The Israeli Ministry of Finance revealed in a report carried by the Israeli newspaper Globes the increasing and worrying financial pressures imposed by the Israeli war on the Gaza Strip and the ineffectiveness of current compulsory recruitment policies.
Despite the potential savings, recruiting Haredi soldiers may fail to address Israel’s rising defense expenditures.
The ministry’s report stressed the fact that every thousand Haredi soldiers recruited for combat service could save the country 1.3 billion shekels annually (about $358 million).
However, this figure pales in comparison to the increasing costs of extending compulsory and reserve service, which exceed NIS 10 billion ($2.76 billion) annually.
Globes says the current policy of recruiting only active-duty Haredi soldiers has been criticized as short-sighted and economically damaging, offering only minimal relief from the mounting financial burden.
incomplete steps
Moreover, the Israeli Finance Ministry has highlighted the inefficiency of the current system. While the recruitment of 1,000 ultra-Orthodox soldiers could theoretically provide 833,000 combat reserve days per year, the broader economic ramifications are dire.
The expected reduction in the burden on combat reservists would provide no more than 14 days per year for soldiers called up for duty, a negligible figure when considered against the overall costs, according to the newspaper.
The high employment rate among non-Haredi Jews has driven growth in Israel over the past decade, yet there is still a large employment gap between Arab women and Haredi men, who earn only 56% and 49% respectively of the wages of their non-Haredi counterparts, Globes reported, citing the ministry report.
The ministry warned that without integrating this population into the workforce, Israel could face a catastrophic loss in annual GDP of 13% and the need to increase direct taxes by 16%.
5 reservists cost up to 9 regular recruits, making the current recruitment strategy largely ineffective.
The looming demographic shift is exacerbating the problem. Although the ultra-Orthodox community is expected to constitute nearly a third of Israel’s population by 2065, the current lack of economic integration poses a serious threat to future stability, according to the report.
mounting costs
The Israeli Finance Ministry also pointed to the high costs of extending compulsory service. The six-month extension costs 6.35 billion shekels ($1.75 billion) annually, including the economic repercussions of delaying soldiers’ careers, according to the same report.
In addition, extending reserve service causes additional economic damage of NIS 10 billion annually, due to high compensation and loss of productivity.
The ministry stressed that reserve soldiers are much more expensive than conscripts, as 5 reserve soldiers cost up to 9 conscripts, making the current recruitment strategy largely ineffective.
The ministry’s bleak forecasts make clear that without a comprehensive reform of recruitment and employment policies for the Haredi and Arab populations, Israel faces a bleak economic and security future.
