Israel is an Example of an Economy Hijacked by Military-security Interests

Israel is an Example of an Economy Hijacked by Military-security Interests

Although the U.S has the world's largest military industrial complex, Israel has the largest ratio of its economy dedicated to the military and security industry -   October 3, 14
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Shir Hever is an economic researcher in the Alternative Information Center, a Palestinian-Israeli organization active in Jerusalem and Beit-Sahour. Hever researches the economic aspect of the Israeli occupation of the Palestinian territory, some of his research topics include the international aid to the Palestinians and to Israel, the effects of the Israeli occupation of the Palestinian territories on the Israeli economy, and the boycott, divestment and sanctions campaigns against Israel. His work also includes giving lectures and presentations on the economy of the occupation. He is a graduate student at the Freie Universitat in Berlin, and researches the privatization of security in Israel. His first book: Political Economy of Israel's Occupation: Repression Beyond Exploitation, was published by Pluto Press.


Israel is an Example of an Economy Hijacked by Military-security InterestsSHIR HEVER, TRNN PRODUCER: The HIS published a report on June 24 describing the top arms exporters and importers in the world. It is a well-known fact that the United States is the largest weapons exporter in the world. U.S. weapon companies keep the world outfitted with a constant supply of guns, missiles, artillery, fighter planes and bombers, helicopters, tanks, warships, and bombs. Even though the Cold War is over, no country threatens to invade the United States, and the U.S.'s nuclear arms arsenal is sufficient to wipe out life on the planet, the military-industrial complex succeeds in finding new markets for even more conventional and unconventional weapons.

U.S. President Dwight Eisenhower, the president who coined the term military-industrial complex, has referred to the economic implications of a high expenditure on arms in his "Chance for Peace" speech from 1953.


DWIGHT D. EISENHOWER, U.S. PRESIDENT: Every gun that is made, every warship launched, every rocket fired signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed.

This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some 50 miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.


HEVER: Number six on the list of weapon exporters is Israel. Israel may be the sixth weapon exporter in the world, but it is the largest arms exporter in per capita terms. Indeed, while the U.S. has the largest military-industrial complex in the world, Israel has the largest proportion of its economy dedicated to the military-industrial complex.

A good way to estimate the size of the military-industrial complex is to compare the proportions of public expenditure on defense. According to SIPRI, the Stockholm International Peace Research Institute, Israel spends 8.4 percent of its GDP on defense, putting it in the third place worldwide, and almost twice as much as the U.S., which is seventh place in the world.

But SIPRI's data doesn't take into account the massive investment of natural resources, especially land and labor, which are used by the Israeli army, police, and prison systems without payment. Approximately half of the territory of Israel is controlled directly or indirectly by the army, and about half of the Israeli citizens serve in the army without salary for one to three years. If those facts are taken into account, it becomes clear that Israel is the world's most militarized state.

It should be emphasized that the arms industry is built upon reciprocal purchases. Arms deals are often two-sided, meaning that when one country sells military equipment to a second country, the second country is expected to buy something from the first. This tradition intensifies the arms proliferation and creates an unnecessary stockpiling of arms by countries who are at peace.

The problem is that where the army's outfitted with new shiny toys, generals and politicians sometimes develop the urge to try them out and go on the offensive. The arms trade is therefore a hazard to peace and to security for all residents of all countries.

Because of the massive investment of resources on security and the army, Israel suffers from high levels of poverty and crumbling social services. The current Israeli government debated the urgent need to cut military expenditures and eventually approved some minor cuts to the defense budget. But the Israeli system allows the Ministry of Defense to keep the revenue from arms sales and use them to further boost its own budget. Therefore, despite the government's efforts, the actual budget of the Israeli Ministry of Defense is expected to grow, although the Israeli Ministry repeatedly exceeds its budget. In 2012, it spent about one and a half billion dollars more than the budget approved by the Israeli parliament, the Knesset.

The U.S. continues to give Israel military aid to the tune of $3 billion every year, with plans to expand aid to $4 billion annually. The aid ensures high profits for the U.S. arms companies. The U.S. also buys military equipment from Israel in reciprocal deals, contributing to the Israeli military-industrial complex.

More importantly, when the U.S. shows its support for Israel, it also legitimizes Israel's use of force. Israel intensifies the violence in the Middle East and contributes to sales of the arms industry worldwide.


BARACK OBAMA, U.S. PRESIDENT: Four years ago, I stood before you and said that "Israel's security is sacrosanct. It is non-negotiable." That belief has guided my actions as president. The fact is, my administration's commitment to Israel's security has been unprecedented. Our military and intelligence cooperation has never been closer. Our joint exercises and training have never been more robust. Despite a tough budget environment, our security assistance has increased every single year. We are investing in new capabilities. We're providing Israel with more advanced technology--the types of products and systems that only go to our closest friends and allies. And make no mistake: we will do what it takes to preserve Israel's qualitative military edge--because Israel must always have the ability to defend itself, by itself, against any threat.


HEVER: The massive investments in the military-industrial complex causes immeasurable suffering, injury, and death to the Palestinians living under Israeli occupation, it puts Israel in a state of deep socioeconomic crisis, and it costs U.S. taxpayers billions of dollars that could have been used to provide much-needed services in the U.S. But on the other hand, it creates profit for the arms companies. Lockheed Martin had a profit in 2012 of over $4.4 billion. Boeing had a profit of $3.9 billion that year.

This is Shir Hever for The Real News.


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