By: Prof. Dr. Walid ‘Abd al-Hay.
(Exclusively for al-Zaytouna Centre).
If the science of “political economy” is concerned with the mutual effect between economics and politics, as suggested by Adam Smith, David Ricardo and Karl Marx during the 18th and 19th centuries, then arms trade represents the most visible manifestations of this mutual influence. For this trade includes the economic dimension of buying, selling, profiting, competing and all known market mechanisms, its political motives—are no less important than its economic ones-whether ideological or geo-strategic at the local, regional or international level. According to the considerations of the state decision-maker, sometimes economic factors may push political factors aside, other times they may be subjected to them, and this analysis applies to both the arms sellers and buyers.
Since Israel is among the countries that are expanding and have a high profile in the world arms trade, studying how Israel works in this field reveals that this trade is used for both economic and political purposes sometimes, and at other times one dimension could prevail over the other. For the political and economic dimensions may exchange positions in accordance to Israeli priorities, which will be clarified in the following.
The Beginning of Israel’s Arms Industry
In the early 1920s, Zionists thought of establishing military industries by having small and secret “workshops” hidden from the British Mandate authorities in Palestine, despite the latter’s support of the Zionist movement. These workshops were making grenades and rifles, then in 1933, an official announcement was made about the establishment of Israel Military Industries (IMI), which gradually evolved with the help of different western aid. Now it is the largest in this field in Israel. As for the use of Israeli arms trade to achieve political aims, it began early with Israel’s first Prime Minister David Ben-Gurion, who saw that for Israel to obtain international legitimacy, it needs to broaden its relations with distant countries, especially the colonies that seek independence and arms to be smuggled to them. This way Israel could ensure mutual diplomatic recognition at their independence, provided that this does not affect strategically the relations of Israel with the colonial countries. The first clear beginnings in this field was with Myanmar (formerly Burma) in 1954, which paved the way later, in 1955, for the first official visit of a foreign prime minister (Burmese Prime Minister U Nu) to Israel. Such trade continued to develop until Israeli arms sales in 1980s reached 25% of Israel’s exports. Israel has the largest security industry in relation to the economy of any country in the world, exporting weapons to 130 different countries. 
It is necessary to point out here three important issues: 
1. Israel refused to join the 82 states that have ratified the Arms Trade Treaty in 2012, which entered into force in 2014. The Israeli justification for not signing was that this agreement links the arms trade with the commitment to human rights, thus it could restrict its dealings. When a group of human rights activists and academics tried to identify the Israeli role in providing weapons for ethnic cleansing in a number of countries, the Israeli government refused them access to the arms trade files—including light weapons—on the pretext of “security concerns.” When this matter was appealed to the Israeli Supreme Court, it sided with the Israeli government. This court position was evident when a case was appealed to the Supreme Court to permit exposure of Israeli arms trade to Sri Lanka’s Sinhalese forces in 2009. These forces exterminated around 75 thousand civilians and combatants, and after that the army chief of staff responsible for the genocide was appointed the nation’s ambassador to Israel. 
2. It should also be noted that Israel deals with the private security companies, an issue that we had discussed in a previous study. These companies buy and transfer weapons for Israel’s interest, especially in covert operations. 
3. It is noted that in Israel only 20% of the defense budget , which include arms trade, are discussed by the Israeli Ministry of Finance and the Knesset, while the other 80% are not discussed. In 2006, the Israeli Defense Export Controls Agency (DECA) was established as an integral department of the Israeli Ministry of Defense, but the number of its employees was very small, which makes such a body merely a façade for political propaganda. For example, in 2012, the Agency’s employees were only three, while the military exports registry included 6,784 individuals and companies that were collectively issued 19 thousand marketing licenses and 8,716 export licenses. According to data presented by the Defense Ministry to the Supreme Court, after raising the arms sales issue by human rights groups, 400 thousand marketing and export licenses had been issued by the end of 2013. According to human rights groups estimates, Israel has sold arms to over 130 countries over the past few decades. Most of them committed human rights violations or ethnic cleansing, as in the Balkans and many dictatorships in Latin America.  So how can a department with those very few observers monitor all this massive number of arms sales?
It’s important to discuss here Spyware technology, a field in which NSO Group Technologies company is prominent. The NSO initials stand for Niv Carmi, Omri Lavie and Shalev Hulio, where the last two are reported to be graduates of Israel’s vaunted military intelligence Unit 8200.  NSO was founded in 2010, and its spyware Pegasus allows remote monitoring of smartphones. The company employs approximately 500 people as of 2017, based in Herzliya, near Tel Aviv.
NSO claims that its technology is only used by law enforcement agencies around the world to snare criminals, terrorists and paedophiles. Some studies indicated that NSO software was used in an unauthorised access against journalists and human rights activists. It was also used in government espionage against Pakistan, and played a role in the killing of Saudi journalist Jamal Khashoggi in October 2019. NSO was sued by WhatsApp and its parent company Facebook for its violation of the US federal law Computer Fraud and Abuse Act (CFAA).  NSO has licensed the software to dozens of governments, including Saudi Arabia, Bahrain, the United Arab Emirates and Morocco.  It sales increased from $40 million in 2013 to $125 million in 2018. 
The Israeli Economic Status in International Arms Transfer
Researchers divide the countries of arms production and sales, quantity and quality wise, into five levels, where Israel is in the third one. Israel’s share of arms exports in 2014–2018 was 3.1% of international arms exports, ranking eighth globally and increasing 1% from those of 2009–2013. Thus, there was a 60% increase in the Israeli share of arms exports from 2009 until 2018, placing Israel first in terms of the percentage of increase in sales among the top ten exporters. The main three clients of Israel are India (46% of Israels total arms exports), Azerbaijan (17%) and Viet Nam (8.5%), making the total of 71.5% of total Israeli arms exports. 
Israel is the world’s largest arms exporter in relation to its Gross Domestic Product (GDP) reaching 1%, whereas Germany 0.88%, Russia 0.49%, US 0.17%, France 0.17% and Britain 0.16%. 
If we look at Table 1, we’ll find that during the nine years 2010–2018, the sales of Israeli arms accounted for 18.21% of the total Israeli trade deficit. This means that the trade deficit would have increased by 18.21% was it not for the arms sales, indicating clear economic importance. For the total Israeli arms sales (including arms export orders), in 2017 and 2018, totaled $16.4 billion,  placing Israel eighth globally. Its share of global arms export increased from 2.1% in 2009–2013 to 3.1% in 2014–2018,  while its sales increased by 77% between the two periods 2010–2014 and 2015–2019.
Considering the ranking of the most important Israeli companies in arms production and sales, and comparing them to other arms production companies in the world market, we find the following: 
1. Excluding Chinese companies (due to lack of data), Israeli companies are ranked among the largest arms companies worldwide, where Elbit Systems ranked 28th, Israel Aerospace Industries (IAI) 41st, and Rafael 45th, i.e., they are among the top 50.
2. According to the 2018 figures, Israeli defense exports were distributed as follows
• 46% to Asia and the Pacific.
• 26% to Europe.
• 20% to North America.
• 6% to Latin America.
• 2% to Africa.
Sales of weapons are distributed, according to kind, as follows:
• 15% drones.
• 14% radars and electronic systems.
• 14% arms development and aviation.
• 12% Building military bases.
• 45% traditional weapons.
3. Israel’s 2017 annual figure for arms export orders were worth $9.2 billion, while in 2018 it decreased to $7.5 billion.
4. Israeli arms supply includes the following (which vary according to import country): 
• Selling arms and advanced electronic systems.
• Selling small arms and light weapons.
• Maintenance, overhaul and modernization of military equipment in the importing country.
• Brokering arms sales between countries other than Israel, which happened between Serbia and some African countries like Chad, Niger, Nigeria and Uganda, between Ukraine and Equatorial Guinea, or between the US and Somalia. Sometimes falsified end-user certificate are used.
• Building partnerships with industrial or research institutions in developed countries to acquire technical skills, as is often the case between Israel and the US. This has prompted the US to impose sometimes restrictions on Israel, especially when Israeli cooperation is with countries that Washington considers among its opponents, as was the case in 2004, when China sent Israel drones for upgrading, arising a crisis in US-Israeli defense relations.  In 2020, an Israeli-Indian agreement was concluded in the same field, where Hindustan Aeronautics Limited signed a memorandum of understanding with Israel’s Elbit System to jointly develop rotary military drones.  India is motivated by the reports indicating that Israel ranks first worldwide in the volume of exports of drones, where in 2005–2012 its drone sales reached $4.62 billion. Furthermore, Israel is also among the most productive countries of Drone Dome, which is an interception system that uses a laser beam in order to locate and destroy hostile drones. Israeli defense electronics company Rafael Advanced Defense Systems is known for manufacturing such a weapon. 
The Political Dimension of Israeli Arms Sales
The political motivation of Israeli arms sales is illustrated as follows:
1. Strengthening the recognition of the “legitimacy” of Israel, by establishing relations with conflicting parties, especially in developing countries. One recent quantitative study indicates a strong correlation between arms exports and right-wing governments as well as coalition governments, which is stronger than the correlation between arms trade and leftist states. There is also a relationship between the export of arms from right-wing countries and areas of armed conflict in particular, such as civil or border wars, etc.  At the beginning of Israel’s establishment, its arms sale interest was very much driven by having diplomatic relations with other world countries rather than gaining financially. By 1967, Israel had established official relations with 33 of 41 African states. However, after the Arab-Israeli agreements, especially with Egypt, and when most African countries restored their relations with Israel, its arms exports became more strongly motivated by its strategic military and economic aims rather than diplomatic ones. Remarkably, after the Iranian revolution in 1979, arms sales experienced some change, where Israeli investment in arms sales in Africa coincides with countering the emerging influence of Iran, especially in the west and central part of the African continent. In 2009, Avigdor Lieberman visited Africa in the first visit of an Israeli foreign minister to Africa in 20 years, stating that curbing Iranian influence is one of the aims of his visit. However, what’s striking was the composition of the delegation that may reveal the nature of the topics discussed, for Lieberman’s small official delegation consisted of officials from the foreign, finance and defense ministries, and the intelligence services, in addition to representatives of Israeli arms companies, who made up the majority of the 20-person business delegation with him. Also, the visit aimed to follow-up on African-Islamic movements that may show sympathy for the Palestinian resistance movements, which was evident in the statements issued later by Kenya. 
Another example of political motives is illustrated in an Israeli study stating that one of Israel’s main contributions to Africa was military aid, which was provided in the form of conventional and paramilitary training and, to a lesser extent, by the sale of arms. By 1966, 10 African states had received some direct military assistance from Israel, and, in each case, the aid was provided to individuals who were either influential or potentially influential. For example, Israel trained Mobutu Sese Seko, the General of the Congolese army, who, two years later, became that nation’s President. Another example was when Israel supported the revolutionary government under Haile-Mariam Mengistu, after the fall of Haile Selassie, where 25–30 Israeli military advisers had been posted to Ethiopia, providing only low-level military training for the Ethiopian troops. They were also carrying out intelligence work for the Mossad. Having begun selling the new government small amounts of arms, Israel succeeded in negotiating an exchange of arms for Ethiopian Jews in 1977.  Israel also played a role in Idi Amin’s coup in 1971 in Uganda, and these relationships remained for the next eight years. 
2. Building geo-strategic alliances to employ them in the conflict, especially against liberation movements in the Arab world or outside. Israeli arms exports to Africa or Latin America and some Asian countries have been often an important factor in reversing military balances in local conflicts, for the benefit of the pro-Israel policies forces, evident in the following table:
Some sources estimate that Israeli arms sales increase during the periods of unrest in some areas, especially during the periods of civil wars. For example, in 2014, 40% of Israeli arms sales were to Africa,  while in the same period, 43 African countries out of 53 were situated in the negative zone of the political stability index. 
The sale of Israeli weapons interferes with other political and economic operations, as was the case of diamond mining operations in some African countries. A UN panel of experts accused Israel of being involved with many African countries through the diamond and arms trade triangle to finance settlement in the Palestinian occupied territories. Most of the accused Israeli diamond traders in the African countries like South Africa, Ivory Coast, Liberia, Congo or Sierra Leone, were retired Israeli army and former Mossad agents. The United Nations has described the Israeli diamond trade as a “bloody diamond trade,” and in 2009, the UN, via a panel of experts, formally accused Israel of being involved in the illegal import of diamonds from Africa. The report accused Israeli traders of having a direct relationship with the bloody diamond trade, particularly in the Ivory Coast and Sierra Leone. Although the UN Security Council passed several resolutions in the late 1990s banning and restricting the import of rough diamonds from conflict zones in Africa in order to prevent the use of financial revenues to prolong conflicts, Israel continues its theft. Nothing is more indicative of the severity of the situation than the period that witnessed a dangerous escalation in the civil war index in the African continent. The wars aimed to control the diamond mines, which brought profits to Israel up to nearly a billion dollars, most of which funded Israeli arms companies and the building of settlement projects in the West Bank and Jerusalem. 
3. Building local and regional intelligence networks to collect and exchange information with other countries. Numerous academic sources indicate that Israel focuses on its intelligence operations on “spyware technology,” in order to use it and make it available to its allies. Israel would employ individuals in companies producing sophisticated spy devices, who would spy later for it, and then Israel would sell it to its allies, so as to deepen its relations with them. This matter is evident, for instance, in recruiting “hackers” to infiltrate computer networks. 
4. Facilitating money laundering transactions obtained from illicit arms sales. In 1989, the Financial Action Task Force (FATF) was founded, which currently has 37 full-member countries. It is an international body that sets standards in the fight against money laundering and terror financing. In 2003, FATF placed Israel on the black list of money laundering and other various operations, including arms sales. However, Israel, by using diplomacy, was accepted as a FATF member in December 2018, despite reports that Israel’s immigration policies have allowed immigrants from France to “launder money in Israel.” 
5. The relationship between the arms trade, human rights and political corruption: The Israeli Foreign Ministry has objected in 2014 to a new bill to place restrictions on Israeli arms sales to foreign countries “implicated in severe human rights violations.”  The sale of arms is also linked to the role of political corruption, where Joe Roeber estimates that about 40-45% of corruption in total world trade in all commodities is concentrated in arms sales.  For example, the US has imposed sanctions on retired Israeli major general, Israel Ziv, for hiding from the US the fact that he used an agriculture company as cover for the sale of around $150 million worth of weapons to south Sudan.  Moreover, the crash of the Israeli El Al plane in the Netherlands in 1992, carrying chemical ingredients needed to make the highly toxic nerve agent sarin, has proved the secret nature of most Israeli activities in the field of armaments, and this incident caused a diplomatic crisis between Israel and the Netherlands. 
Data provided by human rights bodies indicate that Israeli arms sales go mainly to countries of civil wars and separation tendencies by the minorities of these countries. This is evident in the Israeli sales to Rwanda, prior to the 1994 ethnic cleansing, perpetrated by the Hutus against the Tutsis minority. The daily average of casualties reached eight thousand, especially in the first three months of the massacres. This is while keeping in mind the fact that Israel had a central role in building Rwandan security and military institutions during the 1963–1973 period.
Amnesty International has reported that Israeli companies continue to export weapons to countries that systematically violate human rights, despite international arms embargos against countries that abuse human rights. Extensive Amnesty report has cited Israeli sales to eight countries who violate human rights, including South Sudan, Myanmar, the Philippines, Cameroon, Azerbaijan, Sri Lanka, Mexico and the UAE. 
6. Israel provides arms to build relations with political organizations in the Arab countries: To objectively understand this matter, ideological biases must be put aside. Large numbers of studies, articles, and even political statements have exposed Israeli relations, including security, military and political ties, with Arab political movements, “minorities” in particular, and some prominent opposition figures in Syria, Iraq, Libya, Egypt, Sudan, etc, especially in the 2011–2020 period. The Israeli help, in this case, is more likely to be geo-strategic rather than economic. 
1. It is not possible to separate the weight of the military establishment in the Israeli political decision from its use of the arms sales to reinforce its position in the decision-making process.
2. Israeli arms sales generally target the most dictatorial and human rights violating country, or are invested in civil wars or power struggles, especially in developing countries.
3. Money laundering and intelligence operations intertwine with arms sales in general, however, according to international bodies reports or academic studies, this matter is very clear in the Israeli case.
4. When compared to most countries leading arms trade, Israeli arms sales are increasing, on one hand, and accelerating on the other.
1. It is noted that the Israeli arms sales market is expanding to include countries that were significantly closer to Palestinian rights, such as Vietnam, India and some African countries. This requires the Palestinian resistance forces to communicate with these countries, invest in their previous political relations to adhere to their traditional positions. Hence, it requires a great deal of wisdom and deep diplomatic thinking.
2. Some Arab countries and even some Arab political movements are getting closer to receiving advanced military technology or conventional weapons from Israel. This issue is clear in the cases of national Arab minority movements and some Arab regimes. All documents have indicated that there was an Israeli role in arming the secession movement in southern Sudan, and the Sudanese response was by holding public meetings between the Sudanese political leadership and Israeli Prime Minister Benjamin Netanyahu. This indicates the necessity of continuing the dialogue between the resistance and Arab national political forces in those countries without any delay.
3. Reviving Arab studies on the dangers of the Israeli nuclear project on the Middle East region is necessary, and the media must cover these dangers, the Israeli research in the field of chemical and biological weapons and the participation of Israeli scientists in these activities. The former Israeli agreements with the apartheid regime in South Africa, its nuclear cooperation with it and their nuclear tests have become known after what was published in this context. It must be noted that Israel did not sign any of the non-proliferation agreements, whether nuclear, biological or chemical, in 1970, 1975 and 1997, respectively.
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 It is necessary to distinguish between the annual sales and the purchase “orders” executed in subsequent years, where the factories start manufacturing weapons required by the buyer (in the absence of the required quantity or quality) to deliver them later.
 Trends in International Arms Transfers, 2018, SIPRI Fact Sheet, March 2019.
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 For more details see Inside the Unlikely, Unofficial Ties Between Israel and the Kurds, Haaretz, 10/12/2019, https://www.haaretz.com/middle-east-news/syria/.premium.MAGAZINE-israel-and-the-kurds-an-unlikely-and-unofficial-relationship-1.8234659; Lysithea Renaud, Kurdistan-Israel Relations, site of Political Holidays, 15/9/2019, https://www.politicalholidays.com/post/kurdistan-israel-relations; Sergey Minasian, The Israeli-Kurdish Relations, 21st CENTURY magazine, Noravank Scientific Educational Foundation, No. 1, 2007, http://www.noravank.am/upload/pdf/256_en.pdf; Eyal Zisser, The Maronites, Lebanon and the State of Israel: Early Contacts, Middle Eastern Studies Journal, Taylor & Francis, Ltd., Vol. 31, No. 4, Israel (Oct., 1995); Bruce Maddy-Weitzman, Morocco’s Berbers and Israel, Middle East Quarterly journal, Middle East Forum (MEF), Winter 2011; Is treating Syrians a humanitarian gesture or strategic policy for Israel?, The Times of Israel, 20/3/2016; Lior Lehrs, Egyptian Plague or Spring of Youth? The Israeli Discourse regarding the Arab Spring (The Israeli Institute for Regional Foreign Policies, 2012); and In interview with Israeli paper, top Libyan rebel calls for Israel’s support, The Times of Israel, 12/6/2020, https://www.timesofisrael.com/in-interview-with-israeli-paper-top-libyan-rebel-calls-for-israels-support/
 Revealed: how Israel offered to sell South Africa nuclear weapons, The Guardian, 24/5/2010, https://www.theguardian.com/world/2010/may/23/israel-south-africa-nuclear-weapons
Al-Zaytouna Centre for Studies and Consultations, 9/7/2020