Israel Shells Out Almost a Fifth of National Budget on Defense, Figures Show

State spending is more than six times what industrialized nations and Arab countries drop, on average; in 2011, defense cost the Israeli economy about NIS 66.8 billion – more than 50% on salaries.

Almost a fifth of Israel's budget went on defense in 2009, according to a new report. The country is spending far more than other industrialized nations on security, with over half those costs going on salary expenses.

Israel also spends proportionally more on defense than any other country in the Middle East. That's according to a Central Bureau of Statistics report published this week, surveying Israel’s defense expenditure between 1950 and 2011. Even Turkey and Iran, which consider themselves military powerhouses, spent proportionately less.

For the sake of comparison: In 2009, Israel spent 6.7% of its gross domestic product. The United States, meanwhile, spent 5% of its GDP on defense; Britain 2.8% and Germany 1.2%. In Kuwait, defense spending amounted to 4% of GDP that year, in Jordan 5.6% and in Egypt 22%; Iran spent 2.3 percent of its GDP on defense and Turkey 1.4%.

Put another way, Israel spent a whopping 18.7% of its national budget on defense, while Britain spent 5.8%, Germany 3.6%, Jordan 14.8%, Egypt 6.3%, Iran 7.9% and Turkey 3.7%.

For a state and its citizens, of course, the government’s outlay on defense has a significant bearing on the quality of life, since more money for defense means less for other needs such as education, health, welfare and infrastructures.

The data in the CBS report are not identical to Defense Ministry figures, since the CBS definitions differ from those of the Finance Ministry. For example, the statistics bureau has a category called The Cost of Defense to the Israeli economy and another called Expenditure for Defense Consumption. The two do not overlap.

In recent years Israel’s defense spending has been growing by leaps and bounds – in increases of about NIS 4 billion a year.  In 2011, the cost of defense to the Israeli economy amounted to some NIS 66.8 billion, as compared to NIS 64.4 billion in 2010 and NIS 61.5 in 2009.

What are we paying for?  Defense costs are divided each year into two parts: labor costs (salaries) and other expenses (net). In 2011, labor costs accounted for more than 50% of total defense spending – NIS 35.7 billion, while the other expenditures amounted to NIS 31.2 billion.

That same year, Israel spent about NIS 54.1 billion on defense consumption, as compared to NIS 52.2 billion in 2010 and NIS 50.1 billion in 2009 (respectively, 6.4%, 6.2% and 6.6% of GDP).

The CBS notes that the overall cost of defense is about 20% more than the outlay for defense consumption. This amounted to 7.7% of GDP in 2011, as compared to 7.9% in 2010 and 9.6% in 2000.

Still, on the bright(er) side, the report emphasizes the fact that the level of defense spending during the period 2009-2011 was about 20% lower than it was between 1973 and 1975 - the period of the Yom Kippur War and its aftermath, when spending reached a record level.

Defense spending increased in the years between 1956 and 1975 at a rapid pace – on average by 15% to 16% annually, especially in war years. For example, in 1967, at the time of the Six-Day War, defense spending increased by 77%.

Spending on defense hasn’t always gone up though. Between 1975 and 1995, real expenditure on defense decreased by 2% to 3% annually. In 1996, an upward trend began which continued until 2002. In the severe economic crisis of 2003-2004, the outlay on defense decreased by 6% annually, but the trend reversed itself and only went down again in 2009.

Between 1967 and 1972, defense spending accounted for 21% of GDP. In 1973-1975 it soared to a peak of 31% of GDP.

IDF Spokesman