The Continuous Military Burden & Israel’s Race for Strategic Superiority

IAI Harop loitering munition drone displayed at Paris Air Show 2013
The IAI Harop, an Israeli loitering munition drone, displayed at the 2013 Paris Air Show. These drones exemplify the advanced but costly direction of Israeli military R&D. Photo by Julian Herzog, via Wikimedia Commons. Licensed under Creative Commons BY-SA 3.0.

Israel’s security situation demands a level of military readiness that few other nations require. Practically every Israeli Jew (and many Druze and Circassians) serves in the IDF at age 18. This means years of young adulthood are devoted to military service instead of higher education or careers. While many take pride in service, the reality is a personal sacrifice of time, and sometimes health, that Israelis make en masse.

Moreover, after active duty, men up to their 40s serve in the reserve forces, liable to be called up whenever crises erupt. The 2023 war, for example, saw over 360,000 reservists mobilized within days. This recurring disruption pulls people from jobs and families, effectively a long-term tax on productivity and personal life. The ongoing need for a large standing army and ready reserves is a permanent weight on society, felt in everything from workforce participation rates to the national calendar (with frequent “miluim” reserve stints).

Financially, the protracted conflict forces Israel to spend an enormous portion of its national resources on defense. Military spending in Israel has historically been far above normal levels, even for developed countries. From 1960 to 2022, Israel devoted on average 12% of its GDP to military expenditure – several times the world average (~2%).[5]

During major conflicts it has spiked much higher — over 30% of GDP in the mid-1970s after the Yom Kippur War.[5]

In recent years, even with a booming tech economy, Israel still spends about 5–6% of GDP on defense, making it one of the most militarized budgets in the world. Every shekel in the defense budget is a shekel not spent on civilian needs like schools, hospitals, or infrastructure. The opportunity cost over decades is immense — resources poured into tanks, Iron Dome interceptors, and intelligence operations could otherwise have built more highways, universities, or aided the poor.

Beyond the baseline defense budget, each outbreak of fighting carries extra costs that can rock the economy. During the 2023 Gaza war, Israel’s monthly military spending jumped from about $1.8 billion to $4.7 billion by year’s end.[6]

The government had to fund an unplanned $27.5 billion increase in defense outlays in 2024, pushing military spending to 5.3% of GDP (compared to 3.4% in the U.S.).[6]

Such spikes require either going into debt or cutting other budgets. Economists warned Israel might face higher taxes or cuts to social programs as the war’s costs strain government finances.[6]

The Bank of Israel estimated that by late 2025 the direct cost of the Gaza war could reach ₪250 billion (≈ $65 billion) — a colossal sum that will burden taxpayers for years.[7]

The need to maintain strategic superiority over adversaries (through advanced weaponry, R&D, etc.) means this financial burden is not a one-time spike but a perpetual commitment. Over decades, this “guns over butter” tradeoff slows improvements in living standards and adds national debt that future Israeli generations must service.

The IDF’s high-tech prowess and Israel’s defense industries are sources of national pride, but they also highlight a subtle cost of perpetual conflict: a significant share of Israel’s top scientific and engineering talent is continually absorbed in military and security projects. Israel has had to become a world leader in areas like cybersecurity, drone technology, and missile defense, precisely because threats are so constant.

However, the focus on survival innovation means some brilliant minds spend their careers on warfare technology rather than, say, civilian industries or academia. Moreover, the necessity of preparedness means more young Israelis remain in uniform longer, or choose security-related careers, instead of contributing to the economy in other ways.

The long-term challenge is striking: Israel must balance being a “Startup Nation” and an “Army Nation.” So far it has managed, but as conflict persists, the ongoing mobilization of people and funds for military needs could crowd out other creative and economic endeavors. This continuous burden raises the question of sustainability: can Israel keep this up indefinitely without eroding its economic vitality?

Image courtesy of Wikimedia Commons, by Julian Herzog, licensed under CC BY-SA 3.0.

References

  1. IDF Induction Center, Service-Length Guidelines 2024 Edition.
  2. Israeli Reservists’ Forum, Average Miluim Days Report (2023).
  3. IDF Spokesperson’s Unit, War Log – “Swords of Iron” Mobilization Figures (Oct 2023).
  4. Bank of Israel, Macro-Impact of Reserve Mobilizations (Working Paper 04-2022).
  5. Data compiled from TheGlobalEconomy.com, Military Expenditure – Israel vs World 1960–2022.
  6. Tia Goldenberg, “Israel’s War Bills Soar,” Associated Press, 14 Jan 2024.
  7. Steven Scheer, “Gaza War May Cost Israel ₪ 250 Bln – BoI,” Reuters, 3 Feb 2025.
  8. Israel Innovation Authority, National R&D Survey 2024.
  9. Central Bureau of Statistics, Emigration Trends in High-Tech Occupations 2024.
  10. OECD Health Data 2023, Government Health Expenditure per Capita.