IDF's future vision mired in budgetary uncertainty

Aviv Kochavi

IDF Chief of Staff Aviv Kochavi's multi-year budget plan is being hampered by the political situation.

The declaration by Prime Minister and Minister of Defense Benjamin Netanyahu last week about the need to increase the defense budget by NIS 4 billion every year, caused quite a few raised eyebrows among professional staff in the Ministry of Finance, and not for the first time. Netanyahu's vision is not new; it is part of his 2030 defense concept, which he presented to the cabinet last summer. According to this concept, Netanyahu wants Israel's defense budget to be fixed at 7% of GDP.

Behind these statements, however, is an attempt to put "urgent" security issues at the top of the agenda in order to put pressure on the Blue and White Party to agree to a unity government.

According to Netanyahu's formula, the 2020 defense budget will be NIS 76 billion, not including $3.8 billion in US military aid. According to the Ministry of Finance, it is completely unclear who will pay for the budget increase that the prime minister is talking about.

Waiting for a government in order to make a defense budget

These contradictory messages are coming on top of the general uncertainty characterizing the attempts by the IDF and the Ministry of Defense to draw up the next defense budget and a new multi-year plan for the army.

The Gideon plan according to which the IDF has operated for the past five years will expire at the end of this year. One of the first measures taken by IDF Chief of Staff Aviv Kochavi on assuming his position this year was to draw up the next plan - Tnufa. In Kochavi's vision, Tnufa is designed as a supplementary layer for Gideon, maintaining the continuity of measures begun in the plan that accompanied the term of former IDF Chief of Staff Gadi Eizenkot. These things, however, are complicated. Two major scenarios highlight this matter. In the first, and optimistic one, a government is formed and passes a budget in the first quarter of 2020 that includes the defense budget, in which the chief of staff also puts the Tnufa plan on the table.

For the chief of staff, meeting the crowded timetable is no problem. Tnufa is in the final planning stages, and contains elements and measures that will be milestones towards moving the IDF into the next decade. At the same time, there is another problem - a budgetary one. Without any connection to the prime minister's declarations, approval of Kochavi's plan requires the addition of several billion shekels to the annual IDF budget, which totaled NIS 38 million from the total defense budget during the years of the Gideon plan.

The second, pessimistic scenario, there is no government, no budget, and a third election campaign in less than a year. In such a situation, all of the state's systems will have to operate on the basis of the 2019 budget divided by 12, with the addition of linkage to the interest rate. In this situation, the chief of staff will have to make do with much less, i.e. to preserve what there is. Under this scenario, the IDF will operate next year without the Tnufa plan.

Military sources say that the materialization of such a scenario means that the army will shift to a model of the essential and possible minimum - maintain its core operational activity, while giving up or postponing measures that in the current situation are likely to be regarded as luxuries, even if the measures involve development of systems or attaining capabilities that will be significant strategic assets for the coming years.

In this situation, the IDF's goal will be first and foremost to maintain its existing capabilities as a response to scenarios that are likely to occur: another round of fighting in the Gaza Strip; continuation of the campaign between wars to the point of extreme escalation, leading to war in the north; continued attacks against Iran's efforts to consolidate itself in Syria, and according to foreign reports, in Iraq also; and continuation of the efforts to thwart Hezbollah's precision missiles project in Lebanon.

Were the political system in a healthy state, Kochavi would already have put the Tnufa plan, drawn up by dozens of work teams that he founded, on the government agenda this past summer. The plan is centered on measures that according to Kochavi's vision will make the IDF more deadly, effective, innovative, and capable of achieving victory. The chief of staff unveiled this vision when he entered his position, and some weeks later, he already sent the members of the general staff forum for three days of brainstorming to discuss ways of defeating the enemy in a future military conflict. These discussions, referred to in the IDF as a "victory workshop," took place following the changes that occurred in the recent decades in the theaters of warfare of interest to the army.

The way to realize the vision led by Kochavi is by substantially beefing up the land forces, while expanding procurement of Merkava tanks, Namer AFVs, and Eitan light AFVs for use by IDF infantry units. In addition to stepping up the pace of procurement of armored vehicles with improved survivability on the future battlefield, Kochavi is also interested in a strong cyber corps, further development of capability for hitting targets rapidly and precisely, the establishment of a fighting methods and innovation division, and the founding of the first multidimensional unit of its kind that will organically integrate infantry, engineering, anti-tank, airborne forces, and intelligence. This unit will be a prototype for similar units to be established in the army in the coming years, and will help achieve clear and quick victories in the rounds of fighting to come.

The problem is that all of these plans bear costs that will increase the IDF's budget by several billion shekels a year.

The chief of staff's original plan was to have the Tnufa plan approved already in July this year. In the absence of a clear timetable for the political system even after the September elections, more and more voices are casting doubt on the practicality of launching Tnufa, even in 2020.

Even if the Tnuva plan gets underway, it will not happen before the spring. "This delay is definitely not a good situation," a senior Ministry of Defense source warns. "Development plans and force build-up measures are always a race against time to meet some need. What does not happen in 2020 may not happen in 2021 or 2022, because the threats change, and the solutions needed for them change accordingly."

If there is not government for several more months, Kochavi is liable to find himself with a year in which his vision is not realized. "In this situation, what is done is what is easy, and that is the big danger," a senior Ministry of Defense source says, adding, "Difficult budgetary constraints cause smart people to make mistakes. This situation is unhealthy for the army the Ministry of Defense, the Ministry of Finance, and the country."

Formation of a government also does not guarantee money for a multiyear defense plan

There is also a third scenario. Even assuming that the 22nd Knesset sworn in last week lasts, and the question of who will be the next prime minister is finally settled, the IDF commanders and the Ministry of Defense heads have a long procedure ahead of them with the Ministry of Finance's professional staff, which expects streamlining and cutbacks in the defense budget.

How can this be squared with the IDF's expectations that billions of shekels will be added to the defense budget in the coming years? According to the Ministry of Finance's logic, the billions that will be saved in one place will be used to fund the army's needs in another place. For the Ministry of Finance, implementation of the second step in the Ben Bassat committee's recommendations, in which men's compulsory military service is to be shortened from 28 months to 24 months, is a significant step in the right direction. The Ministry of Finance estimates that every month by which compulsory military service is shortened will increase annual GDP by NIS 1.3 billion.

The Ministry of Finance will also demand offsetting of up to one third of the pensions of IDF and other defense forces pensioners who have begun second careers. The Ministry of Finance believes that this offsetting will save up to NIS 250 million.

The Ministry of Finance also believes that several hundred million shekels more can be saved in the cost of the army's regular activity through energy saving, selling real estate properties, outsourcing, etc.

In any case, it is doubtful whether the army will accede to the Ministry of Finance's demands. At least with respect to shortening compulsory military service, military sources make it clear that they will oppose this, because they say that it will detract from the army's fitness and readiness for war.

Published by Globes, Israel business news - en.globes.co.il - on October 7, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Aviv Kochavi
Aviv Kochavi
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