Israel, Know Thy Neighbors' Defense Budget

In 2012, Israel’s defense spending was 50% larger than those of its immediate neighbors - combined. Maybe we can ease off a little.

Every time the defense establishment needs to fend off budget cuts, very little thinking needs to be done. After all, the main slogan in this campaign was written thousands of years ago in the Passover Haggadah: “In every generation they rise against us to destroy us, and the Holy One, blessed be He, saves us from their hand.”

In modern times, now that God’s redeeming qualities have been devolved, funds flow easily to the army and the other “security departments.” How much money is enough? When will it be possible to say: “Even if they come to destroy us, we’re ready”?

Until fairly recently, this issue was strictly taboo in Israel. The army just mentioned a sum and got it. But over the past two years, the people have shown that they’re no longer willing to suck it up when it comes to the defense budget. The subject has ceased to be taboo, and even politicians have started talking about cutbacks and the need to keep an eye on expenses.

These politicians and the people want to know the exact cost of the pensions and salaries of defense personnel, and the value of career soldiers’ retirement packages. This discussion is crucial for Israel’s economy because the commitments to the defense establishment’s pension funds are estimated at NIS 260 billion - a retirement package between NIS 4 million and 10 million for each pensioner. This is Israeli taxpayer money that will also go to noncombat career soldiers who retire at 45 and often begin a second career.

But the debate on the defense budget needs to go beyond simple bookkeeping. The public and the politicians also need to look into the national security company’s competition environment, as it were. What’s happening with our enemies, both next door and a bit farther away? What’s their economic and military situation? What are their capabilities now, and what will their capabilities be in the future?

This is actually a discussion about the Arab countries’ economies, but this debate hasn't even begun in Israel. Each of us knows vaguely that life in the neighboring Arab countries is no great bargain. But who has any idea about Jordan’s economy, Egypt’s growth rate or unemployment in Syria and the Palestinian Authority?

Many of us know a lot about the U.S. economy, the crisis in Europe and the awakening Chinese giant. But we know nothing about the Arab countries around us, whose statistics we should know by heart as part of a basic policy of “know your competitor.” If that’s the case, how can we craft the defense budget and know whether we can leave something for civilian spending?

The August edition of TheMarker magazine tries to provide some of the answers to these questions, which must be part of the public debate on the defense budget. In the cover article, Nathan Lipson reports that as recently as 2012, Israel’s defense budget was 50% larger than those of its immediate neighbors - combined. Israel spends 6.2% of gross domestic product on defense, while Jordan spends 4.6% and Egypt only 1.7%.

Looking forward at the Arab countries’ economies and the challenges they will be facing over the next few years, we can bet that the gap between the money we spend for war will grow rapidly relative to the money and capability that our “competitors” around us can afford.

How far can it go? And is there any chance the Arab states will emerge stronger from the Arab Spring? Read about it in the August edition.

AFP