51 Sodobni vojaški izzivi, november 2013 – 15/št. 3
Contemporary Military Challenges, November 2013 – 15/No. 3
DOBRO	UPRAVLJANJE	OBRAMBNIH
SISTEMOV	V	ČASU	GLOBALIZACIJE
Povzetek
Ključne 
besede
Abstract
Damir Črnčec
GOOD	GOVERNANCE	OF	DEFENCE	SYSTEMS
IN	GLOBALIZATION	ERA
Globalizacija, gospodarska soodvisnost, informatizacija in telekomunikacije so 
pospešile gospodarsko rast držav v razvoju. Pomemben dejavnik gospodarske rasti 
je tudi dobro upravljanje in poslovanje, povezano s politično stabilnostjo. Globalno 
upravljanje se namreč začne pri nas, našem delovanju in ravnanju v mikro okolju. 
Dobro delovanje na mikro ravni je nato popotnica za uspešno vključevanje v procese 
na makro in globalni ravni. To velja tako za vsakogar izmed nas kot tudi za državo. 
Dobro delovanje oziroma upravljanje na mikro ravni – intraupravljanje – je pogoj za 
uspešno zunanje upravljanje, in sicer ekstraupravljanje na makro oziroma globalni 
ravni. Zmožnost lastnega intra- in ekstraupravljanja je odvisna od zmožnosti spre-
jemanja odločitev. Ta se zmanjšuje s povečevanjem zadolženosti države in njeno 
zunanjo nekredibilnostjo zaradi nenavadnih ravnanj njenih upravljavcev. 
Posebno področje razprave predstavlja dobro upravljanje obrambnega sistema, kajti 
v procesih nadaljne optimizacije in racionalizacije se je treba dotakniti tudi vseh 
vprašanj, povezanih z okoljem, v katerem deluje obrambni sistem. Izhajati je treba iz 
tega, da je integracija znotraj obrambnega resorja nujna in čimprejšnja, prav tako tudi 
znotraj resorja za notranje zadeve. Tako integrirane obrambne strukture na eni strani 
in notranjevarnostne na drugi strani je nato treba optimalno in racionalno povezati. 
Integracija teh dveh struktur ni mogoča zaradi številnih strokovnih razlogov. 
Evropska unija, globalizacija, Nato, obrambni sistemi, Slovenija, vojaški izdatki, 
dobro upravljanje.
Globalization, economic interdependence, informatisation and telecommunications 
have accelerated economic growth in developing countries. An important factor of 
the economic growth is also good governance and operations in relation to political 
stability. Namely, global governance starts with us, with our operation and perfor-
mance in a micro-environment. Good governance on a micro-level can then serve 
DOI:10.33179/BSV.99.SVI.11.CMC.15.3.4
 52 Sodobni vojaški izzivi/Contemporary Military Challenges
Damir Črnčec
as a good companion on the path towards inclusion in the processes on a macro and 
global level. This is true for each and everyone of us as well as for the country. Good 
governance, that is governance on a micro level, intra-governance, is a pre-condition 
for successful external, extra-governance on a macro, global level, whereas an ability 
of our own intra- and extra-governance depends on the ability to take decisions. 
However, this ability decreases with increasing indebtedness of the country and its 
external unreliability resulting from unusual actions of its managers. 
Good governance of the defence system represents a special topic of the discus-
sion, as the processes of further optimization and rationalization need to address also 
the issues relating to the environment in which the defence system operates. Our 
reasoning must therefore stem from the fact that integration is urgent within both, 
the defence and interior structure. The integrated defence structure on one side and 
the internal security structure on the other should then be optimally and rationally 
integrated. However, integration of these two structures is impossible for numerous 
expert-level reasons. 
European Union, globalization, NATO, defence systems, Slovenia, military ex-
penditure, good governance.
Governance and good governance are two concepts that are not very well known in 
a general context, let alone in a more specific defence or military field. Nevertheless, 
worth mentioning is the importance of good governance in the defence field as 
something that is not only desired or recommended, but urgent. In the time when 
financial resources are declining and when rationalization and optimization are on 
the move, good governance can act as a unique shock absorber trying to reduce the 
damage suffered by the defence system. The optimal ratio between the financial 
resources allocated for the costs of the personnel, operational activities and new ac-
quisitions, which is 50:30:20, represents, in the case of Slovenia, a distant history 
and even more uncertain future. 
Slovenia has found itself in a worse economic crisis than the majority of the European 
Union or Euro zone. It forms part of the environment where developing countries 
have not known the meaning of the economic crisis for a decade or two. Therefore, 
the ambition and the main purpose of this article is, in addition to explain the basic 
terminology, to demonstrate and analyze the actual economic crisis from the global 
and European point of view, to determine how, if at all, the economic crisis influ-
ences the global defence expenditure, and to analyze the placement of Slovenia in 
this context both, from the economic and defence point of view. A logical question 
that arises at this point refers to the relation between good governance and economic 
crisis. 
I dare to say that countries with a stable political structure, aspiring-to-the-state-
hood tradition and due understanding of the meaning of the governance, training, 
Key words
Introduction
 53 Sodobni vojaški izzivi/Contemporary Military Challenges
GOOD GOVERNANCE OF DEFENCE SYSTEMS IN GLOBALIZATION ERA
education and appointment of the right people to the right positions at the right time 
can ensure better governance of the state and, consequently, of its (defence) systems. 
The lack of these traditions coupled by frequent replacements of governments in 
the crisis period has caused a lot of economic damage and, indirectly, damage in the 
defence field. Once the economic crisis broke out in the country, Slovenia first cut 
the defence expenditure, which, unfortunately, has not diminished the crisis. The 
dilemma of whether to have butter or guns in Slovenia has not increased the amount 
of butter once the financial resources allocated for guns decreased. 
The figures presented in the continuation of the article speak for themselves. 
A mixed methodological approach and a combination of a descriptive method, 
a method of direct observation with participation and, in particular, a secondary 
analysis of statistical data allow the complex problems, such as governance of 
defence systems in the globalization era, to be addressed in a thorough way. At 
this point, at least in the case of Slovenia, we must open a discussion on the need 
to ensure good governance of the defence and internal security sub-system within 
the national security system, i.e. between the Slovenian Armed Forces and Police1 
in the narrow sense. 
Slovenia is also part of the globalization as a process and concept which we have 
lived for more than a half of the century and which has, particularly in the framework 
of the international relations studies, opened the door for a new study area relating 
to global governance. The contents relating to global governance are addressed by 
numerous scientific disciplines and subjects, such as geostrategic studies, diplomatic 
studies, trade relations, military and defence studies, peace studies, governance, etc. 
The acceleration experienced by the globalization and its transition to the third level, 
Globalization 3.0 as termed by Friedman (2007), further increase the importance of 
global governance in a flat world. In the near future the issues relating to global gov-
ernance and operations will most probably outgrow the conceptual framework and 
become a new scientific discipline.
Is the world in a global crisis? Are the reasons for the crisis clear and known to 
everybody? Do we know how and are we able to eliminate them? What can be done 
about it on the level of a two million country which is the EU and NATO member 
state? What can be done about it on the level of an individual, an active citizen? 
The time in which we live is characterized by this and numerous other issues, as we 
have been dealing with them for some years now. How to explain to workers who 
have lost their jobs in a factory or the service sector this is a result of Slovenia being 
exposed to globalization influences as well? The loss of ten thousands of jobs in 
Slovenia in the past few years partially results from globalization and our inability 
to adapt to global trends, while partially the cause and fault also lie in us. But not 
1 The media discussions in the summer of 2013 about the Slovenian Police were both, comical and worrying. 
Discussing that the Police have no financial resources for basic maintenance of their car park or for acquisition 
of new tyres for police vehicles demonstrates that something is clearly very wrong in the governance of the 
Slovenian national security system. 
 54 Sodobni vojaški izzivi/Contemporary Military Challenges
in factory workers who do their job professionally and always within the deadline, 
but in the managing personnel who is responsible for running and managing the 
company's operations. Do they know, do they have the ability and do they under-
stand what is going on around them? 
In the past few decades the media have daily bombarded us with the words such 
as global, globalization, globalized world, etc. For five or six years we have also 
constantly used the phrase economic (global) crisis, a crisis as a result or conse-
quence of the global governance which has obviously not been very adequate. And 
the outcome is a crisis. The things are, of course, not that simple; poor governance 
equals the crisis; the links between cause and effect undoubtedly exist. To be able 
to understand these links, we must explain and define what exactly globalization 
is, what global governance is and how to add operations to global governance. We 
can also generally discuss governance and operations on a global level, i.e. global 
operations. 
However, this discussion is more of a fundamental than substantive character. A sub-
stantive discussion is necessary and urgent, the same as the search for answers to 
numerous questions asked in the introduction. A limited room for discussion does 
not enable a thorough and in-depth analysis. Nevertheless, it allows and requires a 
clear definition of the meaning of the phenomena presented as well as a demonstra-
tion of their interdependence. All this makes a good framework and starting-point 
to seek and understand various offered answers to the questions asked in the in-
troduction. Mathematically speaking, the common denominator is something that 
is urgently needed when discussing global governance and operations, as only the 
common denominator in the semantic field can enable and offer an adequate basis 
for an analytical as well as scientifically and methodically correct discussion on 
global governance and operations. 
 1 ON GLOBALIZATION
According to the Dictionary of Standard Slovene Language2, an adjective global has 
three meanings. The first two are directly associated with the understanding of the 
globalization concept. The first meaning is defined as »comprehensive, total - ad-
dressing a problem in a general manner, without details«. The second meaning of 
the word is defined as »pertaining to the entire globe, the whole world«. The third 
meaning »vague, general« is, however, less useful for our discussion. The noun glo-
balization has yet to find its place in the SSKJ; therefore, when writing in Slovene, 
the adjective global offers us the necessary help. 
It must be understood that globalization cannot be simply and universally defined. 
Its concept for the first time appeared in Webster Dictionary in 1961. In their study 
Al-Rodhan and Stoudmann (2006) listed 114 various definitions of the globalization, 
2 Hereinafter referred to as “SSKJ” (digital edition, 2000. Ljubljana: Slovenian Academy of Sciences and Arts).
Damir Črnčec
 55 Sodobni vojaški izzivi/Contemporary Military Challenges
and as a result of their analysis offered their own definition: »Globalization is a 
process that encompasses the causes, course, and consequences of transnational and 
transcultural integration of human and non-human activities (ibid.) «. To simplify 
the understanding of globalization I will give some more definitions which, in my 
opinion, describe this phenomenon very well. 
»Globalization as a historical process denotes the intensification of worldwide 
social relations and interactions such that distant events acquire very much 
localized impacts and vice versa. It involves a rescaling of social relations, from 
the economic sphere to the security sphere, beyond the national to the transna-
tional, transcontinental and transworld (Held and McGrew, 2007, p. 2). “The first 
definition of the World Bank from 2001 states that »globalization is the growing 
integration of economies and societies around the world”.3 Its second definition 
argues that »globalization refers to the growing interdependence of countries 
resulting from the increasing integration of trade, finance, people, and ideas in 
one global marketplace ... Globalization started after World War II but has accel-
erated considerably since the mid-1980s, driven by two main factors, technologi-
cal advances, including computation, and the increasing liberalization of trade and 
capital markets.« 4
For the purposes of this article, let me explain that globalization is understood as a 
constant ongoing process which encompasses the entire world in all spheres of life 
of an individual and a country. Its key characteristic is that actions performed on 
a micro level in remote places can have implications on a macro, global level, and 
the other way around. Globalization is thus something that lives today, with us and 
by our side. It is a process that has lasted for decades and whose end is not on the 
horizon. On the contrary, new technical innovations have a direct effect on relations 
on all levels of a social life even in the most remote places of the world. Additional 
economic liberalizations are a constant in the world trade. For example, the year 
2013 will remain marked by the beginning of negotiations between the EU and US 
on signing the Transatlantic Trade and Investment Partnership Agreement5 which 
will, of course, have direct implications and consequences also for Slovenia as an 
EU member. 
Signing and implementing such agreements is part of measures relating to neoliber-
alism which is, as one of the four policy development types, the most in favour of 
globalization. Some aspects of globalization enjoy support of both, reformists and 
transformists, while the rejection approach defends a return to the society without 
globalization infrastructure. The neoliberal approach is based on four pillars of glo-
balization policy: deregulation of markets, liberalization of cross-border trade, pri-
vatization of ownership and services, and strict reduction in public expenditure. As 
3 See http://www1.worldbank.org/economicpolicy/globalization.
4 See www.worldbank.org/depweb/beyond/beyondco/beg_12.pdf.
5 See remarks by the President in the State of the Union Address, www.whitehouse.gov/the-press-
office/2013/2012/reamarks-president-state-union-adrress, 23.4.2013. 
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mentioned before, the rejection approach entirely refuses to accept globalization, 
while reformism, the same as the rejection approach, opposes the neoliberal mar-
ket-oriented concept of globalization, but does not reject globalization as such. It 
suggests state interventions in the form of public policies designed to regulate glo-
balization processes, and defends transnational mechanisms of public policy devel-
opment. Transformists would like to transform globalization trends in a similar way 
as reformists, with a final aim to transform the current social structures so that they 
would outgrow capitalist institutions (Ferfila, 2007, p. 301-302).
In two of the four policy development types we can recognize a wish for radical 
changes to the existing neoliberal political paradigm. A complete rejection of glo-
balization or a demand to outgrow capitalist institutions sound rather neosocialist. 
It has been seen in practice that neoliberal globalization brings not only numerous 
opportunities, but also traps. Each individual, country and society has a possibility 
to take advantage of the available opportunities. If they fail to do so, the traps can be 
very painful. A combination of neoliberalism and reformism may be a good option 
for the future. This is true also for Slovenia which, of course, cannot afford autarky; 
however, a combined approach may allow it to retain some positive systemic struc-
tures from the previous political system. Health care services and pension benefits 
must remain available to the widest population. On the other hand, we must support 
education in a spirit that we must take care of ourselves and demand from the state 
equal opportunities and not a comprehensive care for individuals. The outcome 
could be a genuine Slovenian model which would take into consideration national 
characteristics, size, (political) history, geographic position, etc. Establishment of a 
conceptual framework is therefore a very important task; however, of at least similar 
importance is implementation of this concept in practice which requires a high-
quality execution of the pre-set tasks. In order to attain this goal, we need a wide 
range of people with various skills among which, I dare to say, the most important 
is governance. 
 2 ON GOVERNANCE
Each organization or an organized group of people needs to be managed and governed. 
Organizational theories dedicate a lot of attention to this issue. »Each organization 
needs a few different organizational structures for various tasks (Drucker, 2001, p. 
22). « Managing an organization and its various structures is the responsibility of 
management. »Management is a precisely defined body that is specific for each or-
ganization and at the same time common to all organizations.... The main point of the 
management existence is that institutions achieve results that are visible also outside 
these institutions (ibid.). « Management can therefore be bodies or the people that 
manage. Governance is a verbal noun of the verb “to govern” and describes two 
types of activities: »An activity that deals with governing, directing life in a social 
community, and activity that deals with taking decisions on life and with performing 
basic tasks in a working community (SSKJ, 2000). «
Damir Črnčec
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In relation to governance the term leading, a verbal noun of the verb lead, is often 
used. The verb lead has several meanings of which the following are crucial for our 
discussion:
 – To make sure that something works, or that is performed in a certain manner;
 – To be in first position when directing activities of a) a group, community, organi-
zation, b) a working unit;
 – To be in first position when taking decisions on a course of something;
 – To cause, with example or advice, that somebody acts in a certain manner;
 – To make sure or cause that something is achieved (ibid.).
The difference between a traditional leader and manager lies also in the fact that 
the power of a traditional manager derives from the organizational structure. 
Management therefore strives for stability, order and resolution of problems within 
the existing structures, while the power of a leader comes from their personality and 
knowledge. Moreover, leading defends a vision, creativity and changes within an 
organization (Hočevar at al. 2003, p. 148). It is obvious, without any analysis of the 
expert technical literature, that leading is closely associated with governance. We 
can claim that governance is a wider activity on a macro, global and strategic level, 
while leading takes place on a direct, meso- and micro level and is, as such, an op-
erational-tactical activity. Leading essentially encompasses interactions among the 
people and envisages a certain form of hierarchy, while governance does not neces-
sarily require direct interactions among the people that are governed. 
A specific form of leadership or an independent activity, primarily on a micro-meso, 
tactical-operational level, is called commanding. This term is most often used by 
uniformed professionals (armed forces, fire-fighters) and also by various groups. 
SSKJ defines the verb command as »to perform leading, leadership functions in a 
military unit or an adequate institution ... to perform leading, leadership functions in 
a unit, group or to give orders«. The military dictionary defines commanding as the 
»act of leading«, and does not give any special attention to personnel management 
(Vojaški slovar, Korošec T. et al, 2002 p. 343). Contemporary military terminology 
defines command as »authority of an individual in armed forces to direct and coor-
dinate military forces or control over them« (ASVTS6, Furlan T. et al., 2006, p. 54). 
At this point I would like to add that this can be applicable on all levels of command. 
Most often commanding is manifested through giving orders, where a demand to do 
a certain action is expressed; to order means »to express a will that someone must 
do a certain action (SSKJ) «. A synonym of the order can also be a command as a 
»written, oral or signal communication which transfers instructions from superiors 
to their subordinates« (ASVTS, Furlan T. et al., 2006, p. 177).
All the above mentioned definitions reveal that the concepts, such as governance, 
leading, and commanding, are closely correlated and have one common characteris-
tic; decision, decision-taking, which means expressing a will, demand, opinion, wish 
6 Angleško-slovensko vojaški terminološki slovar (English-Slovene Military Terminology Dictionary), Furlan B., 
et al., 2006. Ljubljana: PDRIU.
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how something should be or will be. This context includes also giving and determin-
ing directions. After the demonstration of the ratio between the concepts, which are 
many times used as synonyms in everyday life but not always in expert literature, 
the attention will be focused on a more accurate definition of governance as the most 
important form of expressing will on a strategic level. 
The founder of the contemporary management theory Henry Fayol argues there are 
five functions and 14 principles of management.7 The functions are the following:
 – Forecasting and planning,
 – Organizing,
 – Commanding or directing,
 – Coordinating,
 – Controlling (obtaining feedback information).
Taking decisions on needs and ways to satisfy those needs is called management. To 
manage means to direct or to give sense to something. Moreover, management must 
encompass also implementation of certain actions or activities. Management thus 
consists of two essential elements: an element to determine the course of action in 
order to achieve the pre-set goal, and an element to execute actions which enable the 
pre-set goal to be attained (Brezovšek, 2001, pp. 49 – 60).
A special form of management on a strategic level both, in a public and private sector 
is called governance.8 The public sector often calls it just governance, while the 
private sector uses the term corporate governance. The World Bank defines govern-
ance as »the way... power is exercised through a country’s economic, political, and 
social institutions«.9 The Organization for Economic Cooperation and Development 
(OECD) defines it as »the exercise of political, economic and administrative authority 
necessary to manage a nation’s affairs ... Good governance is characterized by partic-
ipation, transparency, accountability, rule of law, effectiveness, equity, etc«. It refers 
to management of government issues without abuse and corruption and on the basis 
of the rule of law10. As mentioned before, the private sector uses the term corporate 
governance, which refers to »procedures and processes according to which an or-
ganisation is directed and controlled. The corporate governance structure specifies 
the distribution of rights and responsibilities among the different participants in the 
organisation – such as the board, managers, shareholders and other stakeholders – 
and lays down the rules and procedures for decision-making« (OECD).
All of the above considerations clearly state that governance, management and lead-
ership have numerous common characteristics. It is common to all that they have 
7 Fayol, in V. K. Narayanan and R. Nath, Organization theory: a strategic approach, Homewood, Il. Irwin 1993.
The principles are the following: division of work, authority, discipline, unity of command, unity of direction, 
subordination of individual interests to the general interest, (honest) remuneration, centralisation, scalar chain, 
order, equity, stability of tenure or personnel, initiative, esprit de corps. 
8 Governance is a verbal noun of the verb govern which means to: »decide, give orders, particularly in an 
organized social society, especially in a country, and give guidance and directions« (SSKJ, 2000).
9 World Bank's PRSP Handbook, What is governance? http://web.worldbank.org, 21.4.2013.
10 Glossary of statistical terms, OECD, http://stats.oecd.org/glossary, 22.4.2013.
Damir Črnčec
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authority as a right to influence on, decide on and order to either individuals or 
organized social communities regardless of their size or placement into the public or 
private sector. If they were put in the hierarchical relation, governance would be at 
the top and commanding on the bottom. This can be seen also in Table 1. 
At this point we need to place stress on global governance as a special hierarchi-
cal form of leading and governance. Global governance is »management of global 
processes in the absence of a global government (Najam in Riazati, 2006)«. The 
definition offered by the United Nations is much more evident: »Global governance 
can thus be defined as the sum of laws, norms, policies, and institutions that define, 
constitute, and mediate trans-border relations between states, cultures, citizens, in-
tergovernmental and nongovernmental organizations, and the market. It embraces 
the humanity as a whole, trying to bring more predictability, stability when facing 
with transnational challenges—such as climate change and environmental degrada-
tion, nuclear proliferation, and terrorism.«11
The areas that can be placed in the context of the global governance are the following:
 – Environmental issues and governance of the planet,
 – Economy and globalization,
 – Reform of political institutions,
 – Resolution of conflicts, security and peace,
 – Science, education, information science and communications.
PRIVATE	SECTOR PUBLIC	SECTOR DEFENCE/MILITARY
Global level Global governance Global governance Global governance
Strategic (macro) level Corporate governance
Governance/
management
Governance,
leading
Operational (meso) level Leading Leading
Leading,
commanding (also)
Tactical (micro) level Deciding
Deciding,
ordering
Ordering,
commanding
Source: Author's own work.
All these areas can be studied from the global or regional perspective. Global gov-
ernance is not governance in the sense of exerting authority. However, it includes 
numerous elements of governance and is in itself a concept in the international 
relations. When naming global governance in Slovene, we can see the urgency of 
finding a more adequate term which matches the translation and is semantically 
11 UN Intellectual History Project, http://www.unhistory.org/briefing/15GlobalGov.pdf, 22. 4. 2013.
Table	1: 
Governance in 
the private and 
public sector, 
and in the 
defence-military 
area
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suitable. Just like the authority is an integral part of governance, management and 
leading, the essential part of them all is also giving directions, coordination, search 
for feedback information, forecast and planning. All three concepts can be used as 
synonyms on a strategic level, but of course not on a tactical level. Due to specific 
understanding of the term governance in Slovene and on the basis of the analysis I 
assess as suitable to use the terms global governance and corporate governance. I 
can conclude that one of the main pre-conditions for good governance is also ap-
propriate and timely allocation of financial resources, which means that we must 
dedicate more financial resources to what is high on the priority scale. In the sphere 
of leading and commanding, more attention is put on a human factor and direct 
work with people. Only the right combination of both can led to success of any large 
system, let alone a system as complex as the defence one. 
 3 IS GLOBAL ECONOMIC CRISIS REALLY GLOBAL?
International relations are a scientific discipline dealing with a wide range of issues 
relating to the functioning of states, transnational subjects, international and non-
governmental organizations, namely of all bodies that take part in international in-
teractions. Three main theories are traditionally dominant in the field of international 
relations: realism, liberalism and Marxism. However, in the past few years construc-
tivism has been on the rise (Smith and Baylis, 2007, p. 8). The theoretical framework 
of international relations encompasses also other theoretical concepts that are either 
independent or branches of the above mentioned ones. The most well-known are 
the following: neoliberalism, dependency theories, critical theories, etc. From the 
viewpoint of global governance we must emphasize the perception of globalization 
of the key theoretical approaches in international relations. We must first point out 
that all key theories recognize globalization as a fact. The difference lies in the (non)
understanding of its importance and influence on the key social relations and inter-
national (capitalist) relations.
Realists do not perceive globalization as a change in the most important charac-
teristic of the global politics – territorial division of the world into national states. 
Economies are becoming increasingly interdependent as a result of their mutual con-
nections. This, however, is not true for the system of countries which preserve their 
sovereignty. Moreover, the threat of use of force and the significance of the balance 
of power do not diminish. Liberalists see things differently, namely as an end product 
of a lengthy transformation of the global politics. In their opinion globalization un-
dermines the essence of the realistic theory, as the countries are no longer the central 
operators as they used to be. Liberalists are particularly interested in a revolution in 
technology and communications, as represented by globalization. Marxists find glo-
balization exaggerated, as it is only the last level in the development of international 
capitalism. It does not mean a high-quality shift, but further deepens division lines 
between the core, periphery and semi-periphery. Constructivists see globalization 
as an external force which impacts the countries and for which the leaders say it is 
reality they cannot escape. This is a very political stance, as the leaders can co-shape 
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globalization and social movements with the help of contemporary forms of com-
munication, such as the Internet (ibid.).
Regardless of various conceptual aspects of globalization, we can conclude that we 
must be aware of the sole fact of its existence in international relations and act in a 
pro-active manner, as in this way individuals, social groups and countries can impact 
globalization, co-shaping globalization processes. At this point there is no need to 
give in to fate thinking we are too small. With the right level of realism and sobriety, 
this is true also for small countries such as Slovenia. In this context we must also 
explain a term which is very closely associated with globalization and which has 
been around for at least five years. A global economic crisis or, simply, a crisis is »a 
situation in an economy where favourable development conditions start to rapidly 
deteriorate« and an «unfavourable, hard-to-solve situation« (SSKJ). The SSKJ de-
scriptive definition undoubtedly makes it clear that the talk is about a situation which 
is not good. It is therefore good to remember that it is not necessarily so. The Chinese 
sign for a crisis is a combination of the characters for danger and opportunity.12 The 
latter emphasises a positive aspect which is an integral part of any crisis. A crisis is 
therefore a time of danger, insecurity, lack of clarity and predictability, but also a 
time which offers opportunities. Many investors say that a crisis is a time when they 
look for new opportunities to do business and make investments. 
Economic indicators do not confirm the economic crisis. The crisis is global from 
the European/Western point of view. However, the situation is completely different 
in China, India and other developing countries (Table 2). The West has been in 
economic decline for some years or even decades; therefore, the theories about the 
rise of the East and decline of the West are not pure imagination13. At this point we 
can therefore ask the following question: how global is really the global crisis?
All the time we have talked about the global economic crisis, the economic growth 
in Asia has always exceeded six per cent. This has not been true for only the past few 
years, as this trend has been going on since 1995 and, according to predictions, it will 
last until the end of the second decade of this century. On the contrary, developed 
economies have struggled with one or two per cent growth. In 2008, when the GDP 
fall was the biggest, the Euro zone experienced a –4.4% drop, while Asia registered 
almost a seven per cent growth. All these above mentioned considerations make it 
clear that Europe and the West will have to accept the new reality which is associ-
ated also with globalization processes – unfortunately in a way that will not benefit 
us. The crisis has thus mostly affected the Euro zone. What is more, the situation is 
further deteriorating. Slovenia is among the worst countries in the Euro zone. It is 
also one of the two Euro zone countries with a negative growth forecast for 2014. 
12 The word crisis is a combination of the signs for danger and opportunity, in traditional Chinese these are:  . 
13 More on this matter in Črnčec, Damir, Izzivi in priložnosti Slovenije v geopolitičnem in geostrateškem okolju 
21. Stoletja, in Izzivi moderne države (edited by M. Avbelj), Brdo pri Kranju 2012, pp. 33-66.
GOOD GOVERNANCE OF DEFENCE SYSTEMS IN GLOBALIZATION ERA
 62 Sodobni vojaški izzivi/Contemporary Military Challenges
Global	GDP Developed	
economies
Euro	zone Developing	
countries
Asia Slovenia
1995–2004 3.6% 2.8% 2.2% 4.9% 7.1% 4.0%
2006 5.3% 3.0% 3.2% 8.3% 10.4% 5.8%
2007 5.4% 2.8% 3.0% 8.8% 11.6% 7.0%
2008 2.8% 0.1% 0.4% 6.1% 7.9% 3.4%
2009 –0.6% –3.5% –4.4% 2.7% 6.9% –7.8%
2010 5.2% 3.0% 2.0% 7.6% 9.9% 1.2%
2011 4.0% 1.6% 1.4% 6.2% 8.1% 0.6%
2012 3.2% 1.2% –0.6% 5.1% 6.6% –2.5%
2013* 2.9% 1.2% –0.4% 4.5% 6.3% –2.6%
2014* 3.6% 2.0% 1.0% 5.1% 6.5% –1.4%
*Forecast
Source: IMF World Economic Outlook, October 201314
Only a short walk through a theoretical aspect and conceptual apparatus associated 
with globalization, global governance and operations can enable a discussion and 
analysis to determine where Slovenia actually is. A young country still struggling 
with numerous after-birth difficulties and challenges, yet a member of the European 
Union and NATO. The Slovenian economic crisis is an integral part of the Euro zone 
crisis, but certainly not of the global crisis, as the latter does actually not exist from 
the non-Western perspective. Slovenia is, as a result of developments around us and 
particularly because of us, in a very bad economic situation. When in 2009 the GDP 
fall in the Euro zone was 4.4%, it was almost about eight per cent in Slovenia. In the 
following years when the GDP in the Euro zone started to recover, it was about zero 
in Slovenia. In 2012 it fell by 2.5% with a forecast of a further decrease by 2.6% in 
2013 and by 1.4% in 201415. If the forecast for 2013 comes true, the Slovenian GDP 
will fall to the 2007 level, meaning it will decrease by 2.5 billion Euros if compared 
to the peak in 200816. As demonstrated by the figures in Table 2, Slovenia has been 
doubly affected by the global economic crisis; firstly, as a member of the European 
Union which, as such, is still struggling with the crisis and, secondly, as one of the 
European Union members mostly affected by the crisis, the same as Greece, Spain, 
Portugal, Ireland, Italy and Cyprus. Economic inefficiency of Slovenia as a country 
has a tragic impact also on the financial resources allocated for defence purposes 
that are far from two per cent of GDP, which was a political commitment of Slovenia 
upon its entry into NATO. 
14 Modified for the Table, see http://www.imf.org/external/pubs/ft/weo/2013/02/pdf/text.pdf, 24. 10. 2013. 
15 According to the latest information of the IMF, October 2013, www.imf.org.
16 In 2008 the Slovenian GDP amounted to 37.135 billion euros, www.stat.si. 2008 was also the last year in which 
the budgetary revenue was 0.2% higher than expenditure. 
Table	2: 
Changes in 
global and 
Slovenian GDP
Damir Črnčec
 63 Sodobni vojaški izzivi/Contemporary Military Challenges
 4 ON DEFENCE SYSTEMS AND EXPENDITURE
At the beginning allow me to explain what the defence system actually is. The 2010 
Resolution on the National Security Strategy of the Republic of Slovenia defines the 
Slovenian defence system in line with the contemporary understanding of defence 
systems. The defence system encompasses a spectrum of political, normative, organ-
izational, military, personnel, material-technical, intelligence-security, information-
communication, development-research, educational and other activities organized by 
the state with an aim to ensure efficient defence. It consists of two components: the 
Slovenian Armed Forces as the authority responsible for military defence and devel-
opment of military capabilities, and the non-military part of the defence system re-
sponsible for development and implementation of defence policy, provision of con-
ditions for operation of the entire defence system, provision of non-military capa-
bilities in support of the Slovenian Armed Forces and allied forces, and preparations 
and measures for defence purposes of the country and for functioning of the defence 
system in crisis situations.17 The defence system as such does not include the field 
of protection and rescue which is placed within the third sub-system of the National 
Security System of the Republic of Slovenia called the System of Protection against 
Natural and Other Disasters.18 
Protection and rescue costs do not fall into the category of military expenditure. In 
the case of Slovenia military expenditure covers the budget of the Defence Ministry 
and Slovenian Armed Forces, and the costs of military pensions which are, however, 
a different budgetary item. This definition of the military expenditure is in line with 
the definition of the Stockholm International Peace Research Institute (SIPRI). 
The SIPRI definition includes all expenditure of military forces, and particularly of:
 – The armed forces, including peace keeping forces,
 – Defence ministries and other government agencies engaged in defence projects,
 – Paramilitary forces when judged to be trained, equipped and available for military 
operations, and 
 – Military space activities.19
The contemporary changed global security environment, in addition to transnation-
al threats as defined by the 2010 Resolution on the National Security Strategy20, 
17 Through the implementation of activities which contribute to the defence of the country, other national 
authorities, local community bodies and civil society organisations of particular importance for defence are 
also included in the defence system (Resolution on the National Security Strategy of the Republic of Slovenia, 
2010).
18 The third sub-system is called the Internal Security System. Slovenia is one of the few countries whose Defence 
Ministry includes the protection and relief area. This field is usually either part of the Interior Ministry, or it is 
an independent ministry or a government office.
19 See www.sipri.org, http://www.sipri.org/research/armaments/milex/measuring-military-expenditures#defining-
military-expenditure, 20. 8. 2013.
20 Resolution on National Security Strategy of the Republic of Slovenia (ReSNV-1), Official Gazette of the RS No. 
27/10. 
GOOD GOVERNANCE OF DEFENCE SYSTEMS IN GLOBALIZATION ERA
 64 Sodobni vojaški izzivi/Contemporary Military Challenges
increases the military-security lack of predictability21 as a result of the global 
multipolarity. Until the end of the 1980s when the world was divided into two blocs, 
the world of two superpowers was more or less globally balanced. The wars that 
broke out were under sole »control« of one of the superpowers. However, when this 
balance fell apart, leading to asymmetry22 of global conflicts, the lack of predictabil-
ity became one of the risk factors also on the global level. 
Rank
Country
Spending	in
2012	($	billions)
Changes	(%) Share	of	GDP	(%)	x
2012 2011 2011-12 2003-12 2012 2013
1 1 USA 682 - 6.0 32 4.4 3.7
2 2 China (166) 7.8 175 (2.0) (2.1)
3 3 Russia (90.7) 16 113 (4.4) (4.3)
4 4 UK 60.8 - 0.8 4.9 2.5 2.5
5 5 Japan 59.3 - 0.6 - 3.6 1.0 1.0
6 5 France 58.9 - 0.3 - 3.3 2.3 2.6
7 8 Saudi Arabia 56.7 12 111 8.9 8.7
8 7 India 46.1 - 0.8 65 2.5 2.8
9 9 Germany (45.8) 0.9 - 1.5 (1.4) 1.4
10 11 Italy (34.0) - 5.2 - 19 1.7 2.0
11 10 Brazil 33.1 - 0.5 56 (1.5) 1.5
12 12 South Korea 31.7 1.9 44 2.7 2.5
13 13 Australia 26.2 - 4.0 29 1.7 1.9
14 14 Canada (22.5) - 3.9 36 (1.3) 1.1
15 15 Turkey xx (18.2) 1.2 - 2.1 2.3 3.4
 World 1 753 - 0.5 35 2.5 2.4
( ) = SIPRI assessment
x  Military spending figures in percentage of GDP are based on the International Monetary Fund (IMF) data of 
October 2012.
xx  the United Arab Emirates may have been ranked the fifteenth; however, there is no available data for the UAE 
in 2012.
Source: SIPRI nahttp://www.sipri.org/research/armaments/milex/Top%2015%20table%202012.pdf,25.4.13
21 More on defence-military aspects in D. Črnčec, Izzivi in priložnosti Slovenije v geopolitičnem in geostrateškem 
okolju 21. stoletja, in Izzivi moderne države (edited by M. Avbelj), FDŠ, Brdo pri Kranju 2012, pp. 33–66.
22 More thoroughly on asymmetry and conflicts in D. Črnčec, D. Guštin and U. Svete, Asimetrija in nacionalna 
varnost: od zgodovinskih izkušenj do sodobnih izzivov, Defensor, Ljubljana 2011.
Table	3: The 
15 countries 
with the 
highest military 
expenditure in 
2012
Spending figures 
are in US$, at 
actual prices and 
exchange rates. 
The figures 
of changes 
are calculated 
from spending 
at permanent 
prices in 2011.
Damir Črnčec
 65 Sodobni vojaški izzivi/Contemporary Military Challenges
At this point I would like to, with regard to defence-military issues, emphasize a 
unique asymmetry we can witness in today's world. The costs of military expendi-
ture as defined by SIPRI23 are 2.5% of the global GDP. In 2003 this figure amounted 
to 2.4% of the global GDP. Particularly striking are the following data from Table 
3: China increased its military spending by 175%, Russia by 113%, Saudi Arabia by 
111%, India by 65% and Brazil by 56%. On the other hand, the Western statistics are 
as follows: Canada and the United States increased their military spending by 36%, 
Australia by 29% and the United Kingdom by 4.5%. Italy decreased its military 
spending by 19%, France by 3.3%, Germany by 1.5% and Japan by 3.6%.24 A short 
analysis of these data shows that in the past ten years the costs of military expendi-
ture have increased by 0.1% of the global GDP. If speaking of military spending 
as equivalent to 2.5% of the global GDP, the expenditure has increased most in 
non-Western countries and the least (or they even decreased) in western European 
countries, including Slovenia. Nevertheless, 58% of the expenditure is spent by the 
United States, western and central Europe, which means a decrease from 60% in 
the peak years of 2008 and 2009. China is increasing its defence expenditure and 
developing global-range capabilities. In April 2013 the media reported that after 
launching its first aircraft carrier in 2011, China started to construct a new one.25 
Aircraft carriers are ships that are not intended for coastal defence. They are deep 
waters ships and represent global military resources. The highest number, ten, is 
possessed by the United States. 
After the end of the Cold War, Europe started to gradually reduce the size of armed 
forces. This process was accelerated by the beginning of the global economic crisis 
which is most evident exactly in Europe. At this point the term disarmament would 
not be the most appropriate to use; however, if this trend continues, this is exactly 
what will happen. Although cumulative figures are still quite high, the percentage of 
GDP allocated for defence purposes is decreasing. For some time this fact can still be 
justified with an excuse that Europe perceives the military threat as reduced, which 
is stated also by the Slovenian National Security Strategy. However, it is not neces-
sarily so. Numerous armed conflicts in the past two decades at the EU borders have 
proved quite the opposite. The Balkans area is still a powder keg although not to the 
extent it used to be, the Mediterranean is in either a latent or open (Syria) conflict, 
while the Caucasus Mountains continue to require careful monitoring. International 
interventions in Iraq and Afghanistan were conceptual experiments how to solve a 
conflict starting from its roots. The success of this concept will be discussed for quite 
some time. 
Upon their entry into NATO in 2004, Slovenia and six other new member states 
undertook to increase their defence expenditure to two per cent of GDP. However, 
Slovenia did not increase them. What is more, it drastically decreased them so that 
23 Stockholm International Peace Research Institute, the Swedish independent research institution which, among 
other things, is engaged also in global security issues. 
24 The 15 countries with the highest military expenditure in 2012, www.sipri.org, 25. 4. 2013.
25 China building new aircraft carrier (Kitajska gradi novo letalonosilko, Večer, 25. 4. 2013).
GOOD GOVERNANCE OF DEFENCE SYSTEMS IN GLOBALIZATION ERA
 66 Sodobni vojaški izzivi/Contemporary Military Challenges
in 2012 they amounted to only a good percent of GDP26. The forecast for 2013 
and 2014 predicts a further decrease to between 0.8 and 0.9% of GDP. The ratio 
between the costs of the personnel, operational activities and acquisition of new 
equipment is dramatic. Almost 85% of the resources are allocated for the personnel 
and less than five per cent for acquisition of new equipment. At this point a question 
arises whether the defence system allowing such unprofessional anomalies is well 
governed. However, the things are, of course, not as they seem. Under the existing 
financial circumstances the defence system is a vegetating system. It is a system in 
need of an efficient shock therapy and establishment of a professionally sustainable 
situation and ratio between the financial resources allocated for the personnel, opera-
tional activities and equipment. 
The proposal how to tackle defence priorities with available resources focuses on 
the following four main points: a new review of ambitions and priorities; continua-
tion of reforms in the Slovenian Armed Forces; development of new starting-points 
for negotiations with NATO on new capability goals; and regulation of the crisis 
management system and civilian capabilities provision (Garb, 2012, p. 72). The 
proposal aims to find a solution to defence issues, starting with good governance 
of the defence system. In the process of further optimization and rationalization 
we must also address the issues relating to the environment in which the defence 
system operates. Our reasoning must therefore stem from the fact that integration 
is urgent within both, the defence and interior structures. The integrated defence 
structure on one side and the internal security structure on the other should then be 
optimally and rationally integrated. However, integration of these two structures 
is impossible for numerous expert-level reasons. As the key reason I would like to 
emphasize the fact that the political system in a still young Slovenian democracy 
could not handle this, as such organization would overly resemble the organization 
of security structures in totalitarian countries. Besides, Slovenia has already had 
such experience. Radical reforms of the defence and security system are, and will 
be even more, urgent. Their legitimacy must be ensured through a public expert 
and political discussion, and later on through a wide support when adopting new 
legislative solutions. 
This short discussion is an introduction into understanding of a phenomenon that in-
fluences an individual operating in the defence-security sphere of a globalized world. 
Understanding of the basic conceptual apparatus and establishment of a semantic 
common denominator are of key importance when starting to study complexity of 
global processes and understanding the role of governance and operations. Regardless 
of who is big or small, reach of poor, we are all faced with globalization here and now. 
Understanding of this phenomenon enables individuals to take advantage of available 
opportunities and, at the same time, to avoid obstacles. The global economic crisis 
is not a crisis in India, China or most developing world countries. It is a Eurocentric 
view of the global economic situation in which the West is losing the position it held 
26 Detailed information is available in Garb, 2012.
Conclusion
Damir Črnčec
 67 Sodobni vojaški izzivi/Contemporary Military Challenges
at the beginning of the industrial revolution. Globalization, economic interdepend-
ence, informatisation and telecommunications have accelerated economic growth in 
developing countries. An important factor of the economic growth is also good gov-
ernance and operations in relation to political stability. China and India can set an 
example for all the countries to see how important political stability and understand-
ing of the need for good governance are. 
Namely, global governance starts with ourselves, with our operation and perfor-
mance in a micro-environment. Good governance on a micro-level can then serve 
as a good companion on the path towards inclusion in the processes on a macro and 
global level. This is true for each and everyone of us as well as for the country. Good 
governance, that is governance on a micro level, intra-governance, is a pre-condition 
for successful external, extra-governance on a macro, global level, whereas an ability 
of our own intra- and extra-governance depends on the ability to take decisions. 
However, this ability decreases with increasing indebtedness of the country and its 
external unreliability resulting from unusual actions of its managers.
Governance of defence systems as a special skill or science is something that 
needs to be built, upgraded and cherished. Firstly, it is an area whose scientific 
research needs to be expanded and deepened. We must make sure that knowledge 
and findings do not remain captured in academic classrooms, but that they become 
available also to key decision-makers and governors. Academics and practical 
governors must then make sure that their experience and findings are regularly 
exchanged and upgraded. Secondly, the public discussion must stem from the fact 
that Slovenia is an independent and democratic state governed by the rule of law, 
which draws its power from the referendum will of its people that opted for an in-
dependent country. Thirdly, thorough discussions on urgent reforms in the defence 
and security area are and will continue to be required also in the future. The results 
must be concrete proposals on how to proceed. We must begin with the fact that 
integration is urgent within both, the defence and interior structure. The integrat-
ed defence structure on one side and the internal security structure on the other 
should then be optimally and rationally integrated. Fourthly, we must start from 
the wider Euro-Atlantic framework of which we form an integral part. Let us not 
reinvent the wheel. Let us not discuss how to transform the army into the police or 
the other way around. Such practices do not exist, as neither democracy nor com-
parative foreign practice can handle them. Besides, putting the blame on financial 
optimization is only a cheap excuse. And, lastly, the search for a wider social 
and political consensus on the urgent basic reforms in the defence and security 
area is the only right and possible way forward. Let us not discuss whether this is 
necessary. A modest contribution of this article proves we have already outgrown 
this discussion. We must stop the slow death of the police and army, and find the 
right solution for at least a decade or two. The debate must begin and end with 
a thorough discussion on good governance on all levels of defence and internal 
security structures.
GOOD GOVERNANCE OF DEFENCE SYSTEMS IN GLOBALIZATION ERA
68 Sodobni vojaški izzivi/Contemporary Military Challenges
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Damir Črnčec