Israel struggles to scale down soaring military costs

Israel's defense establishment, bluntly informed by the government that it is too big, is pondering how to scale back down from Goliath to David while the enemy is still at the gates.

Long sacrosanct in public opinion, the military has come under unprecedented attack in recent weeks for opposing cutbacks in next year's defense budget despite a tailspinning economy.

"The state has an Army and not the other way round," snapped Finance Minister Yigael Hurwitz last month as he emerged from a stormy meeting with defense chiefs. "The Army has to be the best with what we have." (Mr. Hurwitz-resigned from the Cabinet this week.)

Since the "six-day war" in 1967, the Israeli armed forces have grown tremendously -- and so have the military industries that supply the bulk of Israel's weaponry, including tanks and warplanes. In the mid-1960s, defense accounted for 5 to 8 percent of the gross national product (GNP). Today it is close to 30 percent.

During the last 15 years, defense expenditures have consumed almost the entire growth in the national product. Civilian manpower grew by 40 percent in this period, but the Army's manpower grew by 200 percent. Much of this growth has come since the 1973 Yom Kippur war, fueled by the trauma of that conflict.

With inflation now nearing 200 percent, the Israeli government, despite its hawkish orientation, has come to the reluctant conclusion that Israel cannot afford this mighty defense establishment. The fact that Mr. Hurwitz was one of the more hawkish Cabinet members lent special urgency to his demands for a halt in military growth.

Israel's military strength, according to the International Institute for Strategic Studies, includes a 164,000-man standing army and more than 200,000 reserves who can be mobilized within 48 hours.

The Cabinet last month approved a budget of $2.05 billion for domestic defense spending, a third less than the Defense Ministry had requested, and $1.8 billion for purchases abroad. In real terms, next year's budget will be 10 to 20 percent less than this year's, say defense officials.

With Chief of Staff Gen. Rafael Eitan as principal spokesman, the militar fought the verdict vigorously. Even after the Cabinet vote, the military still hoped to win a reversal by leaking warnings about the consequences of the budget cut.

The day after the Cabinet decision, newspapers-cited unnamed military sources as warning that 6,000 layoffs could be expected in military industries -- and enormous amount by Israeli standards -- and 4,000 more in the regular Army.

There would be fewer flight hours for fighter pilots, who already have fewer than pilots in some Arab countries, the military experts warned. There also would be less training for ground forces and a reduced intelligence capability. Production of the locally designed Kfir fighter-interceptor plane and the Merkava tank would be curtailed. Plans to build a new-generation fighter, the Lavie, to replace the Kfir also were placed in doubt.

Rather than causing alarm, however, these warnings served to antagonize -- "a fear campaign to be taken with a grain of salt," wrote one columnist. Ex-generals have joined politicians and press in demanding that the defense establishment accomodate itself to the economic realities.

Foremost among these critics was Agriculture Minister Ariel Sharon, one of the nation's leading military heroes and a superhawk. In a proposal he has drawn up for the government, Mr. Sharon suggests even more far-reaching defence cuts, based on a new strategic concept for Israel.

The proposal has not been made public but elements of it have been leaked to the press. Mr. Sharon would cut by 20 percent the standing army, cut back significantly on the amount of stockpiled equipment, cut by half the number of tanks and halftracks in active use, and reduce the call-up of reserves.

Another former member of the general staff, Matityahu Peled, now a political dove, has called for reducing defense expenditures to 10 percent of the GNP in two to three years.

Critics of the defense establishment say that it has grown too accustomed to ever-expanding budgets and has failed to trim its wings even after the peace treaty with Egypt's significantly reduced the danger of war. The Army, for its part, says that the peace treaty can dissolve with the departure of Egypt's President Anwar Sadat and that Israel must be prepared for any worst-case eventuality.

The government has made it clear, however, that something very like the "worst case" is already at hand -- a bleeding economy that can be as disastrous to the nation as any military calamity. Apparently acknowledging defeat, the Army chiefs now have retreated into general staff headquarters in Tel Aviv to rethink the nation's defense posture.

They were urged on by one columnist who wrote that "On a lighter stomach, it is easier to search for non-orthodox solutions."

David, after all, had made do nic ely with five smooth stones from a brook.