Return to the Cafes: Israel’s Economics of War

By Richard Irvine
On the 12 January Colonel Adam Zussman of Dan Region, Israeli Home Front Command issued a dramatic warning: ‘danger has returned to Tel Aviv. Under any war scenario, it will be hit by a large number of missiles, missiles that are precise and lethal.’ Elaborating he declared, ‘This time, in contrast to the Second Lebanon War and Operation Cast Lead, long-range weapons are in large quantity, and they are more lethal.’ His assessment then went on to predict mass casualties, destruction of infrastructure and the imposition of emergency evacuation procedures. It therefore seemed oddly out of place when after upbraiding the complacent citizen he concluded his remarks by declaring his ‘goal is to return citizens to cafes as quickly as possible.’  
Surely one would have thought his goal would have been saving lives, minimumizing casualties or even trying to prevent the next war? How then is one to account for this odd remark? Is it evidence of Israeli military confidence, or stoicism, or indeed the very complacency that Zussman himself warns of? Or is it perhaps indicative of Israel’s whole approach to the conflict – that war is an inevitable but inconvenient nuisance and victory is preordained?  
Certainly the acceptance of conflict as an inevitable consequence of the Zionist project has a long pedigree in Zionist thought and was perhaps most brilliantly articulated in Ze’ev Jabotinsky’s “Iron Wall Doctrine” and in a 1956 funeral oration by former Chief of Staff Moshe Dayan:
“We are a generation of settlers, and without the combat helmet and the barrel of a gun, we will not be able to plant a tree or build a house. This is the fate of our generation, and the choice before us is to be ready and armed, strong and hard, or have the sword snatched from our hands and be cut down.”
Yet Zussman’s attitude to the next war seems to lack even the moral ambivalence of earlier Zionist leaders. His casual nonchalance moves beyond the view that war, whilst it may be inevitable – an occupation[al] hazard so to speak – is still a terrible evil to be avoided if possible. Puzzlingly Zussman does not concern himself with such things.
A possible explanation for this indifference was given by Naomi Klein in 2007 when she suggested that Israel had lost the peace incentive. In her analysis, each new war, far from being a disaster for Israel, actually brings an economic bonanza in its wake as defense and homeland security exporters scramble for new global contracts. Israel’s “rapid expansion of the high-tech security economy,” she maintains, “created a powerful appetite inside Israel’s wealthy and most powerful sectors for abandoning peace in favour of fighting a continual and continuously expanding War on Terror.”

How profitable this continual and continuously expanding war is can be quickly gleaned from looking at Israel’s arms and homeland security industries. Figures from the Stockholm International Peace and Research Institute place Israel fourth in the world in terms of arms exports with 4 companies in the top 100 worldwide. Indeed, Israel’s arms sales have soared since 2000. In 2005 Business Week declared that 2004 had been “A Banner Year for Israeli Arms Exports” and that Israel accounted for 10% of the global arms trade. Since then however the industry has only gone from strength to strength, sales up from the $3.6 billion of 2004 to $6.2 billion in 2008 and estimated at $7 billion in 2009. 
In October 2009 the Israeli Defence Ministry announced it had signed export deals worth $20.3 billion between 2005 and 2008. Sibat, the Israeli government coordinating body for arms exports currently hosts 23 representatives abroad and lists 196 export companies on its database. Israel’s distinct competitive advantage and unique selling point deriving of course from the research and development opportunities afforded by the occupation. Opportunities that permit the testing and employment of weapons and surveillance systems in “live environments.” 
No wonder then that Magal CEO Jacob Even-Ezra was able to state, “People believe we are the only ones who have experience testing this equipment in life.” Similarly the Israel Military Industries website boasts that by, “Sustaining Israel’s military and security forces for more than 75 years, IMI has gained unique know-how and expertise in homeland security and counter-terror operations.” Elbit subsidiary Elisra further promotes “its proven capabilities in ELINT, COMINT, IR, LASERS and C4I,” and notes, “The vast experience the company has accumulated in solutions for conventional warfare has been adapted for Low Intensity Conflict /Asymmetric Warfare, and in particular, to combat terror.” All experience gained by controlling and occupying Palestine.
And indeed the Gaza War proved a particular boon to the Israeli economy. Israeli Aerospace Industries CEO Itzhak Nissan recorded that despite a 68% drop in the sales of non-military aircraft, “In the first half of 2009, IAI booked new orders worth approximately $3 billion, including a significant contract for the sale of air defence systems to an overseas customer, driving the company backlog to a record $8 billion.” Likewise Rafael, the largest employer in northern Israel, recorded a record breaking $112 net million profit in 2009, up from $46 million, and an order backlog worth $3.4 billion. Meanwhile the largest arms manufacturer of all, Elbit, records a 5 year annual growth dividend rate of 37.52%.
Indeed Elbit is currently using “expertise” gained in constructing the illegal West Bank Wall and Gaza ‘fence’ to help construct the $2.5 billion “virtual” wall on the US – Mexican border. Its marketing describing its latest product as a “highly sophisticated virtual border security system [with] multi-layer border control and management system deploying special border surveillance posts. These autonomous posts include observation systems mounted on towers, placed in strategic locations along the border.” Apart from the “virtual” tag, all this is familiar to imprisoned Palestinians.

But it is not just ‘products’ that these companies sell, increasingly their ‘expertise’ as technicians of oppression is in demand and many now also provide training and consultancy services. Government owned Israel Military Industries being merely one that maintains an “Academy for Security and Anti-Terror Doctrine and Training.” And indeed, despite the Goldstone Report and numerous other reports documenting Israeli forces contempt for human rights, in July 2010, prior to deployment to Afghanistan, US Marines conducted joint training operations in Israel. Israeli Lt. Colonel Lazros chillingly declaring “there are many lessons we can learn from each other. No wonder then that Forbes Magazine has declared Israel “the go-to country for anti-terrorism technologies.”  
And indeed this phenomenon is not restricted to the police and military but finds a grotesque outlet in the civilian orientated “Ultimate Mission Tour” whose delights include: “An inside tour of the IAF unit who carries out targeted killings; live exhibition of penetration raids in Arab territory; observe a trial of Hamas terrorists in an IDF military court; first hand tours of the Lebanese front-line military positions and the Gaza border check-points; inside tour of the controversial Security Fence and secret intelligence bases; meeting Israel’s Arab agents who infiltrate the terrorist groups and provide real-time intelligence.”
Writing in 1795 US President James Madison reflected that “Of all enemies to public liberty war is, perhaps, the most to be dreaded… No nation could preserve its freedom in the midst of continual warfare” However, it appears Madison was wrong, by establishing itself as a global leader in arms Israel has perfected an economics of oppression that permit it to be free whilst it imprisons others. Peace then for these modern day technicians of war would not merely be unwelcome but could be financially devastating. As economist Shir Hever notes: “If you talk about military exports as proportion to the size of the economy, then Israel is the biggest exporter of weapons in the world.  And that means that the Israeli business model, or the business model of the Israeli economy… is constant conflict.  Peace would not be good for the Israeli economy… and would have an immediate negative impact on Israeli exports.”
What this means for the peace process is neatly summed up by Israeli investment banker, Len Rosen: “It’s security that matters more than peace.”  Maybe this explains why Colonel Zussman won’t be choking on his coffee after the next war.

– Richard Irvine is based in Belfast, Ireland. He contributed this article to

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