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personnel costs averaged nearly 45% of defense outlays, operational costs were about 30%, and procurement of major weapons and equipment about 25%. In recent years the armed services have been receiving a declining share of the central government budget. During the fiscal years 1 July 1968 through 30 June 1973, the military budget averaged slightly under 13% of the central government budget; during fiscal years 1964 through 1967, it averaged 16.2%. In real terms -- that is, discounting inflation -- the 1972-73 military budget of US $1,474.6 million is equivalent to the 1971-72 military appropriation. This austerity budget, and the 5-year defense plan which sets defense spending at a total of $6 billion for 5 years, portends a further decline in future military budgets. Annual defense budgets are shown below.

5. Logistics (S)

The highly industrialized Swedish economy is capable of meeting virtually all of the materiel requirements of the armed forces. Domestic production includes infantry and artillery weapons, armored and general-purpose vehicles, ammunition, signal and engineer equipment, and most types of naval vessels up to and including light cruisers. The production effort, however, is dependent on imports of some raw and semifinished materials and components. Sweden's aircraft industry produces jet fighters and trainers; it has developed the Viggen jet fighter, of which an attack version is not in production, and reconnaissance and interceptor models are planned. The Viggen will be the air force's principal fighter aircraft during the 1970s. The output of the missile industry is limited to surface-to-surface, surface-to-air, air-to-air, air-to-surface, and anti-tank missiles. Although Sweden is an exporter of military materiel, limited amounts of certain items have been imported from Western European countries.

The provision of ordnance and quartermaster materiel for the Swedish armed forces is the responsibility of the Defense Materiel Administration (FMV), which is subordinate to the Minister of Defense. Requirements estimates are forwarded to the FMV by the Supreme Commander and the commanders in chief of the three services. The Defense Materiel Administration has overall responsibility for procuring all materiel and supplies, maintenance and repair, and technical development of procurement items. Approximately 90% of all materiel ordered by the FMV is supplied by Sweden's defense factories.

Central depots are maintained by the support services. In addition, there are depots under the control of the regional commands and training units. To reduce the vulnerability of these depots, great emphasis has been placed on decentralization. Extensive underground facilities exist for storage of petroleum reserves, ammunition, and explosives.

The armed forces do not possess nuclear weapons, and research directed at creating a technical and economic basis for production and testing of nuclear weapons has been prohibited. However, the Swedish

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200090016-9