Does major joint military procurement really work in the Baltics?

By: Aaron Mehta

WASHINGTON — On paper, the Baltic nations appear to have closely aligned defense modernization needs that make the joint procurement of advanced military equipment a no-brainer. After all, Latvia, Estonia and Lithuania have historically shared national interests, are currently facing a similar threat from Russia and each have relatively small defense budgets.

Joint procurement would drive down costs for large defense articles by allowing the smaller Baltic nations to buy in greater numbers. It would also allow the countries to share maintenance responsibilities, which would save money. And it would drive greater interoperability in countering an adversary's simultaneous attack all three nations.

But then there's the reality of the situation.

“I think there are many misperceptions on Baltic integration,” Janis Garisons, state secretary for the Latvian Ministry of Defence, told Defense News during a September visit to Washington. “I think this is a little bit of a wrong perception that there is a lot of added value in those common procurements.”

Garisons, the No. 2 civilian at the ministry, said he is not against joint procurement efforts, but believes such initiatives work best when purchase ammunition, small arms, or chemical, biological, radiological and nuclear defense equipment — purchases already in the works among the European neighbors.

But for major defense articles, the legal and logsitical challenges of coordinating a trilateral contract, combined with a lack of major savings, means it might not be worth it.

“We do common procurements when it's possible, but I have to say, I haven't seen much savings on those because even if you combine all three numbers, it's not like the U.S. buying together with the U.K. — thousands and thousands. It is still numbers that are very small,” Garisons said.

Lithuania's vice minister for defense, Giedrimas Jeglinskas, agrees that joint procurement of major defense articles may never be feasible among the three Baltic nations.

“Joint procurement, multinational procurement — I don't think it exists that much in the world,” Jeglinskas told Defense News during a visit to Washington in October. “Most of the programs out there are joint development. But when you talk about something like three-country procurement, it has been really hard for us to achieve.”

Like Garisons, Jeglinskas said smaller transactions have proven successful, specifically the joint procurement of mines with Estonia and gas masks with Latvia. But even then, “the syncing of the budgets and the procurement plans for each country [is difficult]. Say we are ready to buy gas masks this year, but the Estonians may buy them two years ahead. And that's just the small things.”

Kusti Salm, the director of the Estonian government's Centre for Defence Investment, told Defense News that joint procurement among the Baltic states is challenging given the need to sync up defense budget cycles, noting that “the amounts we procure are small and do not always bring us the economies of scale.”

While the idea of joint procurement is popular, there is a “genuine disconnect” between the idea and the reality, according to Chris Skaluba, a former Pentagon official who is now the director of the Atlantic Council's Transatlantic Security Initiative.

Skaluba points to two reasons for this: The first is that while the Baltic states are concerned about Russia, both Latvia and Estonia are more directly concerned with the threat of “little green men” — a reference to masked soldiers in green uniforms who led Russia-backed separatists in the beginning of the conflict in Ukraine. The concern steps from the high populations of ethnic Russians in Latvia and Estonia. In response, those two countries are focuses on homeland defense, whereas Lithuania is focused on resisting a direct Russian invasion — an approach that requires a different set of equipment.

Secondly, America's famously convoluted security cooperation process makes trilateral procurement from the Western ally tricky. Small purchases of ammunition or night vision goggles are doable, but the more advanced the gear, the higher the costs and the stricter the regulations. Throw in three separate national budget cycles and the process “can be daunting and just not worth the squeeze when you're through with all that work,” Skaluba said.

“Do I think all sides could be more determined and find creative ways to do this? I do. I think maybe something that is technically difficult but not super expensive, like unmanned aerial vehicles, would be a good test case,” Skaluba said. “But I'm also sympathetic that because of how regulations work, the congressional requirements, having to work through [the U.S. Department of] State and the Pentagon, any major purchase is difficult. Trying to do that times three is three times as hard.”

National priorities

The question of maintenance is another issue for joint procurement in Garisons' eyes. The idea of having shared maintenance facilities spread across the area — for example, one tank depot in Lithuania and one helicopter depot in Estonia to service all three Baltic nations — creates vulnerabilities during an invasion, he said.

“I would be very cautious assuming that we will be able to freely import, to bring everything, all supplies needed. Our goal is to ensure that all the basic things, like small arms, ammunition, the maintenance of vehicles, the maintenance of major equipment — that can be done locally,” he said. “For operational reasons we can't have shared maintenance because during wartime we will not be able to bring vehicles, for example, to any other state.

“It complicates common procurements because it is not so easy to agree on joint procurements, where the maintenance base will be held and other issues. For us, I think of paramount importance to have a maintenance base.”

Ultimately, Latvian officials and their regional counterparts are making informed decisions about their respective country's security, Skaluba said.

“These are all really serious governments. They really feel a threat. They know precisely how they think this would work in a crisis situation and what they need to have available to them,” he said. “At a strategic level, of course it [joint procurement] makes sense, but if you're a politician or defense planner or minister of defense, your first responsibility is to defend your country. And of course you want to make sure you have resources available to you.”

While skeptical of joint procurement efforts, Garisons was supportive of joint education and training across the region, calling Baltic military cooperation “as strong as any you can find.” He noted that the three nations share a high-level military education center, the Baltic Defence College in Tartu, Estonia.

Estonia's Salm considers interoperability among the Baltic states critical to successful joint procurement efforts. “Defense in Estonia cannot be separated from defense in Latvia and Lithuania, as we form a single region from the military point of view,” he said.

One example of that raised by both Salm and Garisons is the creation of NATO's Multinational Division North, a headquarters operation organized by Latvia, Estonia and Denmark. Garisons called it “the first attempt when we will have joint command structure, which will be able also to feed into the NATO command structure.” The command-and-control aspect of joint operations is vital, he added.

A pair of major exercises in Latvia toward the end of the year will serve as test beds for the NATO division, which is expected to reach initial operational capability in early 2020.

https://www.defensenews.com/global/europe/2019/10/28/does-major-joint-military-procurement-really-work-in-the-baltics/