… By the end of the 1970s, the Israeli military industry was supplying 40 percent of Israel’s military needs. But production runs solely for the domestic market resulted in high costs per item. The longer production runs necessary to lower unit costs created an imperative to export.
The government began a concerted marketing campaign, through diplomatic and military contacts, as well as news releases and exhibits at fairs. In later years a sales force of retired military officers eager for commissions fanned out over the globe. While the secrecy of the Israeli government makes it impossible to exactly calculate the volume of Israel’s weapons sales abroad, the general consensus of analysts of the international arms trade indicates that between 1972 and 1980 Israel’s arms exports soared, particularly in the latter part of that span, rising from $50 million to top $1 billion, and, with the possible exception of 1983, have remained over $1 billion annually. A 1986 estimate puts annual sales at "more than $ 1.25 billion. Since 1982 Israel has been ranked among the world’s top ten arms producers.
The importance to the overall economy of the arms manufacturing sector also increased, with weapons exports estimated to have comprised 31 percent of industrial exports in 1975, up from 14 percent in 1967 and more recently 30 to 40 percent of Israel’s industrial output. The arms industry employs "anywhere from 58,000 to as many as 120,000 Israelis," or, taking the lower figure, percent of the industrial labor force, with the biggest unit, Israel Aircraft Industries, the nation’s largest employer, carrying 20,000 on its payroll.
The export imperative, in turn, brought its own set of problems, these centering on the overseas markets available to Israel and on its choice of customers from that list. For varying reasons, Israel was largely shut out of the Eastern Bloc, the Arab world and NATO countries. That left its potential clientele to be found on the peripheries: pariahs such as South Africa and Guatemala, the strong-man regimes of Taiwan, Zaire, and Chile, and the occasional government wary of strings-attached arms purchases from the superpowers. Over the years Israel has sold weapons-and often along with the weapons come Israeli advisers-to Costa Rica, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua (under Somoza), Panama, Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Venezuela, Cameroon, Ethiopia, Ghana, Kenya, Liberia, Morocco, Nigeria, Rhodesia, South Africa, Swaziland, Tanzania, Uganda, Zaire, Australia, China, Indonesia, Malaysia, New Zealand, Papua-New Guinea, Philippines, Singapore, Sri Lanka, Taiwan, Thailand, Iran, and a number of European countries and several non-governmental actions. Sometimes even the least desirable customers have required some softening up: "Greatly detailed stories abound of the huge bribes Israel has used to suborn defense ministries, with the sole objective of nailing down arms deals."
As time went on an additional problem arose: arms sales became the motor driving Israel’s foreign policy. In times of economic crisis it became the supreme exigency. In September 1986, the Israeli defense minister explained to a press conference what was behind a raft of scandals involving Israeli arms exports and technology thefts (these last, most frequently from the U.S., have been an inevitable hallmark of a small country attempting to sustain a full-scale armaments industry). "…We cut our orders in our military industries…" he said, "and I told them quite frankly: ‘Either you’ll fire people or find export markets."
The export markets open to Israel are frequently among the world’s most unsavory; indeed, to be off limits to the superpowers they often are located inside the very gates of hell. Already under international censure for its oppression of the Palestinians in the territories it occupies, Israel’s dealings with the scum of the world’s tyrants-including the white clique in South Africa, Somoza of Nicaragua, Gen. Pinochet of Chile, Marcos of the Philippines, Duvalier of Haiti, Mobutu of Zaire, the allegedly cannibalistic Bokassa of the Central African Republic-invariably result in its further exclusion from more "respectable" circles. "A person who sleeps with dogs shouldn’t be surprised to find himself covered with fleas," comments the military correspondent for Israel’s major daily newspaper.
Israeli critics, who term the phenomenon "arms diplomacy," warn that the export imperative has motivated a sequence of ad hoc, opportunistic decisions that have precluded the development of a coherent foreign policy, which, in turn, might over the long term mitigate Israel’s isolated position in the world. Yet these critics are far from sanguine about the ability of Israel to set itself on a different course.
They point to the power of the "security establishment lobby," comprised of the upper echelon of Israel’s political leadership (this has remained remarkably constant since the founding of the state), the top levels of the military, and the officials of the parastatal arms industries. As in the U.S., there is a "revolving door" in Israel, with many of the top figures serving successively in two or all three of these sectors. It is these men who find the clients and have insider access to the Ministerial Committee on Weapons Transfers (MCD)-its members are the prime minister and the ministers of defense, foreign affairs, and trade and industry which will make the final decision on every sale. Such decisions are made secretly- the Israeli parliament, the Knesset, excluded. The cabinet, too, is often excluded. Critics of the hegemony of the arms export business say it has relegated the foreign ministry to a subordinate role in Israeli foreign policy making, and they see in its wake grave social and political consequences.
‘ A sector has evolved in Israel, headed by an elite with identical social characteristics and marked by a fairly high degree of cohesiveness, whose decisions and actions have a significant effect not only on the country’s economy and its foreign and | defense policy but also on its social and value systems. No less important, however, is the issue of whether a closed system has been created whose activities and decisions undergo less public supervision and scrutiny than any other area of life in the country. ‘
A Co-equal Type of Proxy
Israeli analysts often argue that Israeli arms sales are dependent on U.S. approval; in a limited sense this is true. The U.S. has blocked-at the behest of Britain-the delivery of A-4 Skyhawks to Argentina, and it has in the past vetoed the export of the Kfir aircraft, leverage it is able to exert because of the Kfir’s U.S. engine. However, the Carter Administration was unable to prevent Israeli nuclear cooperation with South Africa, and the Reagan Administration was unsuccessful in persuading the Israelis to halt their arms sales to Iran in the early 1980s (assuming it wanted to). The Israeli success in persuading the Reagan Administration to incorporate Israeli arms sales to the Islamic Republic into a bizarre and controversial series of contacts with Iranian leaders is probably more typical of the operative U.S.-lsraeli dynamic.
On the other hand, Israel has often obliged this or that sector of the U.S. government, selling arms where it would be embarrassing or illegal for the U.S. to do so: the contras, the Peoples Republic of China in the early 1980s, and the Derg government of Ethiopia are examples. In 1975, Israel followed Secretary of State Henry Kissinger’s advice and helped South Africa with its invasion of Angola. Even after the passage the following year of the Clark Amendment forbidding U.S. covert involvement in Angola, Israel apparently considered Kissinger’s nod a continuing mandate.
Given the export imperative under which the Israeli government operates, this 1981 proposal from the chief economic coordinator in the Israeli cabinet, Yacov Meridor, should be taken with great seriousness:
" We are going to say to the Americans, ‘Don’t compete with us in South Africa, don’t compete with us in the Caribbean or in any other country where you can’t operate in the open.’ Let us do it. I even use the expression, ‘ You sell the ammunition and equipment by proxy. Israel will be your proxy,’ and this would be worked out with a certain agreement with the United States where we will have certain markets…which will be left for us. "