Henn Põlluaas: Who else benefits from defense cuts besides Russia?

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Henn Põlluaas. Source: Siim Lõvi /ERR

Does anyone else, besides Russia, stand to gain from defense cuts in Estonia? I hope the coalition will seriously ponder this question and abandon its incomprehensible austerity plan, Henn Põlluaas writes.

The government's decision to dial back Estonia's defense spending has made plans to liquidate the more than 100-year-old Band of the Estonian Defense Forces and chaplain service the main topic of discussion in recent weeks. The same fate is in store for the Police and Border Guard Board Band.

Protest voices have been heard coming from every direction, with people lamenting the devastating effect going after traditions, symbols and spiritual support would have for Estonian culture, morale and spirit.

There can be no doubt that the EDF band is significant in terms of the nature of the defense forces, reinforcing the defensive will of our citizens during public events, and that the need for psychological and spiritual services will only grow in time. However, we are now almost the only country in the world to lack an armed forces band and chaplain service. I agree with everyone who deem this unacceptable.

Cuts a deeper problem

However, I'm worried about something else entirely. The matter of spending cuts goes well beyond this single issue that public debate has concentrated on. In other words, there is a forest hidden behind the trees.

Thinking of the practice of strategic communication, it is quite possible that sacrificing the band and chaplaincy first was a ploy to divert attention from the extent of cuts, the consequences of harming defensive capacity and its background. Whereas it seems to have been at least partially successful. Minister of Defense Kalle Laanet (Reform Party – ed.) is blaming Commander of the Defense Forces Lt. Gen. Martin Herem who was just as surprised to learn about the cuts as everyone else, while the rest of it is hidden behind a veil of secrecy.

The matter of liquidating the band and chaplain service is important, while it is also financially trifling compared to austerity plans for the first and consecutive years. It is a drop in the ocean. The EDF will be laying off a total of 200 people in the first year, reducing the number of conscripts instead of a planned increase, canceling a number of important procurements, trainings etc. What will happen during years three and four? How much more will we cut and what will it concern? What about the Defense League?

Cutting (or hiking) the defense budget is not just a political matter and therefore exclusively the prerogative of politicians or the government that, frankly, lacks relevant competency. It is a broader matter of security and national independence to which representatives of respective fields should draw the public's attention to a greater degree.

While there have been a few positive examples, the discussion over how reducing defense spending will affect our security and defensive capacity more broadly, as well as what we really need, has remained too modest.

The most important question is why cut around €100 million from the defense budget over four years. Why sell the recently renovated mine harbor that was retrofitted to facilitate NATO troops and in which dozens of millions of euros have been invested? And sell it for just €20 million in a situation where constructing a new military port would cost at least €80 million and constitute spending defense euros on concrete and not boosting actual defensive capacity etc.

The government of the Reform Party and Center Party, including Defense Minister Laanet, has acted highly regrettably. Contrary to the promise made to the Riigikogu to contribute to defense, relevant spending has been dialed back in the 2022-2025 fiscal strategy. On the other hand, we are told that there is no cut as the total annual budget is set to grow.

While defense spending will not fall below 2 percent of GDP, the total planned defense budget was reduced. The previous government did not cut the summary defense budget. Even though the coronavirus crisis impacted the Estonian GDP, defense spending grew to 2.3 percent. Additional defense investments were also in the pipeline. Now, we are returning to 2 percent of GDP and will see a reduction of planned expenses by €100 million over four years. It is absurd to claim this does not constitute austerity.

All this in a situation where the security situation in our region and elsewhere is becoming increasingly tense and balance of power between NATO and Russia in the Baltic region simply doesn't exist.

A situation where even the previously planned budget was not enough to fill all vital gaps in military capacity! A situation where our defense spending is one of the lowest in NATO, behind even Latvia and Lithuania! A situation where both our allies and Defense Forces commander have said we need to spend more than 2 percent to ensure necessary capabilities!

In a situation where our allies ask why should they contribute taxpayer euros to defending Estonia and risk the lives of their men during a time Estonia dials back defense spending! All the while, the world is largely looking elsewhere and efforts to reduce deterrence are leaving our adversary increasingly tempted to put unity in NATO to the test!

Who benefits?

The government has explained its cuts plan through the need to balance the budget. Pitting fiscal balance against national security and defensive capacity is more than peculiar and shows that the government has its priorities messed up. More so as we are the only country where this balance has been turned into an all-encompassing fetish by the government. This despite the fact that the previous economic crisis showed that cuts for the sake of fiscal balance only work to deepen the negative effects of the crisis and cause recovery to take longer.

The most curious aspect is that these cuts for the sake of cutting are unnecessary. They are unnecessary in national defense, internal security, education and elsewhere. The pension reform alone is set to free up some €300 million that for some reason is not reflected in the infamous state budget strategy. It is not the only such source of revenue. There are others.

For example, the State Forest Management Center (RMK) regarding which the government said it would no longer be withdrawing dividends in recent volume but also did nothing to dial back felling volumes. We can save €10 million by postponing the construction of the environment ministry's new building. The list goes on. Is a single ministry building more important than our national security and defensive capacity?

The field of defense needs providence and smart decisions, while blanket cuts just aren't it. We could stop making payments for the C-17 transport aircraft that has never fully justified itself.

A sharp look needs to be given the defense procurements process in which the National Audit Office has detected numerous shortcomings. For example, tenders that meet the Defense Forces fiscal capacity but not its needs, or preferring Rolls Royces to Volkswagens, figuratively speaking, shortcomings in market research, customizing tenders to cater to particular bidders and procuring equipment in several smaller tenders instead of opting for a bigger and cheaper one right away etc.

We are talking about sums that would allow us to maintain a number of mighty orchestras. But the EDF is not deprived of funds that could be saved in this manner and procurements are already being revised. Therefore, I will not concentrate on that here.

All forecasts suggest that the economy is about to grow despite setbacks delivered by the coronavirus. That means that instead of looking for things to cut from the defense budget, we should urge the government to bin its austerity plans, take defense spending to at least 2.6 percent of GDP and fill all major capability gaps. Including those currently excluded from the development plan that fails to consider realistic security threats and needs.

We need to borrow if necessary to make this happen, following the example of other states. Finland is set to borrow €1.7 billion this year for a total of €10 billion to procure new fighters. Because Estonia has a good credit rating and loan markets are favorable, we could even borrow at negative rates. It would be wise to take advantage of this situation, especially if failure to do so means filling important gaps in our military capacity will remain a distant dream and leave our eastern neighbor too tempted to realize its geopolitical ambitions.

The Conservative People's Party (EKRE) proposed hiking defense spending by €300 million in the previous government. The goal was to fill two major gaps – procure coastal defense and medium-range air defense systems. Unfortunately, the proposal to procure anti-aircraft capacity was blocked by then Defense Minister Jüri Luik (Isamaa) and the EDF commander as his subordinate who had previously emphasized the necessity and vital nature of air defense in terms of both deterrence and actual military capacity.

To avoid such situations and dependency, the armed forces commander should be appointed by the Riigikogu and not the government. Neither the current government nor its defense minister that have opted for the path of austerity are talking about air defense. Luckily, the coastal defense missile systems procurement has been retained.

Allow me to close with the words I shared with Minister of Defense Kalle Laanet in the Riigikogu: The Romans used to ask the question cui bono – to whom is it a benefit? – when trying to get to the bottom of certain processes, and I believe Gen. Ants Laaneots was right when he said that Russia's fifth column is behind the cuts plan.

I did not receive an answer from Laanet, but is there anyone besides Russia who would benefit from it? I hope the coalition will seriously ponder this question and abandon its incomprehensible austerity plan.

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Editor: Marcus Turovski

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