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26 2011

The Cost of Defending Israel

Syndicated from: Steve Paikin

Can you imagine what would happen to the Canadian economy if, by law, people were required to drop out of it for a month every year? Welcome to reality in Israel. Dr. Nadine Baudot-Trajtenberg, associate dean at the Herziliya Business School, estimates it costs the Israeli economy 5% of its GDP every year, so that Israeli Jews can fulfill their obligatory military service. Israeli Arabs and ultra-orthodox Jews do not serve. Dr. Nadine Baudot-Trajtenberg, associate dean at the Herziliya Business School   “It’s a huge cost to the economy,” she says. When Israeli women turn 18, they join the army for two years at a minimum. For young men, it’s three years. For pilots (considered the elite of all soldiers), it’s nine years. The “up side” of compulsory military service is that one of the country’s most respected institutions screens young people for whatever talent they may have. An Israel Defense Forces soldier gives a briefing on the Israeli-Syrian border, the Golan Heights. That is Syria in the background.   “Some will end up in the air force orchestra,” Dr. Baudot-Trajtenberg says.  “Others will be dancers. And the nerds? They’ll go into intelligence. We need a lot of nerds.” (One of Dr. Baudot-Trajtenberg’s three daughters is in the intelligence service.  “She’s a nerd.”). Israel’s defense expenditures represent 9-10% of the country’s GDP today.  The OECD average is 3%.  Even at the height of the war in Iraq, the United States’ was 6%. Japan’s is less than 1%.  But even at its disproportionate rate relative to others, defense spending is still much smaller than the 35% it was three decades ago. A border patrol team monitors the Israeli-Palestinian frontier.   The problem with Israeli defense today is it’s much more costly than simply policing the occupied territories used to be. The barrier or fence has cost $1 billion to build --- and counting.      The country has spent another $1.5 billion developing the Iron Dome, a state of the art, anti-missile defense system. But the biggest costs to the Israeli economy relate to a ticking demographic time bomb --- both Arab and Jewish. We’ll pick up the story there next time.

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