Bulgaria - Military Budget
The global financial and economic crisis turned out to have its greatest impact on the second half of 2009 and 2010. Naturally, it was unavoidable for this fact to affect the state of Defence and the Armed Forces. The sum of the Ministry’s massive obligations, by previous governments, to foreign and Bulgarian companies for the production and/or delivery of armaments, technology and services; a standardised practice of negating the principles of good governance and transparency; the undermining of establilshed methods of planning; the admittance of serious violations of budgetary procedure in the past years; and the unprecedented initial decrease in the relative share of the Gross Domestic Product (GDP) for defence – these issues could not but put the Ministry of Defence and the Armed Forces in an exceptionally strenuous situation.
In comparison with NATO allies, Bulgaria maintained one of the most expensive defence systems, which burdened the economic and demographic realities we have to face. Recalculated in purchasing power standards, the defence costs to the Bulgarian taxpayer put Bulgarian soldier among the most expensive. However, in real terms, he is among the most poorly resourced and insured.
Bulgaria traditionally spent less on defense than other Warsaw Pact countries, but military spending was a greater burden on its economy than on those of its allies. During the late 1980s, the military budget amounted to more than 10 percent of the gross national product because Bulgaria had the lowest GNP in the Warsaw Pact. Measured in terms of total government spending, the military budget typically accounted for more than 20 percent of the national budget. In contrast, BPA leaders complained that by 1990 defense spending had dropped to about 6 percent of state expenditures, a smaller proportion than that spent by the governments of Greece or Turkey.
Between 1986 and 1989, the military budget increased gradually from 1.67 to 1.8 billion leva. In January 1989, however, the State Council and the Council of Ministers reduced the appropriated defense budget for 1989 by 12 percent to 1.6 billion leva. The announcement cited restructuring in the armed forces and economic considerations as reasons for the reduction. The Ministry of National Defense stated its intention to absorb the cut by reducing expenditures on operations, maintenance, and procurement, which were the largest components of the military budget.
By 2005 the Ministry of Defence was characterized by spending of considerable financial resources for defence which constituted an exceptionally serious burden on the national budget, especially under the conditions of financial and economic crises when the expenses for social assistance, health and education are given a high priority. Apart from the above, there was a paradox that the expenses with which Bulgarian taxpayers were burdened, recalculated with a view to the purchasing capacity of the population, proved that the Bulgarian soldier was one of the most expensive ones among our Allies in NATO.
Simultaneously, with regard to the absolute value, the Bulgarian soldier was one of the most poorly provided with resources. All this was a proof of the totally non-transparent and ineffective spending of the defence budget where resources were literally wasted in totally unnecessary and artificially exaggerated segments while at the same time the level of building capabilities was deplorable.
With the goal to immediately change this situation, the government conducted a Force Structure Review accompanied by fixing prices to the capabilities; they were prioritized and divided into the following types of capabilities: necessary, existing, unavailable capabilities and capabilities that are no longer necessary. On the basis of this analysis, the Ministry of Defense built a model which made it possible for us to achieve a balance between the planned capabilities and the available resources.
The basic goal was to improve the programmed defence planning and budgeting on the basis of the necessary defence capabilities as this process is conducted with maximal transparency by preparing periodically a progress report on the results of the implementation of the programs, and by providing this report to the National Assembly and to the Bulgarian public.
The Ministry achieved complete coordination and transparency between the activities related to the preparation of six-year defence programs (medium term planning), the formation and execution of the budget of the Ministry of Defence for the specific budget year on the basis of the defence capabilities and the preparation of the Unified Financial Plan (UFP) for materiel and technical provision, which serves as a base for conducting the acquisition of defence capabilities.
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