TF-Def-book-E.pdf

COLLEGE OF INTERNATIONAL AND SECURITY STUDIES

Program in Advanced Security Studies (PASS)

Exercise

Tighter Fist — Defense Team

English

Edition 6 #4033-E

#4033-E

Exercise Tighter Fist - Defense Team

6th Edition

EXERCISE TIGHTER FIST

DEFENSE TEAM

BACKGROUND

Marislova has experienced several years of political stability. Its government is committed to the consolidation and preservation of liberal democracy and economic growth based on a maturing capitalist market system. It sees friendly relations with its neighbors as a necessary condition for meeting these goals. Indeed, in the long run, it would like to see increasing political and economic integration of the four countries in the Cerulean region.

At the moment, the government of Marislova is in the final stages of preparing its budget for the 2009 fiscal year. Unusual for Marislova, this particular budget exercise is attracting a considerable amount of interest among the population. For weeks now, the media has been speculating on whether the government will be able to continue its policy of modernization through increasing investment in education and infrastructure and still meet its obligation to the IMF to bring its national debt under control. The IMF has recently inferred that it may withdraw financial support if it does not see some improvement in the management of Marislova’s fiscal affairs. As a result, there has been considerable pressure on the lova (the national currency) as speculators shift funds out of the country.

While attempting to deal with the public debt issue, the government has more immediate policy challenges, including reducing the unemployment rate and funding its generous national pension scheme. To add to these challenges, the government is constitutionally required to hold a general election for the House of Deputies before the end of 2009. This is obviously not a convenient time for the government to be considering either tax increases or tax reductions.

The fiscal situation is further complicated by what many perceive to be a need to bolster the nation’s defenses to counter the deteriorating security situation in the Cerulean region. The nation’s weapons systems are old, obsolete and expensive to maintain, most of them dating back to Marislova’s membership in the Warsaw Pact. Since then, progress toward modernization has been halting and somewhat aimless. Indeed, its current force structure, which heavily emphasizes conscript ground forces, remains largely a legacy of Cold War doctrine and planning. However, a national debate, especially among mid-level military officers and other security professionals, is focused on a major transformation of the armed forces, both to meet immediate security concerns and to ensure that the Marislovan military can make a useful contribution to regional and international stability.

A number of members of the government, including the dynamic and militarily inexperienced new Minister of Defense, share this view. They see the major problem as one of too many people in the armed forces. Reducing personnel levels, they argue, would free up funds for new equipment and would ultimately provide more military capability for less money. These members also question the military value of the current conscription system. However, conscription is fiercely defended both by the Chief of the Army Staff, other senior military officers and some members of the government who see it not only as a military asset, but also as a means of achieving social cohesion and nation building. Concurrently, there is a growing public sentiment, especially in the press, that Marislova is spending too much on defense and far too little on internal security.

THE EXERCISE

GENERAL

This exercise is intended to provide you with a realistic example of the competing demands that must be reconciled in establishing a nation’s force structure and its defense budget. At the government level, defense funding must compete with demands from other government programs—some aimed at providing social benefits, others at maintaining the social and physical infrastructure, and still others at encouraging economic growth. At the same time the government’s budgetary discretion is constrained by the necessity to maintain a reasonable balance between revenues and expenditures and to service the public debt.

At the defense level, there is competition for resources both among the various services and also among the demands for personnel, operations and maintenance (O&M), and procurement expenditures. Somehow, through all of this, a coherent force structure and defense budget must be fashioned such that the nation’s military security needs are adequately funded without unduly compromising the social, political, and economic balance.

Exercise Tighter Fist requires the evaluation of alternative government programs and force structures within a constrained fiscal environment. Expenditure requirements for alternative government programs and alternative force structures are determined using simple spreadsheet analysis.

OBJECTIVE

The objective of the exercise is to arrive at a fiscal plan, a force structure and a defense budget for the next fiscal year (2009) for the country of Marislova. This force structure and budget are approved by the government and ultimately accepted by the defense leadership. They are arrived at, however, through a process of negotiation. The negotiation process is essentially a confrontation between defense needs, as seen by the defense leadership, and other national goals, as seen by the government. The defense leadership must make the best case it can for a particular force structure and a defense budget, drawing upon the recently published National Security Strategy and National Military Strategy. (See Appendix) The government must trade off these defense needs against other national goals and do so with full recognition of the political, economic, and security contexts in which Marislova finds itself.

ORGANIZATION

Half of each seminar will be designated as the Government Team and the other half as the Defense Team. You are member of the Defense Team.

Defense Team The Deputy Minister of Defense, the senior civil servant, and the Chief of the Defense Staff (CHOD), the senior military officer, jointly chair the Defense Team. Each has his own staff as follows:

Civilian ministry staff:

1. Deputy Minister of Defense

2. Director of Finance and Personnel

3. Director of Maintenance and Procurement

The Directors carry out staff functions and work for the Deputy Minister.

Military staff:

1. Chief of Defense Staff

2. Chief of Naval Staff

3. Chief of Army Staff

4. Chief of Air Staff

There are currently four military headquarters, one for the Chief of Defense Staff and one each for the three services. The service chiefs are responsible to the CHOD for the operational readiness of their respective forces.

Government Team (for information only) The Prime Minister chairs the Government Team. This team consists of two Council Committees: the Defense and Security Committee and the Social and Economic Committee. The Minister for Foreign Affairs chairs the Defense and Security Committee while the Minister of Finance chairs the Social and Economic Committee. The Prime Minister is an ex officio member of both committees. The two Council Committees are structured as follows:

Defense and Security Committee

1. Minister for Foreign Affairs (Chairman)

2. Minister of Defense

3. Minister of Internal Affairs

4. President’s National Security Advisor

Social and Economic Committee

1. Minister of Finance (Chairman)

2. Minister of Human and Physical Resources (Education, Pensions, Infrastructure)

3. Deputy Minister of Finance (Civil Servant)

DEFENSE LEADERSHIP OBJECTIVES

The Deputy Minister of Defense is attempting to influence his minister to modernize the armed forces and argues that smaller forces with better equipment are preferable to the current situation.

Conscription, he argues, is bleeding the military of funds urgently needed to re-equip the regular forces. However, other ministry officials, each of whom is pursuing his own agenda, are besieging him.

The Director of Finance and Personnel is insisting on a major pay raise for regular forces in order to stem deteriorating morale and to increase the reenlistment rate. However, he opposes eliminating conscription on the grounds that replacing conscripts with regular force personnel would be too costly. He is apprehensive that eliminating conscription will lead to a serious imbalance in the structure of the defense budget. He is desperately seeking more direction on how he should be allocating funding among the competing demands of personnel, O&M, and procurement expenditures.

The Director of Maintenance and Procurement continues to press for more funding for operations and maintenance, but ideally he would prefer to replace much of the existing stock of equipment for all three services. New equipment, he argues, is less costly to maintain. He forcefully argues that a significant proportion of the armed forces will remain operationally useless unless this is done. At the same time he is being pressured by the three service chiefs to replace aging equipment, even to add new equipment. He is under pressure, too, from defense industry representatives who are demanding new orders and are threatening to begin closing production facilities and laying off workers if they do not get them.

The Chief of the Defense Staff is in the unenviable position of having to provide the defense capabilities to meet Marislova’s security needs and at the same time having to reconcile the competing demands for resources from his three service chiefs. In the past, the Chief of Defense Staff has managed to placate the three service chiefs simply by maintaining their historical shares of the defense budget. He has generally left it up to them how those funds were allocated among the various expenditure categories. Given the increasing danger of military conflict and impending fiscal crisis, however, this no longer seems adequate. Some budgetary restructuring can no longer be avoided. He must now give strong direction regarding how the forces are to be structured in order to achieve the maximum capability possible from the funding he expects to receive.

The Chief of the Naval Staff has openly admitted that most of his aged fleet is operationally ineffective. In view of the growing unrest in Denabia and the potential for conflict along the River Dena, his immediate objective is to expand his fleet of river patrol vessels. At the same time, in order to dissuade Tashmara from taking advantage of the crisis and invading Denabia, he is demanding that his frigate fleet should be replaced and preferably expanded.

In view of the developing crisis, the Chief of the Army Staff is demanding that all of his regular force infantry and armored battalions be re-equipped and the six armored reserve battalions be called up to regular force status.

The Chief of the Air Staff believes that his fighter force is adequate to deal with any future threat but only if at least two of his fighter squadrons are re-equipped with more capable aircraft. To provide more support to the Army, however, he is demanding that he be provided with at least six more squadrons of helicopters.

EXERCISE PLAY

Prior to play the Prime Minister should briefly address a joint meeting of both teams on his or her general goals and priorities for the coming fiscal year. His or her major concern will of course be to get re-elected. This of course does not and should not, as in real life, dissuade other players from furthering their own assigned agendas.

The exercise is then played in three sessions. The Government and Defense teams will meet independently in the first two sessions. You will then meet with your seminar’s Government Team in the third session.

Session I. Using all of the information available, and taking into consideration the agreed National Security Strategy, each of the two Defense Team staffs will simultaneously prepare a proposed force structure, including equipment replacement projects, and its proposed budget options for the next fiscal year. The Government Team will be simultaneously preparing its national budget, including an allocation for defense, for the next fiscal year.

Session II. During the second session, the two staffs will come together to agree on a Defense Team proposal. The objective for the Defense Team at this stage is to arrive at a force structure and defense budget that will have some reasonable possibility of being acceptable to the Government Team. A preferred approach here is for the Defense Team to construct three options: an “A” Budget, reflecting the preferred force structure; a “B” Budget, reflecting an acceptable force structure; and an “X” Budget, in the event of a drastic reduction in the Government’s allotment to Defense.

The Deputy Minister of Defense will present the Defense Team proposals to the Government Team at the end of the session. The Minister of Defense will in turn provide the Deputy Minister with the Government Team’s budget proposal. All proposals will be in the form of printed spreadsheet documents.

Session III. During this session both teams will meet jointly under the chairmanship of the Prime Minister. Each side will present the results of its deliberations in the previous sessions.

Using these positions as a starting point, two representatives from each of the two teams will publicly negotiate a compromise force structure and defense budget. At the end of this session, the two teams should have jointly produced a national budget, a defense budget and a force structure and will brief these results to the President (your Seminar Leader).

COMMUNICATIONS

Formal communications between the Government Team and the Defense Team will be through the Minister and Deputy Minister of Defense. However, corridor conversations between members of the teams are permitted and strongly encouraged. The Prime Minister will be the spokesman for the Government Team and the Deputy Minister of Defense will be the spokesman for the Defense Team.

DATA AND ANALYSIS

Each Government and Defense Team is provided with an appropriate Excel Spreadsheet that calculates the budgetary and economic implications of alternative government and defense budgeting choices. Instructions for the use of the spreadsheets are included as a separate page in the appropriate spreadsheet workbook.

For the Defense Team, the spreadsheet is used specifically to calculate the budgetary implications of alternative force structures and equipment replacement choices. You will have no precise idea of what budget will be offered by the government for the next fiscal year, but you do know what budget you are receiving this year, and you do have some idea of the government’s current fiscal situation.

Force structures are greatly simplified. Each force structure component (frigates, river patrol vessels, infantry battalions, etc.) is assigned a fixed personnel level, including support personnel, and an annual O&M requirement. Unit procurement costs are provided for the calculation of force replacement and for force expansion expenditure requirements. Unit costs for headquarters overhead, personnel, O&M and procurement are also provided. O&M costs differ between old and new force units.

Note that the Defense Team can only change values in the shaded areas of the spreadsheet. The 2009 force structure shown is initially the same as that for Year 2008 with the exception that no equipment procurement is yet shown for 2009.

CAVEAT

Given the constraint of time and the necessity to focus on only the main learning objectives, this exercise, like all simulation exercises, necessarily abstracts from reality in several important respects. Most importantly, it imposes a certain suspension of belief in the time required to modify force structures, either through replacement or addition of new equipment and units. In the real world, such changes obviously require several years to take effect. Consequently real world budgeting and force planning will structure planned changes through multi-year budget plans rather than through the single year changes depicted in this exercise. However, despite this time foreshortening, the essential emphasis on making very difficult economic, internal security and military tradeoffs remains entirely valid.

APPENDIX

NATIONAL SECURITY STRATEGY

The Government of Marislova has formally documented its National Security Strategy, which can be summarized as follows:

National Interests

• Sovereignty, independence, and national unity

• Democratic rights and freedoms for all citizens

• Regional and global stability

• Rising standards of living for the population

Domestic Objectives

• Preserve democratic stability

• Enhance economic development

• Respect rights of minorities

• Implement and maintain the rule of law

• Protect and improve the physical environment

• Foster Marislovan culture and language

International Objectives

• Preserve peace and stability in the Cerulean region

• Manage conflict through cooperation with neighbors

• Encourage regional integration

• Contribute to international stability

• Pursue EU membership

NATIONAL MILITARY STRATEGY

On the basis of its National Security Strategy, the defense leadership of Marislova has formulated a National Military Strategy as follows:

National Military Objectives

• Maintain a credible deterrent capability

• Provide credible security guarantees for Denabia.

• Acquire a capacity for conflict prevention and crisis management

• Undertake the modernization of the military forces

• Work toward further integration with regional and Euro-Atlantic military structures

Scenarios (in order of probability)

• Internal conflict in Denabia

• Conflict between Goria and Denabia

• Tashmara invasion of Denabia

Military Goals

• Maintain freedom of navigation on the River Dena

• Ensure Denabian internal stability

• Deter Goria-Denabia conflict

• Deter Tashmaran invasion of Denabia

• Defend legal rights of Marislova within maritime economic zone and on the high seas

• Protect Marislovan borders, coast and air space

• Ensure air and sea access to world markets

• Take part in international humanitarian and peace operations

• Conduct joint and combined operations

• Defeat any invasion by enemy forces

• Project power against attacking forces’ territory, military, and assets

NATIONAL DEFENSE STRUCTURE

The following tables summarize Marislova’s current (simplified) force structure.

Forces Regular Conscript Reserve Total Frigates 10 2 0 12 Patrol vessels 8 4 2 14 Infantry battalions 4 16 5 25 Armored battalions 6 6 6 18 Fighter squadrons 4 0 0 4 Helicopter squadrons 6 0 0 6

Total Personnel Navy 11,900 2,800 600 15,300 Army 30,500 71,000 32,500 134,000 Air Force 9,500 0 0 9,500

GHQ 2,500 0 0 2,500

Total 54,400 73,800 33,100 161,300

There are currently four headquarters, including General Headquarters (GHQ) and one headquarters for each of the three services. The GHQ includes 2,500 personnel while each of the service headquarters includes 1,500 personnel.

The Marislovan GHQ estimates the mobilizable force structures of other countries in the region to be roughly as follows:

Forces Goria Denabia* Tashmara Frigates 0 0 6 Patrol vessels 0 6** 8 Infantry battalions 9 15 40 Armored battalions 3 3 12 Fighter squadrons 3 1 7 Helicopter squadrons 2 1 0 *Denabia’s armed forces are in a disorganized state. National Guard formations are controlled by provincial governments and are of varying quality. The national MoD controls only the small unit of older fighter jets.

**Operated by State Police.

For all three countries, equipment seems to consist of old and obsolete weapons systems, though there is some evidence that Tashmara has been attempting to modernize its air force and navy with the help of military aid from an undisclosed foreign power.

Instructions

This spreadsheet is for the use of the Defense Team during Exercise Tighter Fist.

It allows you to determine the cost of the force structure formed as a result of the strategy and plans you have developed for modifications to the existing force structure. This means that you can, for example, see how much you could save by reducing forces, or how much it would cost to finance a build up of forces, or what the costs would be to change from conscript to completely professional military forces. Your task is to modify the force structure existing in the current year (2008) to meet the security and fiscal challenges that appear to be emerging for the next year (2009).

To use the spreadsheet click on “Force” at the bottom of this sheet and enter your decisions on force structure and equipment replacement for the next fiscal year. Note that the 2008 force structure is used as the initial force structure for 2009. No procurement expenditures are yet shown for 2009.

Changes in force structure involving an increase in forces or a replacement of forces will incur unit costs indicated in the Procurement section on the “Unit Costs” spreadsheet. No financial credit is provided for force reductions, though any eliminated forces will obviously no longer require Personnel or O&M costs. Note that old and new force units incur different O&M costs. Equipment replacement numbers obviously cannot exceed numbers in existing force structure. Note too that you may increase or decrease annual pay rates for all classes of service.

Headquarters units may be reduced or increased proportionately. Reducing a headquarters unit by one-half, for example, will reduce the headquarters manpower requirements (but not the overhead costs) by one-half.

Increases and reductions in force structure will have Personnel and O&M implications that are automatically computed for you.

You may only change values appearing in those cells highlighted in yellow. When you enter your choices, the manpower and budgetary implications of these choices are immediately computed. Detailed budgetary implications are indicated on the sheet marked “Budget” at the bottom of this page.

It is advisable to save your work under a new file name each time that you wish to evaluate an alternative force structure. Printing out the results of each run will make it easier to assess and to compare the budget implications of these alternatives.

EXERCISE TIGHTER FIST DEFENSE TEAM

FORCE STRUCTURE PLANNING

Existing Force Structure 2008 Number of HQs General Navy Army Air Force (GHQ=2500, other = 1500) 1.0 1.0 1.0 1.0

Forces Regular Conscript Reserve Total Unit Personnel* Regular Conscript Reserve Frigates 10 2 0 12 Frigates 800 800 800 Patrol vessels 8 4 2 14 Patrol vessels 300 300 300 Infantry battalions 4 16 5 25 Infantry battalions 3500 3500 3500 Armored battalions 6 6 6 18 Armored battalions 2500 2500 2500 Fighter squadrons 4 0 0 4 Fighter squadrons 800 800 800 Helicopter squadrons 6 0 0 6 Helicopter squadrons 800 800 800

Total Personnel (*Includes all operational, training and support personnel.)

Navy 11900 2800 600 15300 Army 30500 71000 32500 134000 Air Force 9500 0 0 9500

GHQ 2500 2500

Total 54400 73800 33100 161300

Planned Force Structure 2009 General Navy Army Air Force

Number of HQs 1.0 1.0 1.0 1.0

Forces Regular Conscript Reserve Total Frigates 10 2 0 12 Patrol vessels 8 4 2 14 Infantry battalions 4 16 5 25 Armored battalions 6 6 6 18 Fighter squadrons 4 0 0 4 Helicopter squadrons 6 0 0 6

Equipment Replacement Regular Conscript Reserve Total Frigates 0 0 0 0 Patrol vessels 0 0 0 0 Infantry battalions 0 0 0 0 Armored battalions 0 0 0 0 Fighter squadrons 0 0 0 0 Helicopter squadrons 0 0 0 0

Personnel Navy 11900 2800 600 15300 Army 30500 71000 32500 134000 Air Force 9500 0 0 9500

GHQ 2500 0 0 2500

Total 54400 73800 33100 161300

2008 2009 Defense Budget Required (thousands of lovas) 5782200 5527200 Percentage Change -4.4%

Unit Costs

(thousands of lovas)

HQ Overhead 30000

Procurement Regular Conscript Reserve Frigates 100000 100000 100000 Patrol vessels 35000 35000 35000 Infantry battalions 50000 50000 50000 Armored battalions 125000 125000 125000 Fighter squadrons 250000 250000 250000 Helicopter squadrons 125000 125000 125000

O&M (old) Regular Conscript Reserve Frigates 24000 20000 10000 Patrol vessels 12000 12000 6000 Infantry battalions 16000 12500 5000 Armored battalions 35000 30000 12000 Fighter squadrons 45000 45000 45000 Helicopter squadrons 32500 32500 32500

O&M (new) Regular Conscript Reserve Frigates 20000 17000 8000 Patrol vessels 9500 7500 5000 Infantry battalions 15000 12000 4500 Armored battalions 28000 27000 10000 Fighter squadrons 35000 35000 35000 Helicopter squadrons 27000 27000 27000

Personnel (Annual Pay) Regular Conscript Reserve Navy 40 16 14 Army 40 16 14 Air Force 40 16 14

GHQ 50

FORCE STRUCTURE COSTING RESULTS

Initial Costs (thousands of lovas)

Navy Army Air Force GHQ Totals Equipment Calculations Personnel Costs 529200 2811000 380000 125000 3845200 O&M Costs 436000 751000 375000 0 1562000 Frigates 0 0 0 0 Procurement Costs 80000 75000 100000 0 255000 Patrol vessels 0 0 0 0 HQ Overhead Costs 30000 30000 30000 30000 120000 Infantry battalions 0 0 0 0 Totals 1075200 3667000 885000 155000 5782200 Armored battalions 0 0 0 0

Fighter squadrons 0 0 0 0 Budget Distribution Helicopter squadrons 0 0 0 0

Navy Army Air Force HQ Totals Personnel Costs 49% 77% 43% 81% 67% O&M Costs 41% 20% 42% 0% 27% Frigates 0 0 0 0 Procurement Costs 7% 2% 11% 0% 4% Patrol vessels 0 0 0 0 HQ Overhead Costs 3% 1% 3% 19% 2% Infantry battalions 0 0 0 0 Totals 19% 63% 15% 3% 100% Armored battalions 0 0 0 0

Fighter squadrons 0 0 0 0 Helicopter squadrons 0 0 0 0

Planned Costs (thousands of lovas)

Navy Army Air Force HQ Totals Frigates 10 2 0 12 240000 40000 0 280000 Personnel Costs 529200 2811000 380000 125000 3845200 Patrol vessels 8 4 2 14 96000 48000 12000 156000 436000 Navy O&M Costs 436000 751000 375000 0 1562000 Infantry battalions 4 16 5 25 64000 200000 25000 289000 Procurement Costs 0 0 0 0 0 Armored battalions 6 6 6 18 210000 180000 72000 462000 751000 Army HQ Overhead Costs 30000 30000 30000 30000 120000 Fighter squadrons 4 0 0 4 180000 0 0 180000 Totals 995200 3592000 785000 155000 5527200 Helicopter squadrons 6 0 0 6 195000 0 0 195000 375000 Air Force

1562000 Budget Distribution

Navy Army Air Force HQ Totals Frigates 0 0 0 0 0 0 0 0 Personnel Costs 53% 78% 48% 81% 70% Patrol vessels 0 0 0 0 0 0 0 0 0 Navy O&M Costs 44% 21% 48% 0% 28% Infantry battalions 0 0 0 0 0 0 0 0 Procurement Costs 0% 0% 0% 0% 0% Armored battalions 0 0 0 0 0 0 0 0 0 Army HQ Overhead Costs 3% 1% 4% 19% 2% Fighter squadrons 0 0 0 0 0 0 0 0 Totals 18% 65% 14% 3% 100% Helicopter squadrons 0 0 0 0 0 0 0 0 0 Air Force

Economic Impact 2008 2009 GDP (millions of lovas) 207500 214763 1562000 GDP Growth Rate 3.5% 3.5% Defense (millions of lovas) 5782.2 5527.2 Defense as Share of GDP 2.8% 2.6%

Net Changes

Increases

Total O&M

Remaining Old

Total New

O&M Calculations

O&M Remaining Old Equipment

O&M New Equipment

Expenditure Distribution

70%

28%

0% 2%

Personnel Costs O&M Costs Procurement Costs HQ Overhead Costs

Expenditure by Service

18%

65%

14% 3%

Navy Army Air Force

HQ