Israeli Military Not Immune to Budget Cuts

April 21, 2014

I apologize for taking such a long break from posting on this blog. Between my work on the Hill, trying to write a book, and keeping some semblance of a social life, things kind of got away from me. I’ll try to do better.

Much has been made of the United State’s military downsizing due to budget constraints, and the ripple effects of less U.S. spending are being felt in far off places. An example is Israel’s specialized Army corps.

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Corps-specific agendas for Israel’s Defense Forces have been scuttled in recent months in favor of more traditional support roles. This reassessment in priorities has kept Israel’s Artillery and Armored Corps (to name only two) from mission creep.

Israel is determined to protect RDT&E (research, development, test, and evaluation) spending with a push for bigger risk-taking.

In order to protect technology, Israel will invest in a few big bets. Look for Israel to modernize some existing weapons and equipment. However, the real goal will be to move beyond marginal improvements – to replace existing programs with new technologies and strategies. Due to the continued deterioration in Syria, Iran’s quest for the bomb, and Hamas trying to grow its influence, Israel has to take this moment as an opportunity to skip a whole generation of technology.

Israel’s government has come to the conclusion that their current structure of military spending is not sustainable.

These budget constraints come three years into an age of austerity in Western military spending. Some analysts expect these spending cuts to result in a new wave of mergers and acquisitions in the defense industry like the one that followed the end of the Cold War.

Western defense industries emerging from the Cold War experienced a reset in customer’s expectations. In the United States, the industry quickly consolidated into a half dozen premier contractors. While in Europe, consolidation was slower, but it produced a dozen or so premier transnational firms. These consolidations were a direct result of defense ministries being concerned about the costs of overcapacity in the wake of shrinking budgets.

Today, the focus is on the shrinking technological advances of the West.

Western governments are now investing in advanced computing, robotics, biotechnology, and nanotechnology. This change in focus will allow Western defense companies to maintain financial strength which will result in more strategic choices. We are already seeing evidence for some of these choices through advancements in cloud computing, big data analytics, and robotics.

Israel has a small population and an exceptional level of threats. Over the years, its ratio of RDT&E spending and procurement has risen and fallen, reflecting the relative priorities of immediate needs and investment for the future.

Israel’s future military spending will continue to be dictated by its threats. Hamas, the militant Muslim authority in Gaza that rejects Israel’s right to exist, has been maneuvering for control over the largely secular Fatah organization administering the Palestinian Authority in the West Bank. Hamas is currently restrained in Gaza, but it is trying to translate its vision into a plan to dominate Palestinian society in the West Bank.

According to the latest U.S. Central Intelligence Agency (CIA) estimates, there are nearly 2.7 million Palestinians living in the Israeli-occupied West Bank. The Israeli government can no longer count on the convenience of ambiguity to stave off critics and competing constituencies. Israel will have to chose a path for preserving its character as a Jewish and democratic state while opening the door for a two-state plan.

If Palestinian hopes and expectations continue to go unrealized, the frustration will only strengthen Hamas’ hand.

In Syria, rebels fighting the Assad regime keep attempting to change the military balance of power. The Syrian government has been bolstered by its foreign supporters, and to combat this, the al-Nusra Front, an al-Qaeda affiliate, is using porous borders to smuggle arms, supplies, and fighters into and out of the country. This continued spilling over of conflict into Syria’s neighbors in real-time has been a destabilizing force in Israel and a distraction.

Despite Western claims of progress in slowing Iran’s nuclear ambition, there are few signs the Iranian government is conditioning its citizens for any major limitations on nuclear work. Thousands of scientists and engineers are employed at a growing number of nuclear facilities in cities including Isfahan, Natanz, and Qom. Iranian President Hasan Rouhani and Foreign Minister Javad Zarif have advanced their careers by championing Iran’s nuclear rights as diplomats on the international stage. More importantly, Iran’s nuclear-fuel infrastructure has grown too vast in recent years, and the international community’s willingness to maintain expensive sanctions on Iran appears limited. Iran’s nuclear quest has Israel planning for military contingencies that carry big risk-taking, and they will no doubt require the new technologies and strategies that Israel is developing.

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