Israel is suffering from conscription fatigue. Introduced on a large scale worldwide in the late 19th century, conscription users found this source of cheap soldiers addictive and the main cause of huge casualties during subsequent wars. Not surprisingly, conscription was never popular and it began to lose any remaining popular support in a big way soon after World War II. Even nations, like Israel, that have a real and pressing need for conscription are facing more and more popular opposition to the practice. So the military is reorganizing as part of a long-range effort to greatly reduce and eventually (if the Arabs ever recognize Israel and make peace) eliminate conscription.
Like most other industrialized nations, Israeli government spending on social programs (favored by politicians to keep themselves in office) has increased since the end of the Cold War in 1991, and defense spending has declined. For Israel this meant military spending declined from 17.7 percent of GDP in 1991, to six percent now. So, despite a booming economy, cuts have to be made and that has the military planning accordingly. Despite the decline in defense budgets as a percent of GDP, rapid GDP growth has generally kept the defense budget growing in absolute terms. Thus, the defense budget in 1991 was $6.4 billion (about $10 billion adjusted for inflation). But the military has also had to deal with inflation when buying equipment or paying its full time troops.
Rather than try to fight political decisions to cut defense spending, and likely lose, the military leadership will use the cuts as an opportunity to shrink and restructure the military to make it more effective. This often works but not always, especially when so many interest groups will be opposing the changes. Taking the military budget from the current $16 billion to something closer to $12 billion will involve a lot of changes. One of the more obvious ones is shutting down most of the military bases in the coastal cities, selling the land for what it is now worth (a lot) and moving the troops to four new mega-bases in the thinly populated interior. The reorganization will disband air force squadrons using elderly aircraft (so that the more modern planes can keep their pilots well trained). Reserve army units, some of them existing out of habit or tradition more than need or relevance, will be disbanded or shrunk. This includes several armored brigades using older tanks (M-60s and Merkava 1s). The growing use of smart bombs and guided missiles has made a lot of older artillery weapons obsolete and the guns and the troops who man them will go.
Another trend the reorganization will take advantage of is the declining need for calling up for active service. Reservists are being called up less often since the 1990s. In that period reservist active duty has dropped 75 percent (from 10 million man-months to 2.5 million). There will also be changes in training and administration that will require less manpower and money. Politicians are also scrutinizing pensions and benefits for senior officers, which have crept up in the last few decades. There are new restrictions on retired generals from becoming politicians right after they retire. In short, the Israeli military is going through a lot of changes.
The Israeli military has already undergone several reorganizations since 2000. After the Palestinians began their terror campaign in 2000 (to try and sweeten the terms of a peace deal), the Israelis developed new counter-terror tactics and turned much of the military into a counter-terrorism organization. The Palestinian terror effort was defeated within five years, but the army suffered a major embarrassment in 2006, when Hezbollah pushed its cross-border terrorism a bit too far and triggered some more conventional combat. This revealed that the Israeli military had become good at counter-terrorism at the cost of many of its conventional warfare skills. The Israelis still defeated Hezbollah but the details revealed that the Israelis could have done it better and faster. So in the last seven years there’s been a rebalancing to make the military capable of dealing with the continuing terror threat, as well as the prospect of more conventional combat in Lebanon (or with any of the other neighbors). The Arab Spring uprisings in 2011, crippled most Arab armed forces, causing damage that may take a decade or more to repair. There’s still an Arab military threat to Israel, just not as much of it for a while.
The problem with these reorganizations is that you never know if they will work (or exactly how well) until there’s another crises or war. That said, the Israelis tend to learn from past mistakes and have a pretty good track record (compared to all other nations) when it comes to military reform.