Democratic Palestine : 4 (ص 37)
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- Democratic Palestine : 4 (ص 37)
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much, making Israeli wage cost per unit of output «lower than
in most industrial countries» .** Rafael Benvinisti, director of the
Israel Investment authority, estimates that Israeli engineering
graduates earn 40 percent of U.S. salaries. Leon Riebman,
president and chief executive officer of AEL Industries Inc.,
noted «it is costing us 30 percent of what it would cost us to do
the same type of research in the U.S.»“
The Wall Street Journal reported in 1981 that «Israelis
complain that in criticizing lsrael’s hawkish military policies, the
U.S. overlooks the fact that Israel has served as a kind of ‘com-
bat laboratory’ for U.S. weapons development.* Defense
Attache called Israeli weapons «combat proven».*® At IAI, an
Official notes that ‘we have people here all the time from U.S.
companies and the U.S. military studying our experience.’» An
[AI official added, «An engineer here knows that what he pro-
duces, he or his son will fight with» .*7
Moshe Arens, the new Israeli defense minister, was an
aeronautical engineer for the Curtiss-Wright Corp. before he
emigrated in 1957.*® By 1959, he opposed Ben Gurion and
Eshkol because they were not moving quickly enough, in his
judgement, to develop Israeli nuclear weapons. In 1960, witha
former commander-in-chief of the Israeli Air Force, he founded
Elron. He participated in the development of the Arava trans-
port and received the «Israeli Prize for Security» in 1971 for
reasons which remain secret to date. He is also a director of
Israel Aircraft Industries, a strong backer of the Lavie (formerly
called the Aryeh)*?, and helped negotiate the U.S.-Israeli
accord on strategic cooperation.” Arens cites three advan-
tages of the Israeli defense industry that he says the U.S. will
never match, according to The Wall Street Journal, «the
experience of workers who are nearly all members of Israel's
military reserves; lower costs, because of salary levels that are
about half those in the U.S.; and speed in development of
weapons systems».°!
U.S. Arms Purchases from Israel
In fact, conditions are so profitable that the U.S. govern-
ment itself has extended many contracts to Israeli arms man-
ufacturers, provoking complaints from their U.S. counterparts.
The General Accounting Office responded that the Buy Ameri-
can Act permits «preference for suppliers of domestic end-pro-
ducts but does not require that bidders offering foreign end-
products be rejected». In any case, Israeli arms manufactur-
ers are exempted both from Buy American restrictions and
from import duties. U.S. Defense Department purchases
from Israeli firms for aviation and computer goods went up from
26.5 percent of Israel’s exports to the U.S. in 1978 to 37 per-
cent in 1980.°4
An interesting illustration of this trend is the McDonnel
Douglas F-15. In 1977, the Israelis were refused coproduction
rights. But by 1979 over $20 million worth of F-15 parts were
Israeli made. Certain F-15 parts, such as gun access panel
doors, are now manufactured only by Israeli companies as
subcontractors for McDonnel Douglas. One of the largest pri-
vate Israeli firms, Cyclone Aviation Products, thus produced
parts for F-15's delivered to the Saudis over apparently vocifer-
ous Israeli opposition.*> The Israelis were well-compensated
after this «defeat».°° In another case, Tadiran signed a $93
million contract to supply electronics equipment directly to the
Department of Defense.*’
According to the Financial Times, Professor Ezra Sadan,
director-general of the Israeli Treasury, reported to his govern-
ment on March 22, 1981, «that during talks in Washington [the
week before] he found a very receptive ear to the suggestion
that Israel could provide the U.S. with some of the equipment
needed for reinforcing the U.S. army». The story continued,
«One area where the Israelis are most hopeful is in providing
the equipment and knowledge it has developed in desert war-
fare to the U.S. rapid deployment force, which will be expected
to fight in desert conditions in the Middle East» .°®
In April 1983, Assistant Secretary of Defense Richard N.
Perle recommended the U.S. Army purchase weapons from
an Israeli company. One year before he had been paid
$50,000 as a consulting fee by the same company.°°
Arms Production and the Israeli Economy
Israeli arms exports and total exports are classified
figures, but estimates from the Stockholm International Peace
‘Research Institute indicate as much as 40 percent of total
Israeli exports consist of military supplies and services.©, an
estimated $2 billion in sales in 1982 according to a 1981 pro-
jection by Deputy Minister of Defense Mordechai Tzipori.®'
Ya’acov Meridor told Israel Bond officials in Jerusalem, «We
consider that, on the road to our economic independence, we
can increase in the next four years the weaponry exports by an
additional $2 billion» .® Military exports, according to a 1982
article in Ha’aretz, accounted for 60 percent of Israeli steel,
electrical, and electronics exports over the previous five years.
Although the slowdown in the world economy has hurt Israeli
arms sales somewhat, in 1983 some Israeli economists advo-
cated reducing arms as a percent of total exports to 25 per-
cent.® In fact, industrial exports, not including diamonds, are
expected to grow from 30 percent of exports a decade ago to
two-thirds, according to Avraham Ashieri, director-general of
the Industry and Trade Ministry.“
In 1975, Israeli military exports were about $150 million,
approximately 15 percent of total exports and double the previ-
ous year.® As recently as 1977, Israeli arms exports totaled
only $285 million. By 1980 Israeli firms collectively, with $1.25
billion in world arms sales, were the single largest arms
exporter to sub-Saharan Africa and to Central America. In
- 4982, the CIA ranked Israeli arms exports at fifth in the world,°
after the United States, the Soviet Union, France, and Britain.
The Israelis had apparently passed West Germany and Italy,
ranked ahead of them in a 1981 New York Times report.
Begin’s special assistant for economic coordination,
Ya’acov Meridor, confidently predicted in 1981 that over the
following four years Israel would increase «weaponry.exports >
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