A look at how the Alliance handles its resources

Video Interview with Mr. Alvaro Pino Salas, Chairman of the NATO Senior Resource Board

I understand that the work of the Chairman of the Senior Resource Board is far-reaching. How has your background prepared you for this role?

Perhaps a good place to start.  I combine both, a military background and another on economics and business administration. Since I graduated in the Spanish Air Force Academy in 1979 I have been working on defence resource matters at national and international level, both at home in Spain and abroad. I became Chairman SRB on 1st September last year but I should mention that this is my third NATO assignment

What about the complexity of your job?

Clearly, any top position in NATO is demanding. As an international organization the Alliance has its own working methods and procedures.  These are in many cases very detailed and specific, and they require one to be very familiar with them.  In addition, in NATO, for each work area or discipline, and here I am specifically referring to resources, there are many players.  All these people have roles and expectations which have to be integrated and coordinated properly.

This all sounds a little complicated for the layman?

I would add two important points.  First, when you consider resources, you must remember that they are a critical dimension in NATO’s ability to conduct operations and fulfil its mission.  Also, remember that all decisions in NATO are made by consensus among the 26 Allies.  Now you have an idea of how complex the work is in the community which I lead.

You left NATO HQ in August 2004 and last September came back in your current position. May I ask what your first impressions are now that you have been in the post some 6 months?

In short, my first impressions are positive. Why?  Well, much has changed since I left here in 2004. At that time, NATO had started getting involved in Afghanistan. Now the expansion of NATO’s mission there is a reality and it has had a big impact on the resource area.  This has been not only in the amount of resources having to be allocated, but also in the context of revising funding principles and practices.  One of our principal aims is to ensure that we can respond rapidly and effectively in a very demanding environment.  During these six months I have realised that a lot has been achieved but also that there are still plenty of challenges ahead of us.

And what other changes have there been?

Another important change concerns NATO Resource Reform. You may have heard that this was approved last spring by the the North Atlantic Council.  On a personal note it was a project in which I participated as external advisor of SECGEN.  You may want to come back to this matter later.  But at this stage, I would only say that this reform has resulted in new staff arrangements and Terms of Reference for the Resource Committees.  These changes have, in a significant way, made my job somewhat different from that of my predecessor’s.

Going to the core of your business, what does the Senior Resource Board do?

The North Atlantic Council has given the Senior Resource Board a lead policy, planning and advising role in all military common-funded resource areas.

In providing advice to the NAC, the main mission of the Senior Resource Board is to ensure that the NATO Military Authorities can count on the common funded resources they need to fulfil the mission.  At the same time we have an interest in ensuring that those resources are used in the most cost-effective way.  All this work involves resource disciplines such policy, planning, allocation, management and performance control.

Among others, the SRB advises the NAC on the resource implications of new initiatives, operations and missions; recommends to the NAC/DPC, each year, in a medium term resource plan, the budget ceilings and the planning figures for the coming years.

Another important role of the SRB is the screening and endorsing, for NAC/DPC approval, of Capability Packages in terms of their feasibility, eligibility for common funding and affordability, addressing both national and international resource implications and political aspects.

What is NATO common funding and how does it work?

This is a question which is really quite difficult to answer briefly.

The first, an obvious point to make, is that the defence of a sovereign nation is primarily a matter for itself. It follows that each nation is responsible for resourcing its own defence in terms of money, material and manpower.

For collective defence, that is NATO, military manpower and material are assigned to the Alliance by member countries, which however remain financially responsible for their provision.

Turning then to common funding, as a general principle, albeit simplified, it can be said that within the Alliance, NATO common funding pays for those aspects of collective defence that are - and here is that phrase again - 'over and above' that which a nation should be reasonably be expected to pay for its own defence.  All that is something of a mouthful but I think that it gets everything in one sentence.

Can you be a little more specific on what is 'over and above', with some examples?

Well, according with the 'over and above' principle which I have just outlined, NATO common funding is devoted essentially to establishing, operating and maintaining those structures, facilities and systems which constitute the backbone of NATO military capacity, and allow the military contributions from the nations to operate together. Thus, common funding largely pays for this HQ, SHAPE, HQ Allied Command Transformation at Norfolk in the US and other similar elements of the command structure.   It also supports key-enablers capabilities that contribute critically to NATO ability to fulfil its mission, mainly during operations.  I think that it has been said that common funding is the glue that makes the different parts of the Alliance fit together.

In short, therefore, currently the main areas of common funding are the NATO Command Structure, Air Defence, Command, control and communications, Alliance Operations and Missions and Deployablility.

But what is all this costing?

We are talking about sums in the region of one and a half billion Euros per year total.  But I must also make the point that, when comparing with the total defence expenditures of NATO countries, the NATO commonly funded budgets and programmes are very small.  However it has a critical and very significant impact on NATO’s ability to perform.  And this impact is disproportionately large for the sum of money spent.

You have mentioned that in any NATO work area there are many players interacting. Who are the key players when it comes to NATO common budgets and programmes?

First, these are funds largely for the military dimension of NATO and are allocated to the NATO Security Investment Programme and to the NATO International Military Budget.  So, first and most important, the Strategic Commanders have the role of establishing what is the military requirement - what do we need to do the job.  This requirement is then validated by the Military Committee and the Senior Resource Board before it is recommended for approval by the Council.

On implementation, the detailed screening and control of the requirements accepted for funding is a responsibility of the implementing committees: the Infrastructure and Military Budget Committees.  They, in turn, receive guidance from the SRB and report to it.

All the NATO nations are represented at the SRB, IC and MBC and also the MC and the SCs. The NATO Office of Resources, a part of the International Staff, provides support to the three resource committees and their Chairmen.

Finally, in addition to my role of Chairman of Senior Resource Board, I am also the main and senior resource advisor to the NAC and to the Secretary General.  On behalf of the Board, his Chairman has a mandate to lead and over see all NATO Military Common-funded resource activity.

What are the current priorities for NATO common funding

As I have mentioned before, the allocation and use of NATO common funded resources must be conducted according to NATO objectives and priorities. One of the main tasks of the SRB and of the two implementing committees and, indeed of the Military Committee, is to make sure that this happens.

As I think is well known, in the current environment NATO highest priority is operations and missions. Continued support to ongoing and planned NATO operations and missions is one of the major areas of interest of NATO common funding, our security operation in Afghanistan being particularly demanding.  In the same vein, resourcing capabilities to support the actual deployability of NATO forces is another priority area.

We hear much of 'Transformation'.  What is this and what impact does it have in the context of common funding?

Essentially, Alliance transformation is aimed at ensuring that we are better able to respond to current and future challenges.  In this context, special attention is being given to the early development and implementation of capabilities in support of multinational joint expeditionary operations. It also addresses capabilities to better ensure interoperability.

Within this transformation effort, common funding is intended to contribute to resourcing capabilities such as intelligence, surveillance and reconnaissance, Alliance Ground Surveillance, defence against terrorism and protection of information systems among others. Most of these new capabilities require national, multinational and joint funding; however, common funding will contribute to foster integration and interoperability.

In your view what are the current and future challenges for NATO common funded resources?

Resourcing CROs, mainly the Afghanistan operation, is the biggest challenge for the Alliance as a whole.  From the funding policy side, the SRB continues analysing whether common funding could contribute to better generating the forces and capabilities required in the operations theatre and to better sharing of the burden among all the Allies. From the resource planning and allocation perspectives, ISAF is consuming more and more resources and is by far the main driver in terms of annual budget increases.

Resourcing the capabilities needed for the Alliance’s other current tasks and missions is another big challenge for the Alliance. Most of the responsibility lies in the individual nations but common funding has also a significant role to play, as I have mentioned before.

Returning to your earlier comments about NATO Reform, how is it changing and improving matters in the resource arena?

Through NATO Resource Reform, a number of measures have been put in place aimed at bringing about better integration of resource management and effort.  I have already mentioned the establishment of the Senior Resource Board as the lead body, and the role of its chairman as the senior resource adviser to the NAC and to the Secretary General. This is accompanied by a realignment of the terms of reference of the implementing committees, the Military Budget Committee and Infrastructure Committee and complemented by the establishment of the NATO Office of Resources. This Office consolidates and re-aligns support from the International Staff to the resource committees and their chairmen in a more balanced and open manner.

As I have mentioned, this whole exercise intended to put in place a more integrated and coordinated approach to resource management at NATO HQ, which I think is crucial at a time when the resource community has to face a very dynamic change in terms of requirements and priorities.

The Resource Reform is still in implementation phase but I would say that its positive effects are already being realised.