Direct and indirect defense costs totaled NIS 10 billion. Civilian costs amounted to NIS 4 billion.
The intifada and expanded operations by the IDF and security forces in the West Bank and Gaza Strip caused a substantial increase in direct and indirect defense spending to an estimated NIS 3 billion this year. A planned NIS 2 billion cut in the defense budget was also cancelled. These costs come on top of the NIS 7 billion in defense spending in 2000-01.
The IDF spent about NIS 1.5 billion on Operation Defensive Shield in April 2002, in the aftermath of the Passover bombing of the Park Hotel in Netanya. Another NIS 500 million was spent on protective measures and defense of communities along the seam line. Civilian costs from terrorist attacks and incidents are estimated at NIS 4 billion, including large reinforcements for the Israel Police, and payments to victims of the terrorist attacks and hospitalization costs.
Officials in Jerusalem estimate that were it not for the intifada, the steep cuts in National Insurance Institute payments could have been avoided, and the ut civilian public consumption (education and health services and local authorities) could have been smaller, or such spending could even have been increased by 2.5% a year.
The intifada has caused Israel’s worse and longest recession in its history. Previous recession lasted only two years: 1952-53; 1966-67, and 1988-89. There are now initial signs of GDP growth, but not yet of a recovery.
Published by Globes [online] - www.globes.co.il - on June 4, 2003