Less defence equipment and smaller organisation for the money


  • Peter Nordlund
  • Erik Lundberg
  • Bernt Öström

Publish date: 2016-04-14

Report number: FOI-R--4250--SE

Pages: 52

Written in: Swedish


  • armaments
  • armed forces
  • defence spending
  • operational organization
  • defence price index
  • investment
  • depreciation
  • balance sheet
  • income statement.


This report is produced by the defence economy sub-project within the project SMI. SMI is part of the support that FOI provides to military strategic planning in the Swedish Armed Forces. The client is the Swedish Armed Forces Headquarters (HQ). The report combines focus on methodology and results. The method part is based on a theoretical model developed in the operations analysis activities of FOI at HQ. The model attempts to explain how the Armed Forces' stock of armaments, developed over time. In this study we have applied the theoretical model in order to investigate the development of the Armed Forces' stock of armaments 1999-2014. The analysis points to a gradual reduction of the Armed Forces stock since 1999. Assuming that the defence sector has a more rapid price increase that exceeds the general price trend, measured by the consumer price index (CPI), the decrease of armament has been significant. Thus, it is virtually impossible to maintain a constant level of the armament stock and the size of the operational organization if the funding in real terms only grows in line with general inflation. As we have previously shown, the development of unit costs of defence supplies have been and are likely to continue to exceed general price trends. An unchanged organizational size can only be achieved if the defence budget is raised as these cost increases. Unless such funding increases and / or changes in the "defence price index" (FPI) is the intent of policy-makers, the Armed Forces should in its long-term planning consider alternatives with reduced volumes and a decreased operational organization, as a starting point. This option appears in the light of history as the most realistic.