“I think that this will also be a debate in the United States because they’re also far away from the 5 percent,” Gram said.
He argued that spending as a percentage of GDP “is not everything.”
“For Norway, the GDP varies a bit more than most countries because of the oil production and the prices,” Gram said.
He noted that the fossil fuel exporter’s economy shrank during the pandemic as oil and gas prices plummeted thanks to the global slowdown in economic activity. “In the pandemic years, we reached 2 percent [of GDP], but that was not because the defense budget increased that much. It was because of the fall in the GDP,” he said.
Despite that note of caution, Gram said Norway’s eventual goal is to increase its defense budget to 3 percent of the economy by the end of the decade.
A big driver of higher spending is the country’s massive new frigate procurement program. Norway aims to procure five or six of the anti-submarine warships, which come equipped with onboard helicopters.
“It’s such a huge procurement for us,” Gram said, citing a total cost of €20 billion to €30 billion. “This will be, in economic terms, the biggest procurement in modern Norwegian defense history … This is a huge thing.”
Norway has approached France, Germany, the United Kingdom and the United States to discuss a potential strategic partnership to build the vessels, and will finalize its decision later this year.
