The Arctic Debrief: Norway will reach NATO defence spending goal in 2024

In this edition:

• Norway will reach NATO defence spending goal in 2024
• Putin and Xi meet in Beijing; reaffirm strategic partnership
• NATO must "wean-off" energy and natural resource dependence on Russia and China

Latest Developments

Norway will reach NATO defence spending goal in 2024

The Norwegian government unveiled the revised national budget on May 14, which proposes to increase the annual defence budget by NOK 13 billion ($1.2 billion), bringing it to a total of NOK 104 billion ($9.7 billion) or 2% of Norway's GDP.

When the 2024 national budget was released in October 2023, it was already about NOK 15 billion ($1.3 billion) higher than the previous year's budget. The focus will be on increasing military stockpiles, assist with army recruitment, and construction of army infrastructure. The biggest ticket item in the budget was the government's plan to purchase five to six frigates for the Norwegian navy, with a focus on Anti-Submarine Warfare.

The new funding added in the revised national budget will be used to provide additional military aid for Ukraine (NOK 6 billion) and to kickstart some long-term projects ahead of schedule (NOK 7 billion).

In recent years, Norway has focused on the importance of Arctic security, especially as the country shares a border with Russia. Part of the military budget will go towards reopening the Andøya Air Station as a base for long-range drones and will be NATO's operating base in the region. Multiple NATO training exercises have taken place in Norway's north.

Additionally, the UK and US have increased their military presence in the country as it is a crucial ally for the defence alliances northern flank in Europe. The UK has set up "Viking Camp" which host a British special operation forces unit for training and cooperation with the Norwegian Army. Meanwhile, the US has signed a defence agreement with Norway which will allow it to establish bases across the country and integrate their defence.

Putin and Xi meet in Beijing; reaffirm strategic partnership

The Russian president's two day trip to China started off with a meeting with Xi Jinping. The two posed for photo-ops and signed an agreement to continue their "no-limits" partnership which the two leaders announced in February 2022, just days prior to Russia's invasion of Ukraine.

With Russia's military and economy weakening, the relationship between the two countries has been leaning in China's favour. Western sanctions are starting to hinder the Russian oil and gas sector and advanced technology is becoming scarce. As such Russia has become heavily reliant on China, specifically for non-lethal military aid and technological components used in arms manufacturing.

This shift in dynamics between the two states plays heavily into China's Arctic strategy. The Chinese government has set eyes on Arctic resources, such as rare minerals and oil, and sees Russia as a gateway to the region.

Even before 2022, China used its relationship with Russia as a way to access the Arctic through research expeditions and state corporations purchasing rights to mining and drilling operations.

China is likely to use this opportunity further secure its presence in the Arctic through commercial projects, including mining, energy, and manufacturing.

NATO must "wean-off" energy and natural resource dependence on Russia and China

The 75th annual NATO meeting, which will be held in Washington D.C. in July, should focus on securing energy and natural resource supply chains, said Canadian Defence Minister Bill Blair.

The minister highlighted the supply chain issues that the West experienced when the COVID19 pandemic shut down nearly all global traffic.

Instead of relying on China and Russia for their energy and critical minerals needs, NATO should focus on developing domestic capabilities to extract, process and manufacture critical minerals and develop energy sources that do not depend on adversarial nations.

The minister highlighted the difficult situation that Europe was in following Russia's invasion of Ukraine, due to their reliance on Russia for energy. While countries have been able to diversify their energy sources and move away from Russian oil and gas, the same could happen with a dependence on China for critical minerals.

As the Arctic becomes more accessible it is becoming more economically viable to explore and extract vast deposits of natural resources that have been untouched for most of human history.

The Canadian north is currently seeing an increase of corporate interest looking to develop projects that can tap into those resources. If the NATO countries heavily invest in Arctic development it is possible that their energy and critical mineral needs could be fulfilled without having to turn to foreign markets.