MINISTRY OF NATIONAL DEFENCEMINISTRY OF NATIONAL DEFENCEBUDGETARY DEPARTMENTBUDGETARY DEPARTMENT

ON THE ON THE MoND MoND BUDGET FOR 2010BUDGET FOR 2010

Warsaw, March 2010

BASIC INFORMATIONBASIC INFORMATION

INTRODUCTIONINTRODUCTION

This publication provides the basic information on the national budget, Polish defence expenditures and MoND budget.

To fulfill defence tasks and missions, Poland has allocated (according to the Budgetary Act) 25,719.0 million zlotys (MPLN) to defence expenditures. The 2010 defence expenditures ceiling has been established as defined in the act dated 25 May 2001 on restructuring, technical modernization and financing of the Polish Armed Forces (not less than 1.95% of the Gross Domestic Product of the previous year).

Within the mentioned amount – 25,448.3 MPLN has been allocated to Part 29 – National Defence, and 270.7 MPLN to the other parts of the state budget.

Defence expenditures in 2010 reflect positive trend of the Polish Armed Forces development, capital investment expenses are assumed to reach 22.5% of total MoND budget.

Irrespective of budget resources, MoND expects that process of the armed forces modernization will be strengthen by using of some off-budget resources (domestic and foreigner).

Basic macroeconomic indicators 2010

ExpendituExpendituresres

301301..2 2 BPLNBPLN

MoNDMoND Budget Budget

25.7 BPLN25.7 BPLN

MoNDMoND Budget Budget

25.7 BPLN25.7 BPLN

Gross Gross Domestic ProductDomestic Product– 1,322.3 – 1,322.3 BPLN BPLN

(year 2009)

Gross Gross Domestic ProductDomestic Product– 1,322.3 – 1,322.3 BPLN BPLN

(year 2009)

1.95% GDP1.95% GDP1.95% GDP1.95% GDP

National BudgetDeficit Deficit

52.2 52.2 BPLNBPLN

RevenuesRevenues249.0 249.0

BPLNBPLN

Average annual increase in:

consumer price index

101.0 %

Exchange Exchange ratesrates::

1 USD = 1 USD = 3.01 – 3.01 –

3.25 3.25 PLNPLN

1 EUR = 1 EUR = 4.07 – 4.07 –

4.38 4.38 PLNPLN

Other Other MinistrMinistr

iesies

0.3 BPLN

Other Other MinistrMinistr

iesies

0.3 BPLN

Ministry of Ministry of National National DefenceDefence

25.4 BPLN

Total defence expenditures in 2010 (the Budget Act year 2010 )

► DefenceDefence expenditures expenditures MPLNMPLN 25,719.025,719.0 (at least 1.95 % GDP 2009 – 1,322.3 BPLN)

Part 29 - „Part 29 - „National National DefenceDefence” ” MPLNMPLN 25,448.3 25,448.3 ((including: including: F-16 Program F-16 Program MPLN 198.3) MPLN 198.3)

Part 28 Science MPLN 154.0 (Research Projects)

Part 20 Economy MPLN 73.0(Mobilization of Economy Program)

Other (excluding MoND) MPLN 43.7 (Paramilitary Defence Program)

Defence expenditures of the other governmental institutions Defence expenditures of the other governmental institutions

MPLN 270.7

Additional financialAdditional financial resources resources in 2010 in 2010

► TOTALTOTAL MPLN 627.7MPLN 627.7► TOTALTOTAL MPLN 627.7MPLN 627.7

Domestic Domestic MPLN 213.2 MPLN 213.2 Armed Forces Modernisation Fund

MPLN 71.7

F-16 Program loan repayment MPLN 141.5

Foreign Foreign MPLN 414.5MPLN 414.5 NSIP (NATO Security Investment Program)

MPLN 266.4

FMF (Foreign Military Financing - US Program) ~ MPLN 141.5 (MUSD 47.0)

IMET (International Military Education And Training) ~ MPLN 6.6 (MUSD 2.2)

Defence prioritiesDefence priorities

Professionalization of the Polish Armed Forces;

Allied CRO’s, including: ISAF, NTM-I, KFOR,

EUFOR, AIR POLICING and ACTIVE

ENDEAVOUR;

Modernization of the Polish Armed Forces,

including operational and armament programs;

Implementation of the MoND IT strategy;

Preparation of the armed components declared to

NATO Response Forces and UE Battle Groups.

Structure of MoND budget Structure of MoND budget in in 2010 2010

Capital Capital Investment Investment

5,720.25,720.2

Other Other expendituresexpenditures

11,,674674..33

Expenses on Expenses on military and military and

civilian civilian personnelpersonnel

7,208.57,208.5

PensionsPensions

5,457.65,457.6

Other Other services services 764.4764.4

Subsidies 787.3

O&M O&M CostsCosts

3,836.03,836.0

21.4%21.4%21.4%21.4%

3.1%3.1%3.1%3.1%

3.0%3.0%3.0%3.0%

15.1%15.1%15.1%15.1%

6.6%6.6%6.6%6.6%

22.5%22.5%22.5%22.5%

28.3%28.3%28.3%28.3%

25,448.325,448.3MPLNMPLN

(MPLN)(MPLN)(MPLN)(MPLN)

Name of sectionName of sectionExpenditurExpenditur

es (the es (the BudgetBudgetary ary

Act)Act)

ShareShare

TOTAL BUDGET 25,448.3 100.0%

700

Housing 497.8 1.9%

710

Public services 0.9 0.004%

750

Public administration 244.4 1.0%

752

National defence 18,546.5 72.9%

753

Social security schemes 5,694.8 22.4%

755

Administration of justice 61.3 0.2%

803

Academic education 141.0 0.6%

851

Health care 224.9 0.9%

921

Culture 36.7 0.1%

Secti

on

Secti

on

Structure of MoND budget Structure of MoND budget in 2010 in 2010 (according to sections(according to sections))

(in MPLN)

ChaptChapterer

Detailed listDetailed list ExpendituresExpenditures (the (the

Budgetary Act)Budgetary Act)

ShareShare Share in Share in total budgettotal budget

75201 Army 2,730.843 14.72% 10.73%

75202 Air Forces 1,175.855 6.34% 4.62%

75203 Navy 459.861 2.48% 1.81%

75204 Central Support 6,117.339 32.99% 24.04 %

75207 Military Police 228.062 1.23% 0.90 %

75208 Roman Catholic Chaplaincy 20.530 0.11% 0.08 %

75209 Orthodox Chaplaincy 2.576 0.01% 0.01 %

75210 Evangelic Chaplaincy 1.655 0.01% 0.01 %

75213 Command and control of Armed Forces

935.019 5.04% 3.67 %

75215 Mobilization tasks of civilian enterprises

23.000 0.12% 0.09 %

75216 Crisis Response Operations 1,963.598 10.59% 7.72 %

75217 Military Intelligence Service 99.067 0.53% 0.39 %

75218 Military Counter-Intelligence Service

158.190 0.85% 0.62 %

75219 Special Forces 182.064 0.98% 0.72 %

75220 Army support 3,711.406 20.02% 14.58 %

75295 Other activities 737.483 3.98% 2.90 %

TOTALTOTAL 18,546.54818,546.548 100.0%100.0% 72.89%72.89%

Structure of section 752 Structure of section 752 „National „National defence” defence” in 2010 in 2010

PERSONNELPERSONNEL

Average salary (in thousand PLN): Soldiers – 3,961 Civilian personnel:

– civil servant corps – 3,141– other personnel – 2,604

Average salary (in thousand PLN): Soldiers – 3,961 Civilian personnel:

– civil servant corps – 3,141– other personnel – 2,604

MILITARY PERSONNEL

110,000

MILITARY PERSONNEL

110,000

MILITARY PERSONNELMILITARY PERSONNEL(Part 29 National (Part 29 National defencedefence))

REGULAR SOLDIERS

96,636

OVER-TERM VOLUNTEER

SERVICE

864

CADETS

2,500

NATIONAL RESERVE FORCES

10,000

MILITARY PERSONNELMILITARY PERSONNEL(Section 752 – National (Section 752 – National defencedefence))

43,704 43,704 soldierssoldiers

66,,402 402 soldierssoldiers

43,768 43,768 soldierssoldiers

16,12616,126 soldierssoldiers

110,000110,000

i.e. Central Support, Military Police, i.e. Central Support, Military Police, Command and control Command and control

14.7%14.7%

39.7%39.7%

5.8%5.8%

39.8%39.8%

PENSIONSPENSIONS

TOTAL – 5,457.6 MPLNTOTAL – 5,457.6 MPLN

PENSIONS

106,016PENSIONS

106,016

DISABILITY PENSIONS

17,364

DISABILITY PENSIONS

17,364

FAMILY PENSIONS

37,720

FAMILY PENSIONS

37,720

Number of Number of pensionerspensioners

161,100161,100

Number of Number of pensionerspensioners

161,100161,100

Increase of pensioner number

index

Increase of pensioner number

index

Valorization index

Valorization index

Average pensionAverage pension

100.72%100.72% 104.6%104.6% 2,713 PLN2,713 PLN

The Polish The Polish Armed Forces Armed Forces operationsoperations abroad abroad in in 20102010

2,600 soldiers

25 observers

27 sailors

20 soldiers

16 soldiers

K F O R

233 soldiers

212 soldiers

EUFOR

1,963.6 MPLN7.7% budget of MoND

1,963.6 MPLN7.7% budget of MoND

NTM-I IRAQNTM-I IRAQ

GEORGIAGEORGIA

AFGHANISTANAFGHANISTAN100 soldiers

AIR POLICING

ACTIVE ENDEAVOU

R

222 215

992

546

1835

0

200

400

600

800

1000

1200

1400

1600

1800

2000

POLANDPOLAND2009*2009*

USAUSA POLANDPOLAND2010*2010*

DEFENCE DEFENCE BUDGET IN BUDGET IN COMCOMPPARISON WITH NATO ARISON WITH NATO AVERAGE AVERAGE (per capita in USD(per capita in USD))

AVERAGEAVERAGENATONATO

Source: Based on NATO’s statistical tables 2009, * - data for Poland in 2009-2010 – Budgetary Department estimates

AVERAGEAVERAGEEUROPEANEUROPEAN

NATONATOCOUNTRIESCOUNTRIES

71,4 67,9

213,5

124,1

358,8

0

50

100

150

200

250

300

350

400

USA USA POLANDPOLAND2010*2010*

POLANDPOLAND2009*2009*

BUDGET IN COMPARISON BUDGET IN COMPARISON WITH NATO AVERAGE WITH NATO AVERAGE (per soldier in (per soldier in thousand USD)thousand USD)

AVERAGEAVERAGENATONATO

AVERAGEAVERAGEEUROPEANEUROPEAN

NATONATOCOUNTRIESCOUNTRIES

Source: Based on NATO’s statistical tables 2009, * - data for Poland in 2009-2010 – Budgetary Department estimates