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1 ~SRArElL ANID llal~in AMrE~CA: JHrE M~lL~JARY CONNirECJ~ON

2 ISRAEL AND LATIN AMERICA: THE MILITARY CONNECTION BISHARA BAHBAH with LINDA BUTLER Foreword by Stanley Hoffmann M in association with the MACMILLAN PALGRAVE MACMILLAN

3 @ Institute for Palestine Studies 1986 Softcover reprint of the hardcover 1st edition 1986 All rights reserved. First published in the United Kingdom by THE MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world ISBN ISBN (ebook) DOI / Library of Congress Cataloging-in-Publication Data Bahbah, Bishara. Israel and Latin America: The Military Connection. Includes index. I. Munitions-Israel. 2. Military assistance, Israeli-Latin America. 3. Israel-Military relations Latin America. 4. Latin America-Military relations- Israel. I. Butler, Linda, II. Title. UF535.I7B '.45623' iv

4 The Institute for Palestine Studies would like to thank Linda Butler for her extensive editing of the original manuscript. The Institute for Palestine Studies, founded in Beirut in 1963, is an independent, non-profit Arab research and publication center, which is not affiliated with any political organization or government. The opinions expressed in its publications do not necessarily reflect those of the Institute. v

5 To the memory of my father Assad Rizek Bahbah for the sacrifices he made to educate his children vii

6 Contents FOREWORD ACKNOWLEDGMENTS xiii XV 1. ARMS ExPORTS AND IsRAELI GovERNMENT PoLICY 1 The Significance of Israeli Arms Exports 5 Problems of Arms Export Dependence 8 The Latin American Experience ISRAEL's ARMS INDUSTRY 19 Reasons for the Development of the Arms Industry 22 History of the Industry 26 The Elements of Success ISRAEL AND LATIN AMERICA 59 History of Israeli-Latin American Relations 61 Overview of Arms Sales 71 Emergence of Latin America as Israel's Major Arms Market 86 Constraints on Market Growth SOUTH AMERICAN CASE STUDIES: ECUADOR AND ARGENTINA 111 Ecuador 113 Argentina THE CENTRAL AMERICAN EXPERIENCE 141 Territorial Disputes 145 U.S. Human Rights Policy 147 ix

7 Fallout of the Sandinista Victory 149 Guatemala: A Special Case 160 Israel and the United States IsRAEL's ARMS ExPORT PoLICY: AN AssESSMENT 177 SELECTED BIBLIOGRAPHY 191 INDEX 203 X

8 List of Tables and Figures Tables 1. Israeli Arms Sales 4 2. Israeli Arms Customers by Region Major Israeli Arms Firms Foreign Investment in Israel's Military Industries Latin American Voting on the Palestine Question at the UN Latin American Voting on Israeli Issues at the UN Latin America in Israel's Foreign Trade Israeli Arms Exported to South America Israeli Arms Exported to Central America Territorial and Border Disputes in Latin America 88 Figure 1. Map of Latin America 62 xi

9 Foreword T his excellent study by Bishara A. Bahbah throws light on one of the most important developments of contemporary world affairs: the international arms trade. It is also an objective and searching contribution to the understanding of Israel's role in the world. The study documents the rise of Israel's arms industry, analyzes the reasons for it (the imperative of greater self-sufficiency above all) as well as its importance for the Israeli economy, and shows the decisive role played in the expansion of the arms industry both by the Israeli government and the U.S. government (particularly in the form of co-production and licensing agreements). Above all, this work is a case study. It describes the ties created by arms sales between Israel and several Latin American countries. These have turned to Israel as a major supplier not only because of the needs created by local disputes or the political importance of their military forces, but also because of Israel's willingness to tailor exports to such needs (e.g., counterinsurgency weapons) and to impose no restrictions for reasons of moral and political distaste (e.g., human rights). The paradox of Israel supplying the anti-semitic military junta of Argentina in the 1970s and early 1980s is one of the more unsavory aspects of this relationship. Furthermore, Bahbah's work is not merely descriptive. He provides a sober analysis of the motives of the actors and a critical but unimpeachable evaluation of the results achieved by Israel. He shows Israel's continuing dependence on the United States, both negatively-although Israel's arms exports to Central America soared when the United States under President Carter suspended shipments to repressive regimes, they fell when the xiii

10 Reagan administration reversed this course-and positively-the use of Israel by the United States as a proxy and a supplement to its own efforts. He also shows that the arms trade, although beneficial for the economy, has brought Israel few political benefits: almost none in South America and very limited gains in Central America. Indeed, the close ties between Israel and various dictatorships have had disadvantages-as in the case of N icaragua which froze and subsequently severed its diplomatic ties with Israel following the overthrow of the Somoza dictatorship and Argentina where the new democratic regime of President Alfonsin has tempered its military ties with Israel. It can only be hoped that future studies will examine other cases of arms exports, for instance those of France and of the United States, with the same dispassionate rigor and empirical thoroughness as this scholarly and thought-provoking book by a promising young writer on political affairs. Stanley Hoffmann Chairman, Center for European Studies Harvard University Cambridge, Massachusetts xiv

11 Acknowledgments T his study could not have been completed without the assistance and the contributions of many people. Much appreciation is due to Professors Stanley Hoffmann and Lisa Anderson of Harvard University. They both graciously agreed to supervise my doctoral dissertation from which this book has been developed. They spent much time reading and evaluating the manuscript. Much more significant to me, however, was their faith in my ability to research and write a manuscript of several hundred pages on a subject rarely written about. Professors Walid Khalidi and the late A.J. Meyer played an important role in helping me secure the financial resources needed to free me from other obligations and to allow me to concentrate on research and writing. Their recommendations to various foundations are greatly appreciated. Many thanks are due to the American Palestine Educational Foundation (subsequently known as the Jerusalem Fund), the Earhart Foundation, and the Department of Government and the Center for International Affairs at Harvard University for the financial aid they provided to cover my travel, research, and living expenses. During my travels in Latin America, I was helped by many people. Their indispensable assistance made it much easier for me to locate sources of information and to make my way around a region that I had never been to before. I would also like to thank my friends Walid and Nabil Shihadeh who had to listen to me, more than often, reading parts of my work to them. My wife, Heather, was very understanding whenever work on this book confined me and prevented me from being with her. XV

12 Finally, I would like to thank Mary Neznek of the Institute for Palestine Studies for coordinating and incorporating all the changes, one draft after another. Grateful acknowledgment is also made to the following for permission to reprint previously published material: Middle East Economic Digest for the tables from "Latin America and the Middle East," Middle East Economic Digest: Special Report, September 1981, and to the Middle East Research and Information Project for use of the table, "Foreign Investment in Israel's Military Industries," which appeared in "Israel: the Sorcerer's Apprentice," by Esther Howard, MERIP Middle East Report 13 (February 1983). xvi