Thursday, 15 October 2009

Did Barak Overspend?








Scathing report slams conduct of defense minister's convoy to Air Show in France during times of recession, says most expensive hotel chosen, some of rooms booked were not used by anyone.

http://www.ynetnews.com/articles/0,7340,L-3790095,00.html 

The Chief Comptrollers latest report severely criticized Defence Minister Ehud Barak for the "excessive spending" on this year's Defence Ministry Delegation to the Paris Air Show.

Barak's political opponents have jumped on this stating Barak "has proven himself once more unworthy of leading the Labor Party."

In the details, the following facts have been revealed:

Total cost of the delegation: $250,000

Hotel Expenses: $80,000

Number of attendees: 57 representatives from the Israeli Ministry of Defence travelled to the Exhibition, including the Defence Minister. 

Micha Lindenstrauss, the Chief Comptroller, highlights mess-ups with the bookings, leading to high prices at this, the 100th Anniversary Paris Air Show. Barak's hotel room at the exclusive Intercontinental Hotel in central Paris was $2500/night. 


Background: The bi-annual Paris Air Show is arguably the world's largest aerospace exhibition. Israel has for many years had its own exhibition hall at the show (when other major countries hosting Air Shows even refused to grant Israeli companies the right to exhibit!); it is here that Israel's leading defence contractors, such as Israel Aerospace Industries, Rafael, Elbit, Israel Military Industries, as well as smaller manufacturers, show their wares, and many large sales contracts are inked at the show. 

Israel's defence industry accounts for around $6 billion/a in exports, placing Israel in the world's top ten defence exporters; this business is thriving, relatively untouched by the global economic recession. Over 80% of the turnover of Israel's defence industries goes to export markets.

Israel's military strategic edge is largely reliant upon Israel's own defence industries, providing mission-ready systems, at affordable (even for a small country) costs. The local market alone cannot sustain this, and so defence exports enable Israel's Defence Forces to maintain a critical qualitative edge. A strong defence industry also allows us a certain level of independence from boycotts by supplier countries (as happened with France and the UK in the past).


Furthermore, the Ministry of Defence is itself a major customer, particularly for US Aerospace manufacturers – with over $2 Billion/a in US Defence Aid being spent back in the USA by Israel's MoD. The Israel Air Force, for example, is totally reliant upon US manufactured fighter aircraft, such as F-16's and the upcoming Joint Strike Fighter, which will ensure Israel's fighting capability for the coming decade. All the main US manufacturers are present, such as Boeing, Lockheed Martin, Raytheon, et al, together with their top executives

In this perspective, for the Ministry of Defence to spend $250,000 on having a highest level presence at the Paris Air Show, seems a reasonable national investment. Even the minister's $2500/night suite would seem to be proportionate to his status.

So, whereas Micha Lindenstrausse beady eye on government spending is to be welcomed, and will hopefully prevent excess – and hopefully as a result of this latest report the boys in the MoD will be more careful with their hotel bookings in future – I do not see this as a cause for Barak to stand-down or even, frankly, to apologise. The main excess here, methinks, is political opponents within the Labour Party absurdly stating that, by these expenses " Barak has proven himself once more unworthy of leading the Labor Party."

1 comment:

  1. I disagree about the $2500 a night. That's an expense that can be trimmed down substantially while still providing for a special room.

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