Weak dollar, high oil costs leave IDF NIS 2b short

Army will ask for help in purchasing vital supplies.

F-35 jet (photo credit:)
F-35 jet
(photo credit: )
Short NIS 2 billion due to rising oil prices and the drop in the value of the dollar and facing a growing number of urgent challenges, the IDF has asked the government for an advanced payment of several hundred million shekels to purchase vital munitions and supplies, The Jerusalem Post has learned. Over the next few months, the IDF's Planning Division - led by Maj.-Gen. Amir Eshel - will present the military's work plan for 2009 to Chief of General Staff Lt.-Gen. Gabi Ashkenazi for approval. The work plan is based on the IDF's annual budget and includes its procurement and operational plans for the coming year. The defense budget in 2008 started at NIS 50.5 billion but due to the sharp drop in the value of the dollar and a dramatic increase in the price of oil, the IDF has found itself short NIS 2b. Some of the money has been compensated for by the Treasury while the rest has not. The Brodet Committee ruled after the Second Lebanon War that the defense establishment needed a multi-year budget, according to which in 2009 it is slated to receive NIS 50.3b. The budget will increase every subsequent year and, for example, in 2012 the defense budget is slated to be NIS 52.2b. Based on this incremental increase, the IDF is asking for the advanced payment. "We need the advanced payments to deal with specific issues sooner than initially planned," a senior IDF officer said. "This is key to improving the IDF's level of readiness." Last month the security cabinet approved the defense budget for the coming years based on the model determined by the Brodet Committee. While the IDF is asking for the advance, it is also involved in an unprecedented process of budget cuts and in the coming weeks each branch will present a plan to further cut excessive spending. So far this year the IDF has succeeded in saving NIS 550 million. The IDF is also in the process of finalizing details to allow employees of the McKinsey consultancy company to begin working on creating a a 10-year streamlining plan for the military. The company was awarded the three-year multi-million dollar contact in late June. McKinsey, one of the world's leading consulting companies, previously conducted a similar project for the British military. The Defense Ministry will pay McKinsey NIS 30m. over the next three years. The company's employees, after undergoing security clearance, will be allowed to set up offices inside the IDF and Defense Ministry headquarters in Tel Aviv.