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The Potential and Peril of PMC in Israel

For those who follow private military contracting issues, it sometimes seems that all the focus is on the United States. That is understandable given the sheer number and value of contracts performed by the private sector in the United States but it is hardly the only country doing this.

Other European countries have, to varying degrees, been doing this for years. That would notably include England. Indeed, the very notion of outsourcing such functions skipped over the Atlantic from London to Washington back when Margaret Thatcher was prime minister.

But the scope of PMC is worldwide, from the Americas, to Africa and Asia. For example, let's consider Israel. This was the subject of an article titled "From Nationalization to Privatization: The Case of the IDF" by Guy I. Seidman of the Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law in Israel. It was published last year in Armed Forces & Society journal.

He finds that the Israeli Defense Forces (IDF) is following a well worn path on the road to privatization. First it starts with logistics.

One of the first "civilianization" efforts to register in the public mind concerned
food: like Bonaparte's troops, military food was a matter of mythology. For decades the IDF insisted on providing all soldiers on duty with all their food needs. Few soldiers enjoyed military cuisine, and most preferred to pay for civilian food, where available.
The IDF finally bowed to popular pressure. Military kitchens were closed on major bases and commercial actors were allowed in. This was a huge deal: army 16 bases were a sanctuary from modern world: noncommercial, apolitical, a pure and wholesome public institution. Now there are Burger King and McDonald's branches available to soldiers. Plans are now set to close all military kitchens, reducing over 2,250 full-time positions.

Thus far the IDF has "civilianized" mostly noncore military assignments, involving limited military discretion or expertise: these are services that the private sector provides to the general population, at no less a quality and a lower cost than the IDF and where maintaining a parallel military service turned increasingly inefficient. Examples include:

  • Maintenance of vehicles and soldier transportation services: leasing civilian cars, buses, and flights is more efficient and less conspicuous (hence more secure).
  • Construction and maintenance of physical plants, and a third concerns various instruction courses ranging from driving courses for Hummer vehicles to pilot instruction.
  • The final example is the "start of services that are, in my view, more closely related to core military expertise and discretion and show that the IDF--like its U.S. counterpart--needs to outsource to private contractors simply because development and maintenance of such systems are too complicated and expensive. It buys "off the shelf" products or has systems developed to military specifications. Such products include computer software and various sophisticated electronic systems."
  • Another privatization project concerns outsourcing of medical services so that most soldiers will be treated by civilian HMOs. Here privatization is the result of the IDF's inability to effectively complete with the private sector--that is, draw sufficient numbers of medical doctors to its ranks.

Listening to one Israeli military officer is like traveling back in time and listening to Donald Rumsfeld when he was Secretary of Defense. In a 2004 lecture, then Israeli Technological and Logistics Director General Udi Adam made the following remarks:

Twenty years ago, the IDF ground coffee. That is, anyone driving in Sarafend base would be intoxicated with the aroma. . . . Now such things don't exist. . . .
We purchase 130,000 pairs of military shores a year, but we don't produce any. . . . We have about 1.5 million doctor-patient meetings, most of them within army units . . . but we don't have military hospitals. . . . We swallow 400 million capsules of paracetamol per year, these we buy in pharmacies and do not produce. We eat close to 150,000 lunch meals. . . . My intention is to outsource this entire field. . . .
What I wish to do is outsource anything that is not without our core business . . . such as tank transporters which the private sector finds non-economic. . . . We have defined out core business and we redefine them annually, as things change. One example is the transporting business on which we spend about 1.2 billion shekels, of which 250 million is military and the rest civilian. . . .
The factors we take into account in outsourcing are whether we have the capacity to function in emergency conditions, that there is no damage to operational capacity . . . and of course long term economic feasibility. . . .Seidman 17 Given these criteria we have outsourced things like transport--including internal flights and patient delivery, use of civilian gas stations and uniform supply and there is plenty more. . . . About 90% of the Israeli Technological and Logistics Directorate activity is carried out by civilians. . . . This is billions of shekels. . . .

But that did not mean Ada was convinced of the value of privatization

Carefully, with measured steps . . . we are far more privatized than you have imagined, and it is not clear that this is the optimal direction for us to go in. One must be careful because at the end of the day this military must be effective.

In Israel outsourcing is not the subject of a big debate. It is not challenged or debated as it is in the United States. That is not because Israelis are unaware that it is going on. Instead, as Seidman writes, the "phenomenon is based on Israeli societal attitudes. I suggest that Israelis are not unaware of the privatization process nor of its implications but rather take a "wait and see" attitude, for the moment. I note that the privatization process is checked by the civilian side of government and monitored by the press."

In one sense the debate over privatization in Israel is more grounded on the basis of fact than ideology A past Israeli government group, known as the Brodet Commission, which was set up in 2006 to examine the Israeli defense budget, noted that the IDF needs to make more efficient use of resources and that "the main purpose of the IDF is defense of the State of Israel and its residents. It recommended taking out of the military civilian tasks and even security tasks which are not tightly linked to the preparedness to war."
The report sets out the following criteria for "civilianization" of functions:

(1) not at the core of military operation, (2) long-term economic efficiency, (3) there is efficient competition in the civilian market, (4) can be provided for in emergency conditions, (5) no unique technological know-how needs to be preserved, (6) no injury to operational capabilities, (7) security clearance can be provided, (8) savings in military payroll costs.

Also, Seidman notes that trust in the civilian side of the Israeli government has declined in recent years due to volatile nature of Israeli politics with a splintered political arena leading to unstable coalition governments, multiple threats to domestic security, and now a downturn in the economy. Thus given a decline in public faith in civic government it is easy to see why the Israeli public prefers to let the IDF, the most trusted institution in Israel, to maintain the lead in the privatization process.

Finally, in a conclusion that could be ripped from numerous headlines about U.S. military operations in Iraq and Afghanistan during the past decade Seidman concludes:

Finally, there is always the nagging question of the success of privatization when tested under the sort of emergency situations for which the military is maintained. A cautionary tale comes from the Lebanon War. It suggests that sometimes military food was better than no food: Some reports claimed that during the Second Lebanese War soldiers went hungry, and rumors had it that private contractors had refused to deliver under fire. These allegations were probably wrong, but they accentuated the calls for more public oversight of the extent of privatization in the military.
Moreover, what the investigation committee set up after the war clearly found out was that the military authorities have opted for too few reserves of various supplies, having concluded that war was not imminent. They were wrong, and the result was acute shortages when wartime finally came.
Military discretion proved wrong. Civilian oversight proved too late. A cautionary tale indeed.