Financial, Security industry heavy-hitters weigh in on current threats

"What is clear is that in the State of Israel, in its security and diplomatic situation, there is a strong mutual connection between security and the economy," he said.

By DAVID BRUMMER

MARCH 28, 2019 17:28

Yoav Har Even at the Maariv National Security Conferenc in Tel Aviv on March 27, 2019 (photo credit: MOR ALONI/MAARIV) — Yoav Har Even at the Maariv National Security Conferenc in Tel Aviv on March 27, 2019

(photo credit: MOR ALONI/MAARIV)

As tensions escalated along the Gazan and Northern border, Maj. Gen. Yoav Har-Even, President and CEO of Rafael Advanced Defense Systems Ltd, assured that the IDF is capable of combating any threat.

Speaking at Maariv’s National Security Conference in Tel Aviv on Wednesday, “I do not think there is a problem of ability,” he said, pointing to the United States actively purchasing cutting-edge IDF military solutions as proof of such. An example of which included the US Army asking Congress for $373 million to buy two batteries off-the-shelf from Rafael which included 12 launchers, two sensors, two battlement management centers and 240 interceptors.

“I don’t think there is an issue of ability. Even the US military is purchasing Israeli systems which have been deployed within the IDF for years, understanding their value and ability to alleviate a range of security challenges,” he added.

But to ensure any military success, a solid budget is critical. David Brodet, Bank Leumi’s Chairman of the Board, said a country’s economy and security are firmly intertwined.

"What is clear is that in the State of Israel, in its security and diplomatic situation, there is a strong mutual connection between security and the economy," he said.

David Brodet at the Maariv National Security Conferenc in Tel Aviv on March 27, 2019

As such, a balance between economic and physical security is of the utmost importance. Unfortunately, most of the time the budget can’t cover all security costs, he warned adding that political leadership also plays a factor.

This was true during the founding of the state, and remains true today. Overcoming this obstacle, he said, is the essence of the Zionist spirit.

That said, Danny Margalit, Chairman & CEO, BDO Israel, an accounting and consulting firm ranking amongst the five leading accounting firms in the country, argued against raising the defense component of the total budget. Margalit said, "We’re seeing a decline in economic growth engines in recent years, therefore I would not go in the direction of raising the defense component of the total budget.”

Danny Margalit at the Maariv National Security Conferenc in Tel Aviv on March 27, 2019

It is important to note, he argued, that the security budget does not only cover current pressing security matters, but also long-term goals like the upcoming moving of IDF headquarters from Tel Aviv to Beersheba.

Eyal Younian, CEO Deputy of Israel Aerospace Industries Ltd, suggested that a solution to these financial woes may lie in the privatization of defense industries.

Eyal Younian at the Maariv National Security Conferenc in Tel Aviv on March 27, 2019

He justified his theory by citing Elbit Systems’ acquisition of IMI Systems in a $495 million deal last year. The joining of forces now boasts some $10 billion in sales, he said. Companies like this can be even more successful, but it’s government regulations that hold them back.

“I do not know how to work when I have to give a million shekels to someone I want to fire,” he lamented. “There is no chance for the defense industries to remain in government. You can not run a global business company by tying a hand and leg behind their back.”

If these agencies are not unified and privatized, he warned, they may fall into bankruptcy - as Rafael did in 2001.

Ran Kril, Executive Vice President of International Marketing and Business Development at Elbit Systems, cited US president Donald Trump’s attempt to strengthen the United States’s security infrastructure by preferring to rely on his own domestic resources.