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A military industrial complex is born

Israel was born out of war. Its very independence was achieved through the use of force, which endowed Israel with a victory over its surrounding Arab countries. Ben Gurion, in a speech he addressed as the war ended, praised the industrial and technological capability of the fledgling state as a factor that contributed in supplying arms to the state s army and hence had an important part in the victory. We should nurture and enhance this advantage of ours , he stated[i]. And so we did.

The building of a domestic military industry was based, at least in its inception, primarily upon fear. The Jewish state was established in the midst of a hostile environment by a Holocaust-traumatized nation that was determined to never again be led as lambs to the slaughter [ii]. The main preoccupation of the state was to keep the IDF prepared for any attack[iii]. During Israel s first years as a state, France realized Israel s major dependence on arms suppliers. In June 1967, France declared an arms embargo on Israel in response to Israeli actions in the Six Day War. That was a watershed in arms production in Israel. The state decided not to rely any longer on foreign suppliers and started investing capital in establishing a large-scale arms industry. Within a few years, Israel had a highly advanced and technologically sophisticated arms industry, unparalleled amongst developing countries, an industry that could well underpin the self-reliance policy[iv].

What have we got? Inventory:

Ninety-five percent of the arms produced in Israel are manufactured by 6 companies, three of which are state-owned. The state-owned companies include Israel Aircraftt Industries (IAI), Israel Military Industries Ltd (IMI) and the National Armaments Development Authority (Rafael). In the private sector the largest company is Elbit Systems. Tadiran and Elisra make good profits as well[v]….

[i] Keret, Moshe, The Military Industries- an Indispensable Asset to the National Security of Israel and Its Economy , Submitted to Forth Herzliya Conference, December 2003 , p. 1 http://www.herzliyaconference.org/_Articles/Article.asp?ArticleID=1180&CategoryID=158

[ii] Chairman of Israel Atomic Energy Commission (IAEC), Ernst David Bergmann, in 1952. http://www.globalsecurity.org/wmd/world/israel/nuke.htm

[iii] From 1973 to 1982 nearly 50 per cent of the state budget went on the IDF, although a substantial part of this was paid for by US military aid. See: Turner, Mandy, Arming the Occupation: Israel and the Arms Trade , http://www.caat.org.uk/information/publications/countries/israel-1002.php#exports

[iv] Naaz, Farah, Israel s Arms Industry , in Strategic Analysis: A Monthly Journal of the IDSA March 2000 (Vol. XXIII No. 12) http://www.ciaonet.org/olj/sa/sa_00naf01.html. . Assistance came later from the US, as I will elaborate further.

[v] For more information on the biggest military firms profits, see: D&B Largest Industrial Companies by Sales Volume http://duns100.dundb.co.il/duns100/ts.cgi?tsscript=ranking/E59a1&duns=600065049