Let IDF Win – With Transparence

17 Jul 2014
In the days following the recent battles in the Gaza Strip, we will once again experience the regular ritual regarding the defense budget. The Ministry of Defense will demand additional budgets and, conversely, the Ministry of Finance will demand budgetary restraint. I am familiar with this ritual from previous rounds of battle and the constant budgetary disputes between the Ministry of Defense and Ministry of Finance, all part of the process of preparing next year’s national budget. With the aim of preventing the argument surrounding the defense budget, Prime Minister Benjamin Netanyahu, back in October 2013, ordered the establishment of a public committee headed by the Director General of the Prime Minister’s Office, Major General (ret.) Yohanan Locker, to examine the defense budget. The committee began deliberating several weeks ago, before the current fighting started, and its recommendations are intended to replace the defense budget outline formulated by the committee headed by David Brodet in 2007. The Locker Committee will have to cope with many challenges relating to the scope of the defense and IDF budget. And yet one of the main challenges relates to the reform required in the methodology for planning and establishing the budget. Issues of effective budgetary planning are not exclusive to the defense system. They are faced by many large organizations in Israel and around the world. One of the demands set forth by organizational managements is to enable them to decide on organizational activities based on agreed numerical figures. To this end, business organizations utilize databases that enable them to plan the organization’s budget in a more efficient manner, to understand the cost of operations and to properly link the costs to the yields. Budgetary planning is a tool that enables organizations to operate with maximum efficiency in light of the various demands and to optimize the available resources. The problem is that the Israeli defense system does not have an established database that enables it to estimate the cost of each of the IDF order of battle components. An agreed database, along with pricing models, could enable a process for evaluating alternatives and developing transparency regarding the costs for building the force, training and retaining its preparedness. A database like that could help establish an organized procedure to support the decision making processes at the political level and to set clear priorities, used to derive the budgetary implications. Thus, for example, using an agreed database, decision makers can obtain a real picture regarding system cutback and streamlining alternatives, and identify places where streamlining would produce the best economic results while minimizing the impairment of defense outputs. However, in order for a database to be agreed upon, there must be a consensus between the Ministry of Defense and Ministry of Finance. The absence of an agreed database is one of the causes of the mutual suspicions and accusations raised between the Ministries in defense system budgetary discussions. The absence of agreed figures precludes the possibility for fertile dialogue between the parties, where each side takes the discussion in the direction that it finds beneficial. Clearly, if the ministries agree to be clearer and more transparent with the figures and rules for preparing the budget, friction between the ministries would subside and the cooperation between them would benefit the entire economy. The State Comptroller of Israel also addressed the issue and, in his 2006 report, stated that although IDF utilizes several models for calculating the cost of certain missions and operations, there is no comprehensive pricing model for all elements of the work plan and their development forecast for the upcoming years. The defense system should provide Israel with protection at costs that correspond with its economy and its civil and social needs. To this end, the defense system should adopt modern management tools and approaches. The Locker Committee must examine the defense system’s budgetary planning capabilities in light of the budgetary planning trends applied around the world, and propose a solution that will be relevant and effective. The article originally appeared in TheMarker