NATO Enlargement: U.S. and International Efforts to Assist Potential New
Members (Letter Report, 06/01/97, GAO/NSIAD-97-164).

Pursuant to a congressional request, GAO reviewed how: (1) the North
Atlantic Treaty Organization's (NATO) Partnership for Peace (PFP)
program is helping aspiring members prepare for possible NATO
membership; (2) U.S. assistance efforts are helping aspiring partner
countries to prepare for possible NATO membership; (3) other NATO
members' efforts are being coordinated with NATO and U.S. efforts; and
(4) aspiring countries are preparing themselves for possible NATO
membership. In addressing these objectives, GAO focused on efforts aimed
at improving partners' ability to work militarily with NATO, but did not
evaluate prospective members' political and economic efforts to prepare
for membership.

GAO noted that: (1) NATO, the United States, and other NATO members are
assisting prospective new members in areas relevant to NATO's principles
for expansion; (2) GAO's analysis indicates the assistance provided
under these programs is generally consistent with prospective members'
needs, as those needs were identified to GAO by NATO, U.S., and
prospective member officials; (3) through exercises, symposia, training,
and other activities, NATO's $26.2 million PFP program is helping
partner countries begin to improve their ability to work more closely
with NATO in PFP-related activities; (4) the six countries that GAO
reviewed are using PFP primarily to take part in hundreds of
NATO-sponsored exercises, training sessions, communications efforts, and
other activities; (5) these events are limited to peacekeeping, search
and rescue, and similar missions; (6) while U.S. and NATO officials
cannot quantitatively measure the extent to which such events would
enhance a future member's ability to work closely with other NATO
members on the full range of NATO activities, they believe that the
events are improving the ability of partner forces to interoperate with
NATO; (7) U.S. bilateral assistance efforts generally complement NATO's
PFP program, fall within areas of cooperation designated by NATO and its
PFP partners, and reflect an emphasis on helping PFP forces work with
NATO forces; (8) while it has programmed $308.6 million in fiscal year
1995 to 1997 funds for such assistance to 23 PFP partners, the United
States has focused 46 percent of this amount on efforts involving
Poland, the Czech Republic, Hungary, Romania, Slovakia, and Slovenia;
(9) about 60 percent of these funds for the six countries is for the
purchase of nonlethal military hardware; (10) other NATO members are
also assisting PFP partners, although GAO could not determine the
overall value of such aid; (11) while NATO seeks to improve its
mechanism for coordinating members' assistance efforts, the United
States and other major donors are attempting to coordinate directly with
one another by exchanging detailed information among themselves; (12)
also, NATO's military command has set up a database of PFP and bilateral
events; (13) each of the six countries that GAO reviewed has formally
informed NATO of its interest in joining NATO and has identified various
steps it believes are needed to address NATO's expectations for new mem*

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-97-164
     TITLE:  NATO Enlargement: U.S. and International Efforts to Assist 
             Potential New Members
      DATE:  06/01/97
   SUBJECT:  International organizations
             NATO standardization
             NATO military forces
             Military interoperability agreements
             Foreign military assistance
             International cooperation
             Foreign governments
IDENTIFIER:  NATO Partnership for Peace Program
             Czech Federal Republic
             Hungary
             Poland
             Romania
             Slovak Federal Republic
             Slovenia
             Bosnia
             DOD Warsaw Initiative
             International Military Education and Training Program
             JCS Joint Contact Team Program
             DOD European Regional Airspace Initiative
             DOD Warsaw Initiative Defense Resources Management Studies 
             Project
             DOD Foreign Military Financing Program
             Germany
             Denmark
             Netherlands
             United Kingdom
             France
             Canada
             
**************************************************************************
* This file contains an ASCII representation of the text of a GAO        *
* report.  Delineations within the text indicating chapter titles,       *
* headings, and bullets are preserved.  Major divisions and subdivisions *
* of the text, such as Chapters, Sections, and Appendixes, are           *
* identified by double and single lines.  The numbers on the right end   *
* of these lines indicate the position of each of the subsections in the *
* document outline.  These numbers do NOT correspond with the page       *
* numbers of the printed product.                                        *
*                                                                        *
* No attempt has been made to display graphic images, although figure    *
* captions are reproduced. Tables are included, but may not resemble     *
* those in the printed version.                                          *
*                                                                        *
* A printed copy of this report may be obtained from the GAO Document    *
* Distribution Facility by calling (202) 512-6000, by faxing your        *
* request to (301) 258-4066, or by writing to P.O. Box 6015,             *
* Gaithersburg, MD 20884-6015. We are unable to accept electronic orders *
* for printed documents at this time.                                    *
**************************************************************************


Cover
================================================================ COVER


Report to the Chairman, Committee on International Relations, House
of Representatives

June 1997

NATO ENLARGEMENT - U.S.  AND
INTERNATIONAL EFFORTS TO ASSIST
POTENTIAL NEW MEMBERS

GAO/NSIAD-97-164

NATO Expansion

(711239)


Abbreviations
=============================================================== ABBREV

  DOD - Department of Defense
  FMF - Foreign Military Financing
  FYROM - Former Yugoslav Republic of Macedonia
  JCT - Joint Contact Team
  IMET - International Military Education and Training
  NATO - North Atlantic Treaty Organization
  PFP - Partnership for Peace
  SHAPE - Supreme Headquarters Allied Powers in Europe

Letter
=============================================================== LETTER


B-277053

June 27, 1997

The Honorable Benjamin Gilman
Chairman, Committee on International Relations
House of Representatives

Dear Mr.  Chairman: 

Since the 1991 dissolution of the Soviet Union, the North Atlantic
Treaty Organization (NATO) and its members have worked to promote
democracy, economic growth, and military cooperation with Central and
East European nations.  Under its founding treaty, NATO may invite
other European states to become members--if they can further NATO's
principles and the enhancement of security throughout the North
Atlantic area.\1 To advance its goal of enhancing security and
stability in this area, NATO plans to extend invitations to one or
more Central and Eastern European states at its July 1997 summit in
Madrid, Spain. 

While NATO does not have a formal program dedicated to preparing
nations for membership, in 1994 it launched a wide-ranging
cooperative effort--known as the Partnership for Peace (PFP)--with
nonmember countries to promote democracy, expand cooperation, and
strengthen relationships between NATO and nonmember countries.  NATO
has stated that the participation of countries in PFP will play a
role in its decisions regarding expansion.  The United States and
other NATO members have also initiated bilateral programs to help PFP
partner nations. 

Although not all PFP partners now aspire to be NATO members, you
asked us to examine how NATO and U.S.  assistance programs are
helping those that do wish to join.  Our specific objectives were to
determine how (1) NATO's PFP program is helping aspiring members
prepare for possible NATO membership, (2) U.S.  assistance efforts
are helping aspiring partner countries to prepare for possible NATO
membership, (3) other NATO members' efforts are being coordinated
with NATO and U.S.  efforts, and (4) aspiring countries are preparing
themselves for possible NATO membership.  In addressing these
objectives, we focused on efforts aimed at improving partners'
ability to work militarily with NATO.  We did not evaluate
prospective members' political and economic efforts to prepare for
membership.  As agreed with your office, we focused on the Czech
Republic, Hungary, Poland, Romania, Slovakia, and Slovenia. 

You also asked us to address several issues concerning estimates of
the cost of expanding NATO.  As agreed with your office and that of
the Ranking Minority Member of the Committee, we will review the
executive branch's estimate of the cost of expanding NATO in a
separate report. 


--------------------
\1 Twelve nations initially signed the NATO treaty in 1949.  NATO has
since expanded three times to its current 16-nation membership of
Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Italy,
Luxembourg, the Netherlands, Norway, Portugal, Spain, Turkey, the
United Kingdom, and the United States. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

NATO, the United States, and other NATO members are assisting
prospective new members in areas relevant to NATO's principles for
expansion (e.g., promoting civilian control over the military, civil
and military cooperation, and interoperability with NATO).  Our
analysis indicates the assistance provided under these programs is
generally consistent with prospective members' needs, as those needs
were identified to us by NATO, U.S., and prospective member
officials. 

Through exercises, symposia, training, and other activities, NATO's
$26.2 million PFP program is helping partner countries begin to
improve their ability to work more closely with NATO in PFP-related
activities.  The six countries that we reviewed are using PFP
primarily to take part in hundreds of NATO-sponsored exercises,
training sessions, communications efforts, and other activities. 
These events are limited to peacekeeping, search and rescue, and
similar missions.  While U.S.  and NATO officials cannot
quantitatively measure the extent to which such events would enhance
a future member's ability to work closely with other NATO members on
the full range of NATO activities, they believe that the events are
improving the ability of partner forces to interoperate with NATO. 

U.S.  bilateral assistance efforts generally complement NATO's PFP
program.  They fall within areas of cooperation designated by NATO
and its PFP partners and reflect an emphasis on helping PFP forces
work with NATO forces.\2 U.S.  programs include providing training in
English, providing data on U.S.  defense programming and budgeting
practices, undertaking studies and paying for equipment to improve
air traffic control systems and tactical communication, and providing
support for partners' participation in U.S.  and NATO exercises. 
While it has programmed $308.6 million in fiscal year 1995-97 funds
for such assistance to 23 PFP partners, the United States has focused
46 percent ($142.7 million) of this amount on efforts involving
Poland, the Czech Republic, Hungary, Romania, Slovakia, and
Slovenia.\3 About 60 percent of these funds for the six countries is
for the purchase of nonlethal military hardware, such as air traffic
control equipment. 

Other NATO members--including Germany, Canada, the United Kingdom,
France, and Denmark--are also assisting PFP partners, although we
could not determine the overall value of such aid.  While NATO seeks
to improve its mechanism for coordinating members' assistance
efforts, the United States and other major donors are attempting to
coordinate directly with one another by exchanging detailed
information among themselves.  Also, NATO's military command has set
up a database on PFP and bilateral events. 

Each of the six countries that we reviewed has formally informed NATO
of its interest in joining NATO and has identified various steps it
believes are needed to address NATO's expectations for new members. 
Each is actively involved in PFP.  All are participating in the
NATO-led peacekeeping operation in Bosnia.  Some are seeking to meet
NATO interoperability standards, develop new arrangements with
neighbors, and streamline their militaries. 


--------------------
\2 See appendix I for a list of 18 designated areas of cooperation. 

\3 The Department of Defense (DOD) plans to spend additional fiscal
year 1997 funds in these six countries, but has not yet determined
how much. 


   BACKGROUND
------------------------------------------------------------ Letter :2

In 1994, NATO stated that it would invite other European countries to
join the alliance.  Twelve Central and Eastern European nations
expressed interest in doing so\4 and have taken part in so-called
"intensified dialogues" with NATO to help them learn more about
NATO's requirements.  Although NATO has no formal program to prepare
such nations for NATO membership, it has taken steps to strengthen
certain non-NATO members' relationships with NATO. 

These steps include the PFP program, which NATO initiated in 1994. 
Twenty-seven non-NATO members now participate in PFP (see fig.  1). 
PFP objectives include fostering democratization in partners' defense
establishments; encouraging joint planning, training, and military
exercises with NATO forces; promoting the ability of partner nations
to operate with NATO forces in humanitarian relief, search and
rescue, peacekeeping, and other agreed-upon missions; and developing
forces that are better able to operate with NATO forces.  To
implement the program, NATO and each PFP partner develop a plan that
depicts NATO-proposed exercises and other PFP-related activities of
interest to the partner and lists the partner's military and other
assets that might be used for PFP activities.  NATO expects partners
to fund their participation.  NATO views partners' level of
participation in PFP activities as an important indicator of their
interest in joining NATO and, according to DOD officials, has
structured PFP as one means of helping partners become better
integrated with NATO members. 



   Figure 1:  Eurasian NATO
   Members and PFP Partners

   (See figure in printed
   edition.)



   (See figure in printed
   edition.)

In July 1994, the U.S.  President announced the Warsaw Initiative, a
U.S.  bilateral program designed to (1) facilitate the participation
of partner states in exercises and interoperability programs, (2)
promote interoperability with NATO, (3) support efforts to increase
defense and military cooperation with PFP partners, and (4) develop
strong candidates for NATO membership.  The Departments of State and
Defense jointly fund and administer the initiative.  The Department
of State funds equipment transfers and training, while DOD supports
partners' participation in joint exercises and NATO-PFP
interoperability projects.  Also, the Department of State and DOD
provide training and advice through the International Military
Education and Training (IMET) program and the Joint Contact Team
(JCT) program and donate excess defense articles. 

The Department of State and DOD agencies programmed about $308.6
million in fiscal year 1995-97 funds to support these efforts in 23
PFP partner states.  The Department of State's programs are funded
through the 150 international affairs budget function and account for
about 48 percent of these funds.  The DOD programs are funded through
the 050 national defense budget function and account for about 52
percent of the funds. 

To facilitate NATO expansion, the President and Congress enacted the
NATO Participation Act of 1994 and the NATO Enlargement Facilitation
Act of 1996, which authorized the President to establish security
assistance programs for Poland, Hungary, the Czech Republic,
Slovenia, and any other countries the President believes have made
progress in achieving PFP goals.  The fiscal year 1997 Foreign
Operations Appropriations Act also earmarked $30 million for foreign
military financing grants for the Czech Republic, Hungary, and Poland
and allocated $20 million\5 to subsidize lending up to $242.5 million
for purchases of U.S.  defense articles, services, and training by
these three countries. 


--------------------
\4 Albania, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia,
Lithuania, the Former Yugoslav Republic of Macedonia (FYROM), Poland,
Romania, Slovakia, and Slovenia. 

\5 These funds serve as a subsidy that has been set aside to cover
the potential cost to the U.S.  government in the event that the loan
recipients default.  The Federal Credit Reform Act of 1990 required
U.S.  agencies to estimate and budget for the long-term costs of a
loan or guarantee in the year authorized.  See our report entitled
Credit Reform:  U.S.  Needs Better Method for Estimating Cost of
Foreign Loans and Guarantees (GAO/NSIAD/GGD-95-31, Dec.  1994). 


   NATO'S PFP PROGRAM HELPS
   PARTNERS PREPARE FOR MEMBERSHIP
------------------------------------------------------------ Letter :3

The Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia
are extensively involved in NATO's PFP program.  NATO, U.S., and
partner officials agree that PFP is improving the ability of
potential new members and other PFP partners to work with NATO in key
areas but they cannot quantifiably measure the extent to which it
will improve such abilities across the full range of NATO activities. 


      NEEDS OF PFP PARTNER STATES
---------------------------------------------------------- Letter :3.1

PFP partners need to improve their ability to work closely with NATO
in numerous areas, according to U.S., NATO, and partner officials. 
These areas include (1) cultivating a larger cadre of officers fluent
in NATO's languages, (2) training officers in NATO practices and
acquiring a greater and more detailed understanding of NATO standards
and procedures, (3) developing civilian expertise in and control over
defense matters (e.g., defense programming and budgeting), (4)
promoting the use of interoperable command and control systems, and
(5) establishing modern airspace management systems.  Some partner
nation officials told us that they will modernize their armed forces
regardless of whether they join NATO. 


      PARTNERS' INVOLVEMENT IN THE
      PFP PROGRAM
---------------------------------------------------------- Letter :3.2

Each of the six nations has taken or plans to take part in numerous
NATO-sponsored PFP events.\6 According to Supreme Headquarters Allied
Powers in Europe (SHAPE) and U.S.  officials, these events were
partially shaped by more than 40 PFP interoperability objectives
developed by NATO military commands (see app.  II). 

As shown in figure II, about 64 percent of the NATO activities in
which the six nations are participating involve joint exercises,
training, standardization and interoperability, communications, and
civil emergency planning.  Examples of such activities include
exercises on naval peacekeeping in hostile environments, staff
studies on the practicalities of conducting out-of-area multinational
peacekeeping air operations, staff meetings on tactical
communications interoperability, seminars on command and control
systems, training in NATO operational terminology, search and rescue
and explosive ordinance disposition working parties, and discussions
of NATO reconnaissance and surveillance procedures related to
peacekeeping.  The remaining 36 percent of the activities involve 13
other PFP cooperation areas. 

   Figure II:  Major NATO PFP
   Areas Participated in by the
   Czech Republic, Hungary,
   Poland, Romania, Slovakia, and
   Slovenia

   (See figure in printed
   edition.)

NATO has also offered partners the opportunity to take part in a
planning and review process aimed at helping them meet NATO's PFP
interoperability standards.  Seventeen partners--including the six
countries we reviewed--have agreed to do so.  NATO has recently set
milestones for their compliance with its objectives and released most
of its unclassified standardization agreements and publications. 


--------------------
\6 The Czech Republic, Hungary, Poland, Romania, Slovakia, and
Slovenia had participated or were scheduled to participate in 129,
169, 197, 297, 156, and 190 NATO events, respectively.  NATO
officials were unable to provide us with a country-by-country
breakdown of the $26.2 million budgeted by NATO for PFP activities
during fiscal years 1995-97. 


      PFP'S IMPACT
---------------------------------------------------------- Letter :3.3

NATO, U.S., and partner officials in the Czech Republic, Hungary, and
Poland expressed positive views regarding the PFP program.  NATO
officials asserted that PFP has become a permanent part of the
European security architecture, resulted in closer political
consultations among partners, and improved the ability of partners to
work with NATO on peacekeeping missions.  Partner nation officials
indicated that PFP has helped expose them to NATO methods and
practices. 

However, according to NATO and U.S.  officials, the extent to which
PFP has helped prepare aspiring members for full participation in
NATO (1) cannot be measured in quantifiable terms and (2) is limited
by the scope of the program.  PFP's scope does not include preparing
partners for the major war-fighting tasks that NATO's collective
defense responsibilities might require.  Therefore, according to NATO
officials, PFP interoperability goals do not cover the full range of
interoperability objectives that NATO has established for its members
and a partner's achievement of PFP interoperability objectives would
not necessarily be an indicator of how well that partner would
perform in collective security activities. 

Current uncertainties regarding the forces and missions that will be
required of the nations invited to join NATO\7 --and the time frames
for achieving future interoperability goals for new NATO
members--further complicate the task of assessing PFP's impact on
future NATO members.  Some partner nation officials told us that they
would like to have more specific data from NATO to guide their future
interoperability efforts. 


--------------------
\7 According to DOD officials, NATO plans to finalize target force
goals for new members in 1998. 


   U.S.  PROGRAMS SUPPORT NATO PFP
   EFFORTS
------------------------------------------------------------ Letter :4

The United States has focused its Warsaw Initiative and other U.S. 
assistance programs heavily on the six countries that we reviewed. 
These efforts generally address areas of interest to NATO--including
air traffic control, defense planning and budgeting, and English
language training. 

The executive branch programmed about $308.6 million for fiscal years
1995-97 for Warsaw Initiative efforts and other related bilateral
assistance programs.  It has directed about 46 percent ($142.7
million) of these funds to the six countries that we reviewed.  These
six countries received about 71 percent of all foreign military
financing (FMF) funds provided to PFP partners and about 44 percent
of the IMET training funds provided to PFP partners.  Figure III
depicts the allocation of fiscal year 1995-97 U.S.  Warsaw
Initiative, IMET, and JCT funds by the six countries and the other
PFP partner recipients. 

   Figure III:  U.S.  Warsaw
   Initiative and Other Aid
   Provided by Country

   (See figure in printed
   edition.)

Table I presents the allocation of U.S.  funds in the six countries,
by program. 



                                     Table 1
                     
                        U.S. Warsaw Initiative and Related
                       Assistance to Six Countries (fiscal
                                  years 1995-97)

                              (Dollars in thousands)

PFP         DOD programs
partner    and exercises     State FMF       DOD JCT    State IMET         Total
---------  -------------  ------------  ------------  ------------  ============
Czech             $6,461       $17,400        $1,392        $2,095       $27,348
 Republic
Hungary            6,548        12,700         1,841         2,830       $23,919
Poland             9,050        29,475         1,765         2,768       $43,058
Romania            4,902        15,775         2,335         2,018       $25,030
Slovakia           3,516         9,550         1,872         1,326       $16,264
Slovenia           3,485         1,400         1,398           803        $7,086
================================================================================
Total          $33,962\a       $86,300       $10,603       $11,840      $142,705
--------------------------------------------------------------------------------
Note:  The DOD programs depicted in this table are funded through the
050 national defense budget function and account for about 31 percent
of the funds programmed for these six countries.  The State programs
are funded through the 150 international affairs budget function and
account for about 69 percent of the funds programmed for these six
countries. 

\a This total, which includes $26,680,000 in exercise costs,
understates the actual amount because DOD was unable to provide total
cost for all exercises planned for fiscal year 1997 that would
involve these six countries.  DOD's primary interoperability
programs, which account for almost all of the remaining $7,282,000,
are detailed in appendix III. 

Figure IV depicts the allocation of the $142.7 million programmed for
the six countries that we addressed in our review by program type. 
As it illustrates, about 60 percent of U.S.  assistance to these
nations has been in the form of financing for defense articles and
services.\8

   Figure IV:  U.S.  Warsaw
   Initiative and Other Aid
   Provided to the Six Countries,
   by Program

   (See figure in printed
   edition.)


--------------------
\8 The United States has given Romania $4.3 million in excess defense
articles. 


      U.S.  ASSISTANCE AND NATO
      PFP AREAS
---------------------------------------------------------- Letter :4.1

U.S.  assistance to the six countries that we included in our review
is addressing NATO PFP cooperation areas.  For example, the largest
single U.S.  effort in the six countries--the $32.8 million Regional
Airspace Initiative--could help address one PFP area of cooperation
(air traffic control) by providing five of the six countries with air
sovereignty operations centers.  Funded primarily with Warsaw
Initiative FMF funds, the Regional Airspace Initiative is intended to
help Central and East European countries make the transition to
western air traffic management practices, including those used by
NATO members.  A DOD study, partially funded by the Warsaw
Initiative, concluded that all aspects of the region's air
sovereignty operations needed improvement and that the pace of
modernizing outdated systems was being constrained by cost,
operational, and transitional implications.  We found that other
FMF-funded purchases in the region also correspond to NATO-designated
objectives, including communications.\9

Similarly, DOD has used the Warsaw Initiative's Defense Resources
Management Studies project to support PFP's defense planning and
budgeting cooperation area by programming about $2.8 million in
fiscal years 1995-97\10 to expose the six countries to U.S.  defense
budget planning and programming practices.  DOD also programmed about
$26.7 million during fiscal years 1995-97 to support the six
countries' participation in NATO- and U.S.-sponsored exercises. 

The U.S.  European Command is now focusing its JCT program--which is
not part of the Warsaw Initiative--on NATO PFP areas of cooperation. 
The Command established the program in 1992 to introduce Central and
East European defense officials to U.S.  programs and practices by
detailing U.S.  military teams to their militaries.  Command
officials told us that in 1994 they began focusing the program on PFP
areas of cooperation.  Our analysis of DOD data indicates that during
1995-97, the six countries took part in 1,532 JCT-facilitated events. 
Almost 92 percent of these events were related to NATO PFP areas of
cooperation--primarily standardization, communications, exercises,
logistics, and training. 

The U.S.  program is also helping to train officers from the six
countries to speak English, one of NATO's official languages. 
According to NATO and DOD officials, English language training is
particularly needed.  While NATO has made language training for
officers a PFP interoperability objective, it opted to leave foreign
language training to its members.  We found that the United States
had allocated about 20 percent of fiscal year 1995-96 IMET funds
($1.43 million) for these six countries for English language
training.  DOD also provided almost $3 million in fiscal year 1996
FMF funds for English language training. 

U.S.  and recipient officials believe that the U.S.  assistance is
helping to promote closer working relationships among the recipients
and NATO. 


--------------------
\9 The United States has not yet provided Poland, Hungary, and the
Czech Republic with the FMF loans that Congress authorized for them
in 1997.  According to a State Department official, the Czech
Republic has requested a loan of $80 million, while officials of the
other two countries have expressed interest. 

\10 DOD provided $500,000 in fiscal year 1994 funds for the Polish
component of this project prior to the establishment of the Warsaw
Initiative. 


   EFFORTS TO COORDINATE ALLIED
   SUPPORT
------------------------------------------------------------ Letter :5

Several NATO members are providing bilateral assistance to PFP
partners.  NATO and some of its members are seeking to exchange data
about PFP-related efforts in several different forums.  However,
consistent data concerning the cost and scope of all non-U.S. 
bilateral programs is generally not available. 

We determined that several other NATO members--including Germany,
Denmark, the Netherlands, the United Kingdom, France, and Canada--are
providing bilateral assistance in support of PFP objectives in one or
more of the six countries that we reviewed.  For example, data
provided by German officials reveals that Germany's 1996-97 program
is heavily focused on these six countries.  About two-thirds of the
partner participation of German-sponsored events--including
ministerial visits, defense staff talks, expert talks, armed forces
personnel exchanges, and military training and language
assistance--involved the countries that we reviewed. 

According to DOD officials, Denmark is leading NATO efforts to engage
its Baltic neighbors in PFP.  Danish officials told us that Denmark
is focusing its efforts on Poland and other states in the Baltic
region.  They informed us that Denmark is allocating almost 10
percent of its $10.8 million 1997 military assistance budget to help
reorient Polish forces to NATO standards. 

To facilitate the sharing of information on such efforts, NATO has
organized a voluntary PFP data-sharing process, known as the
clearinghouse.  The clearinghouse involves periodic exchanges of data
by member states regarding their PFP-related bilateral programs. 
NATO has not charged this forum with the task of organizing bilateral
assistance efforts, however, and the clearinghouse's ability to
gather and disseminate complete data about the full range of
bilateral programs has been hampered by certain members'
sensitivities regarding disclosure of data about their programs. 
These members initially presented only general information about
their programs.  DOD officials informed us that--despite these
difficulties-- clearinghouse sessions are becoming increasingly
useful and that NATO hopes to work through the clearinghouse to
encourage donors to collaborate in a given region (e.g., joint
English language training programs). 

DOD officials have coped with the clearinghouse's limitations by
meeting outside of the clearinghouse with several other donor states. 
Officials from the United States, Canada, Germany, and the United
Kingdom meet after clearinghouse sessions to exchange more detailed
information.  DOD officials hope to increase the size of this group. 
Clearinghouse limitations also prompted SHAPE's PFP unit to develop
its own database to help ensure that participating units are not
inadvertently scheduled to take part in multiple events at once.  In
addition, the defense attaches of some NATO member donor states work
to coordinate their nations' efforts in the countries that we
visited.  However, their data is not necessarily official or
complete, according to one U.S.  defense attache. 

Although data on other nations' programs is limited, according to
DOD, NATO has not identified cases in which a nation is wastefully
duplicating aid provided by another.  In some cases--such as English
language training--nations are working separately to address what
NATO and U.S.  officials believe is a very large need. 


   PROSPECTIVE NEW MEMBERS
   PREPARING FOR NATO MEMBERSHIP
------------------------------------------------------------ Letter :6

The six countries that we reviewed have taken several steps to
demonstrate their interest in joining NATO and to prepare for
possible membership.  Officials in the countries that we visited
informed us that they view PFP as an important opportunity to
demonstrate their interest in joining NATO and to develop a better
understanding of NATO procedures.  The six countries plan to take
part in an average of 190 PFP activities--ranging from the Czech
Republic's 129 to Romania's 297.  Each of the six countries has also
volunteered to participate in NATO's planning and review process and
has responded in detail to NATO questions concerning their forces'
compliance with NATO interoperability objectives.  Poland has
established a 25-person unit in its Ministry of Defense to oversee
Polish incorporation of NATO standardization agreements. 

Each of the six countries has also engaged in NATO's "intensified"
dialogues on the possibility of joining NATO and reviewed NATO's 1995
study concerning NATO's expectations of potential new members.  Each
then prepared detailed responses addressing its status and plans
concerning topics raised in the NATO study--such as democratic
control over armed forces, restructuring of armed forces,
interoperability with NATO, ability to pay for defense expenses, and
relations with neighboring states.  Examples of actions taken to
address NATO expectations include Poland's efforts to increase
civilian control over its military and a Hungarian-Romanian accord to
resolve issues concerning Hungarian minorities in Romania. 

All six of these countries have also demonstrated their interest in
NATO by volunteering units to support the NATO-led peace operation
effort in Bosnia.\11 NATO officials informed us that the Bosnia
mission has greatly promoted the interoperability of these nations'
units with those of NATO members. 

All six nations have also streamlined portions of their Soviet-era
force structures.  For example, according to U.S.  officials, Poland
has cut its military manpower in half since the end of the Cold War
and is seeking to develop more mobile units for possible use by NATO. 
The other five nations have also reduced much of their force
structures. 


--------------------
\11 See our report entitled Bosnia Peace Operation:  Progress Towards
Achieving the Dayton Agreement's Goals (GAO/NSIAD-97-132, May 5,
1997). 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

In commenting on a draft of this report, DOD and the Department of
State stated that they concurred with the report.  DOD's comments are
presented in appendix IV.  The Department of State provided its
comments verbally.  DOD and Department of State officials also
provided several technical comments and we have incorporated them
into this report. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8

To address our objectives, we interviewed officials and gathered and
analyzed information from officials in the Department of State; the
Office of the Secretary of Defense; the Joint Chiefs of Staff; the
Defense Intelligence Agency; the Defense Security Assistance Agency;
the U.S.  Mission and Military Delegation to NATO, Brussels, Belgium;
the U.S.  European Command in Germany; the U.S.  Atlantic Command,
Norfolk, Virginia; NATO headquarters in Brussels, Belgium; SHAPE in
Mons, Belgium; U.S.  country delegations in Poland, the Czech
Republic, Hungary, and Germany; and recipient governments in the
Czech Republic, Poland, and Hungary, and Germany, and Denmark. 

In determining how NATO PFP programs are assisting the six aspiring
NATO members that we addressed in our review, we obtained and
analyzed information pertaining to PFP program implementation,
planning, and budgeting, including the individual partnership plans
that NATO has completed with each of the six nations and their
responses to NATO interoperability surveys.  We used the data in the
individual partnership plans to determine (1) the total number of
NATO-sponsored PFP events that each country had opted to participate
in and (2) the number of such events in each PFP area of cooperation. 
We then aggregated the results to determine the areas of cooperation
the six countries were focusing on as they volunteered for
NATO-sponsored PFP events.  We also obtained the views of officials
concerning PFP performance and its impact on operational
capabilities. 

In reviewing U.S.  bilateral assistance projects for PFP partners and
aspiring NATO members, we obtained and analyzed information pertinent
to U.S.  bilateral assistance.  Using this data, we analyzed the
extent to which the United States is focusing on these countries and
the nature of the aid.  We also compared the stated purpose of the
U.S.  programs to the needs of the six countries and NATO's
designated cooperation areas. 

In ascertaining how NATO and member countries' efforts were being
coordinated, we analyzed summary information and minutes from NATO's
clearinghouse database and reviewed detailed data obtained from other
donors of PFP-related aid. 

In obtaining information on how the six potential members mentioned
above are preparing for possible admission into NATO, we obtained and
analyzed information on their force structures, participation in NATO
exercises, and training requirements to support improved
capabilities. 

We conducted our review between November 1996 and June 1997 in
accordance with generally accepted government auditing standards. 


---------------------------------------------------------- Letter :8.1

We are providing copies of this report to other congressional
committees, the Secretary of State, and the Secretary of Defense. 
Copies will be provided to others upon request. 


Please contact me on (202) 512-4128 if you or your staff have any
questions concerning this report.  Major contributors to this report
are listed in appendix V. 

Sincerely yours,

Harold J.  Johnson, Associate Director
International Relations and Trade Issues


PARTNERSHIP FOR PEACE AREAS OF
COOPERATION AS OF MAY 1996
=========================================================== Appendix I

Air defense
Air traffic management/control
Consultation, command, and control/communications and information
systems
Civil emergency planning
Coordination of Partnership for Peace (PFP) activities
Crisis management
Democratic control of forces
Defense planning and budgeting
Defense procurement programs
Defense policy/strategy
Defense research and development
Defense structures
Exercises
Military infrastructure
Consumer logistics
Peacekeeping
Standardization/interoperability
Training


NORTH ATLANTIC TREATY ORGANIZATION
PFP INTEROPERABILITY OBJECTIVE
TOPICS
========================================================== Appendix II

Command and control organization
Command and control process
Command and control procedures
Command and control systems architecture
Deployable command and control systems
Logistics doctrine and procedures
Logistics command and control
Logistics reporting
Centralized contracting and reimbursement procedures
Logistical sustainability of units
Supply standards and equipment availability--land
Automated data-processing support--logistics
Medical support
Medical standards in search and rescue
Blood and blood donor procedures
Aeromedical evacuation
Replenishment in harbor
Replenishment at sea (liquid)
Replenishment at sea (solid)
Fuel standards
Fuel handling for land vehicles
Ground fuel handling for aircraft
Air-to-air refueling
Self-sufficient potable water supply and installations
Cargo handling and transportation
Auxiliary electrical power generation systems
Land operations
Combat support and combat service support units
Maritime operations
Close air support
Air reconnaissance
Forward air control
Air transport
Search and rescue operations
Airborne air defense
Ground-based air defense
Aircraft transponders and air traffic control
Availability of units
Movement planning
Maps and symbologies
Marking and reporting of hazardous areas
Airfield infrastructure and procedures
Air navigation aids
Language requirement
Weather support


DEPARTMENT OF DEFENSE WARSAW
INITIATIVE INTEROPERABILITY
PROGRAMS
========================================================= Appendix III

During fiscal years 1995-97 the Department of Defense (DOD)
programmed almost $7.3 million to support U.S.  interoperability
programs in the six countries included in our review, including about
$7.2 million for the following programs.  The United States also
allocated over $1 million in fiscal year 1994 funds for two of these
programs before the establishment of the Warsaw Initiative. 


   REGIONAL AIRSPACE INITIATIVE
------------------------------------------------------- Appendix III:1

The Regional Airspace Initiative Program seeks to help develop civil
and military airspace regimes that are fully interoperable with West
European civilian airspace organizations.  Using its Warsaw
Initiative funds, DOD first studies Partnership for Peace partner
requirements for building and operating an effective air sovereignty
system.  For the six countries that we reviewed, DOD programmed about
$594,000 for such studies in fiscal year 1995-97 funds, in addition
to $508,000 in fiscal year 1994 funds. 

The partners are responsible for implementing the studies' results. 
To encourage them to do so, the United States has offered to provide
partner states air sovereignty operations centers if they provide
funds needed to otherwise complete implementation.  The centers will
be bought with $32.3 million in State Department Foreign Military
Financing funds. 


   DEFENSE RESOURCE MANAGEMENT
   EXCHANGE
------------------------------------------------------- Appendix III:2

DOD's Defense Resource Management Exchange Program involves
country-specific exchanges on defense planning and force structure
methodology.  Its objective is to expose partner countries to defense
management systems similar to those of North Atlantic Treaty
Organization (NATO) members.  DOD hopes that the program will also
help partner states' civilian officials assert control over their
military structures.  DOD has programmed about $2.8 million for such
studies in fiscal year 1995-97 funds in addition to $500,000 in
fiscal year 1994 funds. 


   DEFENSE PLANNERS EXCHANGE
------------------------------------------------------- Appendix III:3

The Defense Planners Exchange Program hosts working-level Central
European officials to (1) familiarize them with U.S.  methods for
building a strategy-based and balanced defense program, (2) promote
openness by allowing foreign officials to provide briefings on their
defense planning processes, (3) help the officials address defense
planning problems, and (4) enhance their intensified dialogues with
NATO.  DOD programmed about $60,000 in fiscal year 1995-97 funds for
this program in the Czech Republic, Romania, and Slovenia. 


   DEFENSE PUBLIC AFFAIRS EXCHANGE
------------------------------------------------------- Appendix III:4

Through this program DOD has sponsored information exchanges with
defense public affairs offices in the Czech Republic, Hungary, and
Poland.  DOD programmed about $84,000 in fiscal year 1996-97 funds
for this program in the six countries that we reviewed. 


   PARTNERSHIP INFORMATION
   MANAGEMENT SYSTEM
------------------------------------------------------- Appendix III:5

The Partnership Information Management System plans to establish a
computer network that will link partners' capitals, U.S.  government
facilities (such as the European Command), and the Supreme
Headquarters Allied Powers in Europe's partnership coordination unit. 
DOD programmed about $852,000 in fiscal year 1995-97 funds for this
program in the six countries that we reviewed. 


   COMMAND AND CONTROL STUDIES
------------------------------------------------------- Appendix III:6

DOD is studying the command and control systems of partner countries
to help assess their interoperability with those of U.S.  forces in
peacekeeping and peace enforcement efforts and the readiness of their
military capability for NATO membership.  The studies will focus on
the weaknesses of the partners' systems and propose corrective
actions.  DOD programmed almost $2.7 million in fiscal year 1995-97
funds for such studies and a navigational aids study for the Czech
Republic, Hungary, and Poland. 


   PERSONNEL AND READINESS
   EXCHANGE
------------------------------------------------------- Appendix III:7

DOD hosts U.S.-partner data exchanges concerning how each nation is
addressing personnel and readiness issues associated with the reform
of Soviet-era militaries.  DOD programmed about $30,000 in fiscal
year 1995-97 funds for this program in the Czech Republic and
Hungary. 




(See figure in printed edition.)Appendix IV
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
========================================================= Appendix III


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

David Martin
James Shafer
Joseph Brown
Hynek Kalkus
Gregory Nixon
Pierre Toureille

*** End of document. ***