• Defense expenditures planned for Personnel and Equipment are close to optimal, but Infrastructure-related expenditures, at over 9% of the defense budget, are evidently too high, and at the expense of Equipment(in most NATO countries defense expenditures in infrastructure are under 3%). • Expenditures related to“Training and Exercises” remain low and cannot be easily tracked under the large category of“Goods and Services”. • Among other considerations, the above problems are consequences of the fact that the defense management system(PPBES) remains unconsolidated. Consequently,“budgeting” continues to impose its decisions, which lack strategic, long-reaching objectives. On the other hand, the AAF suffer from the lack of experience and absence of the managers’ corps, mastering both operational and financial skills. • The above shortcomings have caused certain supporting units and services, such as air defense, bacteriological and nuclear protection, reconnaissance, are missing in the AAF, while some others, such as field artillery, medical and engineering support, chemical protection, seem to be insufficient. Subsequently, the respective specialties and skills are diminishing as well. • Despite recent measures undertaken by the government to increase military wages and other personnel benefits, it seems that the AAF remains unattractive to qualified newcomers. As such, a number of units, including some priority ones, remain short-staffed. • The AAF are considered the first and(sometimes) only responder in case of civil emergencies, while all expenditures for the Albanian Civil Emergency Agency are being borne by the defense budget, a bill that consists of about 7.5% of the whole defense budget. Recommendations • The Albanian defense resource management system(PPBES) should become fully operational at all levels and should guide“budgeting” in funding priority capabilities and units, allowing the AAF to fulfil their constitutional mission. • A successful PPBES implementation requires, among other things, building and consolidation of the managers corps at all AAF levels. They should master both operational and financial concepts and skills, while high political and military leadership in the AAF should grant them the necessary authority to fulfil their tasks. BUILDING AND MAINTAINING OPERATIONAL MILITARY CAPABILITIES IN ALBANIA IN THE FACE OF CURRENT AND EXPECTED SECURITY CHALLENGES | 10