although this was not a
                       requirement, these data would have provided useful information about the
                       level of demand these costs will place on a country’s total allocation of
                       funds for defense.

                       Finally, the discussions of countries’ abilities to meet the financial burdens
                       of NATO membership did not consistently address the same types of
                       information for each country. The report provided several types of
                       information intended to demonstrate the countries’ ability to meet the
                       financial burden of membership. The report provided information on such
                       factors as a country’s share of NATO’s commonly funded costs, the
                       percentage of Gross Domestic Product committed to defense spending,
                       commitment to funding needed defense expenditures, and economic



                       4
                        Commonly funded costs cover NATO’s day-to-day operating costs, military headquarters,
                       and defense infrastructure projects in member countries. Each member of NATO pays a
                       certain percentage of these costs.




                       Page 7                                                 GAO-03-722 NATO Enlargement
                     growth. The discussions of these types of information for each country are
                     classified.


                     The President’s reports responded to the Senate’s requirements, providing
Conclusion           information that was generally accurate and current on each of the seven
                     countries invited to join NATO. While the methodology for analyzing the
                     likely impact of the invited countries on NATO’s military effectiveness was
                     reasonable, the methodology for analyzing countries’ ability to meet the
                     full range of the financial burdens of NATO membership was limited. The
                     methodology used to analyze invited countries’ financial capabilities was
                     not explained. Lack of discussion of the methodology used limits the
                     understanding of how the conclusions were derived. Also, because the
                     reports did not discuss all of the costs associated with NATO membership,
                     the reports did not provide comprehensive support for their conclusions
                     on this issue.


                     To ensure that sound analyses of invited countries’ financial capabilities
Recommendation for   are provided in future reports required under section 3(2)(E)(ii) of the
Executive Action     Senate Resolution of Ratification on the Protocols to the North Atlantic
                     Treaty of 1949 on the Accession of Poland, Hungary, and the Czech
                     Republic, we recommend that the National Security Council fully explain
                     the methodology, ensure the range of information is sufficient to support
                     conclusions, and consistently apply the methodology.


                     We provided a draft of this report to the National Security Council. The
Agency Comments      council provided no comments on this report.
and Our Evaluation
                     We assessed the President’s reports by determining the extent to which
Scope and            they addressed each of the mandated requirements. We assessed the
Methodology          accuracy of the information in the reports by determining if it was
                     consistent with the information in the sources we developed. We assessed
                     the currency of the information by determining whether any recent events
                     identified in our sources raised questions about the accuracy of any of the
                     reports’ main findings. We did not independently assess foreign laws or
                     regulations. To make this assessment, we developed an extensive array of
                     documentary information from a broad spectrum of sources, including
                     reports and analyses of the U.S. government, NATO, and governments of
                     the seven countries invited to join NATO, including:



                     Page 8                                          GAO-03-722 NATO Enlargement
•   invited countries’ commitments to NATO upon accession and the
    timetable for meeting those commitments;
•   invited countries’ defense modernization and reconstruction plans and
    their planned defense expenditures;
•   NATO assessments of invited countries’ defense capabilities;
•   invited countries’ documentation updating progress in meeting NATO
    political, economic, budgetary, information security, and legal
    membership goals;
•   the U.S. State Department’s country background reports and its annual
    reports assessing human rights practices and religious freedom;
•   reports of the Congressional Research Service on NATO enlargement;
•   the European Union’s 2002 annual regular progress report on the political
    and economic developments and other preparations of countries seeking
    membership in the European Union;
•   Freedom House 2002 Nations in Transit report’s country ratings of
    democratization, rule of law, and economic liberalization;
•   Freedom House Annual Survey of Press Freedom 2002;
•   Transparency International Corruption Perceptions Index 2002; and
•   related media coverage.

    We met at NATO headquarters in Brussels, Belgium, with representatives
    of Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia,
    and obtained additional testimonial evidence through discussions with
    U.S. agency officials in Washington, D.C. and NATO headquarters, as well
    as with NATO international staff.

    To assess the methodologies used to analyze the likely impact of new
    members on NATO’s military effectiveness and the ability of invited
    countries to fulfill the full range of the financial burdens of membership,
    we determined (1) if the methodology and analytical criteria were clearly
    and fully described; (2) if the methodology provided a range of
    information that supports the conclusions; and (3) if the methodology
    were applied consistently to analyses for each of the seven invited
    countries.

    We conducted this review from December 2002 to April 2003 in
    accordance with generally accepted government auditing standards.


    We are sending copies of this report to other interested congressional
    committees, the Chairman of the National Security Council, the Secretary
    of State, and the Secretary of Defense. We will also make copies available




    Page 9                                          GAO-03-722 NATO Enlargement
to others upon request. In addition, this report will be available at no cost
on the GAO Web site at http://www.gao.gov.

Please contact me at (202) 512-8979 if you or your staff have any questions
about this report. Key contributors to this report were F. James Shafer,
Beverly Ann Bendekgey, Monica Brym, Martin de Alteriis, Ernie Jackson,
and Lynn Cothern.




Joseph A. Christoff, Director
International Affairs and Trade




Page 10                                          GAO-03-722 NATO Enlargement
           List of Congressional Committees

           The Honorable Richard Lugar
           Chairman
           The Honorable Joseph R. Biden, Jr.
           Ranking Minority Member
           Committee on Foreign Relations
           United States Senate

           The Honorable John W. Warner
           Chairman
           The Honorable Carl Levin
           Ranking Minority Member
           Committee on Armed Services
           United States Senate

           The Honorable Ted Stevens
           Chairman
           The Honorable Robert C. Byrd
           Ranking Minority Member
           Committee on Appropriations
           United States Senate

           The Honorable Henry J. Hyde
           Chairman
           The Honorable Tom Lantos
           Ranking Minority Member
           Committee on International Relations
           House of Representatives

           The Honorable Duncan Hunter
           Chairman
           The Honorable Ike Skelton
           Ranking Minority Member
           Committee on Armed Services
           House of Representatives

           The Honorable C.W. Bill Young
           Chairman
           The Honorable David R. Obey
           Ranking Minority Member
           Committee on Appropriations
           House of Representatives


(320175)
           Page 11                                GAO-03-722 NATO Enlargement
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