Israel---Merwin Rodrigues

8/9/2019 Israel---Merwin Rodrigues

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ISRAEL

“ISRAEL”

M.M.S-I

PRESENTED BY:

• MERWIN RODRIGUES

MAP OF ISRAEL

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INDEX

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Sr. No Topic Page

No.

1 Int roduct ion 4

2 Pol i t ica l Condi t ions 5

3 Israel and the Wars 6

4 Hamas 11

5 Foreign Policy 13

6 Geo-Pol i t ica l af fa ir s 15

7 Macro Economic Condi t ion 16

8 Israel ' s Defence 18

9 India and Israel 20

10 Israel ' s In i t ia t ive 23

11 Summary 24

12 Recommendat ion 25

13 Annexure 26

14 Bibl iography 29

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INTRODUCTION

The S ta te o f I s rae l (Hebrew: ל א ר ש י ת נ י ד מ ,M edi na t Y i s rae l ) was

es tab l i shed on May 14 , 1948 a f te r near ly two thousand years o f Jewish d i spersa l . The 60 years s ince I s rae l i independence have been

marked by conf l i c t wi th ne ighbor ing Arab s ta tes and the Pa les t in ian-

Arabs . There have a l so been many nego t ia t ions , and peace has been

ach ieved wi th Egypt and Jordan . I s rae l ' s democracy has su rv ived

under d i f f i cu l t c i rcumstances and the coun t ry has p rospered desp i te

war , e thno- re l ig ious conf l i c t , boyco t t s , and mass immigra t ion and

te r ro r a t t acks . I t i s bounded to the nor th by Lebanon , the nor theas t

by Syr ia , the eas t by Jo rdan and the Wes t Bank , the sou thwes t by

Egypt wi th th i s border a l so be ing the border be tween As ia and

Afr ica . To the wes t o f I s rae l i s the Medi te r ranean Sea and the Gaza

s t r i p .

.

retrospect

But the good news was accompanied by bad news. In particular, since 1993 Israel experienced a sharpdeterioration in the balance on current account of the

balance of payments, which worsened in 1994, andeven more so in 1995. The balance on current account is defined as exports of goods and services, plusunilateral transfers from abroad (US grants,contributions from world Jewry, German restitution,

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immigrant and other private transfers) minus importsof goods and services. In 1990-92, as a whole, the

balance on current account was positive at $154

million. In the following three years, 1993-95, therewas a sharp deterioration with a total deficit of $7.8

billion, of which $4.1 billion was incurred in 1995alone. [All data regarding the Israeli economy arefrom the Bank of Israel Annual Report (Israel:Government of Israel, March 1996).] This deficit was

not the result of arms imports, which actuallydeclined. Estimates for the first quarter of 1996 showa continued deterioration with the deficit in the

balance on current account 25% higher than in thesame period a year earlier. [Data for the early monthsof 1996 are from Economic Developments in Israeland the World (Israel: Bank Leumi, July 1996).]

These deficits were covered, for the most part , byloans and a growing external debt.

If the budget submitted to parliament by the newgovernment in mid-1996, which focuses on cutbacksin government expenditures, is implemented, itshould reverse the adverse trends in the balance of

payments and reverse the recent up-trend in inflation.

The data do not suggest that the Oslo agreements hadany perceptible effect on the Israeli economy. Nor can one "blame" the Oslo accords for the problems

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which arose since 1993/1994. Israel's recenteconomic woes are attributable mainly to unwisegovern ment economic policies. One example is the

unusually large wage increases granted by thegovernment to public sector employees in 1993-96(soon emulated by other sectors) that stimulated verylarge increases in private consumption, imports andinflation. A second example is the provision by thegovernment of unusually large subventions to

politically-favored groups, aggravating the budgetarydeficit and indirectly the deficit in the balance of payments.

What all this tells us is that Israel's economic problems can be addressed only by the adoption andimplementation of appropriate economic policies.

Israel adopted some important new economic policiesin the mid-1980s which fostered efficiency, productivity, and profitability, and the favorable results

became very visible in the early 1990s. Wiseeconomic policies underlay Israel's prosperity, and

poor economic policies explain the problems thatarose in more recent years.

As the rest of this discussion will demonstrate, thesame is true of the Arab states where the problemsare far more deep-rooted. Wise domestic policieshold out the promise of prosperity. Only basic,

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fundamental economic changes can significantly

impro ve the performance of the Middle Eastern

economies, and provide jobs and decent incomes

for the vast army of unemployed and under-employed, the poor and downtrodden—not

interstate politics.

PEACE THROUGH GLOBALIZATION

Most political commentators are puzzled by the factthat Sharon, who has brought Israeli society to itslowest point ever in every respect, is so immensely

popular among the voters. The most commonexplanation for Sharon's high standing is that, in its

deep despair over the security and economicsituations, the Israeli public is clinging to thegrandfatherly figure that the Likudnik prime minister has cut for himself. Sharon, it is true, has always beena brilliant tactician, but his popularity has deeper roots than this grandfatherly image. Its roots lie in the

total collapse of the policy of peace throughglobalization, and vice versa, pursued by Labor between 1993 and 2000.

Historically, the power of the Labor party rested on ahighly mobilized economy, controlled in almost

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equal measures by the state and by the Histadrut. TheHistadrut was an umbrella political-economic labor organization on the Western European model (albeit

an extreme variety of that model), not a labor unionfederation like the AFL-CIO. While the Israelieconomy was at no time a socialist economy, for many years profit was not the only considerationdetermining economic policy. Nationalconsiderations, primarily the need to maintain full

employment among Jewish workers, operated to curbthe profit motive. With the rapid economic growththat began after 1967, political pressure wasmounting to "rationalize," or liberalize, the economy.This neoliberal impetus found its political expressionin the Democratic Movement for Change, a one-issue, one-election political party that won 15

Knesset seats in the 1977 parliamentary contest, bringing Labor down and allowing Likud to take power for the first time.

After it won the elections, Likud launched two drastic policy initiatives: economic liberalization and peacewith Egypt. While the former was in line with its

political principles, the latter came as a total surprise. Not long before that Begin had vowed to retire, whenhis time came, to Yamit, the town built by Israel innorthern Sinai. The explanation for this contradictionlies in the conjunction of the two policies: economic

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liberalization required, as a precondition, a reductionin state expenditures and therefore in the volume of the Arab-Israeli conflict.

Likud's peace policy turned out to be much moresuccessful than its economic one. The Histadrut,which Likud failed to capture when it captured thestate, opposed liberalization every inch of the way,and the only tangible result of the liberalizationefforts was an inflation rate that reached 450 percent

a year by 1985. At that point, Labor came to therescue, and the national unity government headed byShimon Peres and Yitzhak Shamir adopted a neweconomic policy of harsh anti-inflationary measuresand drastic liberalization. Parallel to that, the nationalunity government also extricated Israel from most of

Lebanon, where it had been mired, thanks to Sharon,since 1982.

THE DISAPPEARING "PEACE DIVIDEND"

The Oslo accords of 1993 were to be the capstone of this combined process of peace and economicliberalization. Initially, the accords paid off

handsomely in economic terms, allowing Israelicapital to make important strides in its effort tointegrate into the global economy, and attractingunprecedented foreign investment to Israel. As aresult, per

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capita GDP rose almost three times between 1980and 1998, from $5,600 to $15,100. But this "peacedividend" did not benefit the entire society. During

the rapid economic development that took place inthe 1990s, Israel moved from being the least unequaladvanced capitalist society to being second only tothe US in economic inequality. Income and wealthgaps were mitigated somewhat by taxes and transfer

payments, but,

as could be expected, political pressures have beenmounting to cut taxes and reduce transfer payments.

Since 1985, all Israeli governments have pursuedaggressive neoliberal economic policies of

privatization, deregulation, tax cuts and contractionof social services. But of the two major political

parties it was Labor which was perceived as the truechampion of these policies, because it combinedneoliberal economics with the peace process and withmany other measures of social, political and culturalliberalization. Likud (and Shas), on the other hand,while no less liberal in economic terms, have been

anti-liberal in politicaland cultural terms, and were thus able to capitalizenot only on the opposition to the peace process per se, but also on the economic and cultural frustrationsgenerated by

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the broader process of liberalization.

When the Oslo process collapsed in 2000, Likud,

whose number of Knesset seats had shrunk to only 19in 1999, was there to pick up the pieces. With

Netanyahu getting

cold feet at the last moment, Sharon became leader of Likud and viciously attacked

Barak for his handling of the second intifada. Barak,in turn, was blaming Arafat for rejecting the"generous offer" supposedly made to him at CampDavid and choosing an armed struggle instead. ButArafat was not running in those elections, and facedwith

the political bankruptcy of Labor and rapidlydeteriorating personal security, the

Jewish electorate opted for Sharon's promise to "letthe IDF win." Sharon's decisive victory wasguaranteed by the Palestinian boycott.

SHARON'S CALCULUS

With his election as prime minister in February 2001,Sharon's tactical brilliance came fully into play.Capitalizing on the opportunism of a number of keyLabor politicians,

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first and foremost the Nobel Peace Laureate, ShimonPeres, he proceeded to form a government of nationalunity, thus ensuring that there would be no effective

opposition

to his policies in the Knesset. With liberal publicopinion shattered by the myth of the "generous offer"and by the suicide bombing attacks, Sharon had thefield to himself. As luck would have it, after September 11, 2001 the US was transformed from a

restraining influence upon Sharon to a cheerleader for the execution of his old plan -- the reoccupation of the West Bank and Gaza, the destruction of thePalestinian Authority

and the annihilation of the Oslo process.

By summer 2002, Sharon had largely accomplishedthese goals, and the government of national unity

became a burden upon him, as he began thinkingabout bolstering his support on the right in theapproaching Likud primaries. Ben-Eliezer wasconsumed with a similar calculus regarding the Labor

primaries, and the issue of the 2003 state budget, the

most draconian anti-social budget ever proposed inIsrael, was a convenient occasion for both of them togo their separate ways. Typically, it was Sharon'scalculation that paid off and Ben-Eliezer's that

backfired. Following the breakup of the national

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unity government, Sharon called for almostimmediate elections, depriving both Ben-Eliezer and

Netanyahu of the opportunity to prepare themselves

for their respective primaries.

TERRITORY VS. PEACE

Curiously, the upcoming general elections will be thefirst in Israel's history clearly to be fought over theissue of territory versus peace. Mitzna's candidacy is

promoted by big Israeli capital, which has beensustaining serious losses due to the economicdevastation caused by the combination of a globalcrisis and the flight of every form of foreign (andsome domestic) capital, including tourism, because of the renewed conflict. Mitzna won the Labor

primaries by going against the conventional wisdom

and clearly articulating his dovish positions, and heseems determined to stay this course for the durationof the electoral campaign. Sharon is hiding behind hisfaint support for a "Palestinian state" and hiswillingness to make "painful concessions" for peace,

but everybody realizes that reelecting Sharon

promises only more of the same. Paradoxically,Sharon's utter failure to enhance the security of Israel,and of individual Israelis at home and abroad, mayactually help his electoral effort.

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Optimistic commentators have pointed to the fact thatin both major parties, and even in the ultra-nationalist

National Religious Party, the more moderate

candidates, or at least those professing to be such,won the internal contests. This, they say, indicatesthat public opinion is gradually moving to the left.This observation may be correct in a very generalsense, as desperation is spreading throughout Israelisociety. But in the very short time between now and

January 28 this shift of sentiment is not likely tomake a difference. The only question now is whether Mitzna will have the staying power to remain in theKnesset as head of the opposition, so that at leastSharon will have to face a loud, coherent, criticalvoice as he goes on with his plans to completelysubdue the Palestinians.

JERUSALEM, Aug 3 (Reuters) - Israel's central bank, under pressure to keep the shekel fromstrengthening further and hurting an already battered export sector, said on Monday it would expandits intervention in the foreign exchange market.

'From now on, the Bank of Israel will act in the foreign exchange market in the event of unusualmovements in the exchange rate which are inconsistent with underlying economic conditions, or whenconditions in the foreign exchange market are disorderly,' it said in a brief statement.

The Bank of Israel added it would continue to buy $100 million a day of foreign currency , a programme itbegan 16 months ago when the dollar was in freefall versus the shekel.

The shekel weakened sharply on the news to 3.825 per dollar from its official rate of 3.743, set aboutan hour before the announcement. The official rate was the strongest level since Dec. 19, 2008.

The Israeli currency, which gained 1.2 percent on Monday, had

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appreciated by about 12 percent since reaching a low of 4.25 per dollar in late

April.

As the shekel continued to rise, exporters have appealed to politicians and Bank of Israel Governor

Stanley Fischer to act to stem its advance.

Exports, which account for nearly half of Israel's economic activity, slumped an annualised 29 percent

in the first quarter under pressure from the global economic crisis.

The economy contracted by an annualised 3.7 percent the first three months of the year. The Bank of

Israel predicts a moderation in the second half of 2009.

(Reporting by Steven Scheer; Editing by Ruth Pitchford) Keywords: ISRAEL FOREX/CENBANK

([email protected]; +972 2 632 2210; Reuters Messaging:

[email protected])

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly

prohibited without the prior written consent of Thomson Reuters.

PAST ISRAEL POLITICS

I s rae l i ana lys t s be l ieve I ran ian p r ime min is te r , Ahmadine jad has

worked to undermine the peace p rocess wi th a rms supp l ies and a id to

Hezbol lah in Sou th Lebanon and Hamas in Gaza and i s deve lop ing

nuc lea r weapons , poss ib ly fo r use aga ins t I s rae l . I r an a l so

encourages Holocaus t den ia l . The I s rae l i a rmy proved unab le to

p reven t Hezbo l lah f rom she l l ing the nor th o f I s rae l in 2006 . The

co l lapse o f an unof f ic ia l cease - f i re be tween I s rae l and Gaza and

resumpt ion o f she l l ing o f sou thern I s rae l i towns f rom Gaza , I s rae l i

fo rces mounted a th ree -week campaign in Gaza lead ing to

widespread in te rna t iona l p ro tes t s

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PRESENT ISRAEL POLITICS

In the 2009 leg i s la t ive e lec t ion the r igh t -wing camp won a major i ty

of sea t s and Pres iden t Sh imon Peres ca l led on Netanyahu to fo rm the

government . There i s a b road in te rna t iona l consensus tha t the

ac t ions o f the na t ions invo lved in the Arab- I s rae l i conf l i c t v io la te

p roh ib i t ions con ta ined in in te rna t iona l l aw. However , th i s l ega l i ty i s

d i spu ted by some of the na t ions invo lved . Both the bas i s fo r

in te rna t iona l l aw and d i sagreement over i t s app l icab i l i ty in the case

of the Arab- I s rae l i Conf l ic t i s d i scussed be low. The Uni ted Nat ions

Genera l Assembly has vo ted on a reso lu t ion per ta in ing to i s sues o f in te rna t iona l l aw as app l ied to the conf l i c t every year s ince

1974 .The mos t r ecen t vo te was he ld on January 22 , 2009 . The

reso lu t ion en t i t l ed "Peacefu l se t t l ement o f the ques t ion o f Pa les t ine"

was adop ted by a recorded vo te o f 164 in favor to 7 aga ins t wi th 3

abs ten t ions .

ISRAEL AND THE WARS

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I s rae l has had wars wi th few coun t r ies in the pas t . L ike the Arabs

and few ne ighbour ing coun t r ies . Few of them are exp la ined in de ta i l

below.

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• Israe l ' s Lebanon War ( R E F E R A N N E X I I I )

The 2006 Lebanon War was a 34-day mi l i t a ry conf l i c t in Lebanon

and nor the rn I s rae l . The p r inc ipa l pa r t i e s were Hezbo l lah

parami l i t a ry fo rces and the I s rae l i mi l i t a ry . The conf l i c t was

p rec ip i ta ted by a c ross -border ra id by Hezbol lah dur ing which they

k idnapped and k i l l ed I s rae l i so ld ie r s . In a speech in Ju ly 2008 ,

Hezbol lah leader Hassan Nasra l lah acknowledged tha t he had

ordered the k idnapp ing o f I s rae l i so ld ie r s in o rder to f ree p r i soners

he ld in I s rae l i j a i l s . The conf l i c t began on Ju ly 12 , 2006 when

Hezbol lah mi l i t an t s f i r ed rocke t s a t I s rae l i border towns as a

d ivers ion fo r an an t i - t ank miss i l e a t t ack on two a rmored Humvees pa t ro l l ing the I s rae l i s ide o f the border fence , k i l l ing th ree , in ju r ing

two, and se iz ing two I s rae l i so ld ie r s .

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• Hezbol lah makes i t tough for I srae l

Confron t ing one o f the wor ld ' s s t ronges t a rmies , Hezbo l lah f igh te r s

a re s t i l l ba t t l ing I s rae l ' s t anks and ra in ing rocke t s over the border ,

denying I s rae l i hope o f a swi f t v ic to ry . I s rae l , wary o f ge t t ingsucked in to a new occupa t ion o f sou th Lebanon on ly s ix years a f te r

pu l l ing ou t under Hezbo l lah f i r e , has dec ided aga ins t a fu l l - sca le

invas ion . I t s r e luc tance to sweep in to Lebanon i s a back-handed

compl iment to the p rowess o f the Sh i i t e f igh te r s backed by I ran and

Syr ia . I s rae l , wary o f ge t t ing sucked in to a new occupa t ion o f sou th

Lebanon on ly s ix years a f te r pu l l ing ou t under Hezbo l lah f i r e , has

dec ided aga ins t a fu l l - sca le invas ion . I t s r e luc tance to sweep in to

Lebanon i s a back-handed compl iment to the p rowess o f the Sh i i t e

f igh te r s backed by I ran and Syr ia .

Hamas Dominates Par l iamentary Elec t ions

I s rae l i -Pa les t in ian re la t ions were th rown in to fu r the r tu rmoi l when

the mi l i t an t Hamas Par ty won an unexpec ted lands l ide v ic to ry in the

January Pa les t in ian par l i amenta ry e lec t ions . Al though Hamas had

been in a cease - f i re wi th I s rae l fo r more than a ye ar the pa r ty

con t inued to ca l l fo r I s rae l ' s des t ruc t ion and re fused to renounce

v io lence . In Apr i l 2006 , Hamas f i red rocke t s in to I s rae l i t e r r i to ry ,

e f fec t ive ly end ing the cease - f i re be tween them. I s rae l l aunched a i r

s t r ikes and sen t g round t roops in to Gaza , des t roy ing i t s on ly power

p lan t and th ree b r idges . F igh t ing con t inued over the summer , wi th

Hamas f i r ing rocke t s in to I s rae l , and I s rae l i t roops reoccupying

Gaza .

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• Violence F lares in Gaza

The I s rae l -Pa les t ine conf l i c t has been an ongo ing one . Though the

s ta te o f I s rae l was fo rmed in 1948 the re was a d i spu te be tween the

Zion is t p ioneers and the Arab popu la t ion l iv ing in Pa les t ine . Af te r

years o f a lmos t da i ly exchanges o f rocke t f i r e be tween I s rae l i s and

Pa les t in ians in the Gaza S t r ip , I s rae l and Hamas , the mi l i t an t g roup

tha t con t ro l s Gaza , s igned an Egypt ian-brokered cease - f i re . Whi le

Pa les t in ian and I s rae l i o f f ic ia l s con t inued the i r d ia logue th roughout

2008 , a f ina l peace dea l r emained ou t o f r each amid the g rowing r i f t

be tween Fa tah , which con t ro l s the Wes t Bank and Hamas . Days a f te r

the cease - f i re be tween I s rae l and Hamas exp i red , Hamas began

launch ing rocke t a t t acks in to I s rae l , which re ta l i a ted wi th a i r s t r ikes

tha t k i l l ed abou t 300 peop le . I s rae l t a rge ted Hamas bases , t r a in ing

camps , and miss i l e s to rage fac i l i t i e s . Egypt sea led i t s border wi th

Gaza , anger ing Pa les t in ians who were a t t empt ing to f l ee the a t t acks

and seek ing medica l a t t en t ion . Af te r over a week o f in tense

a i r s t r ikes , I s rae l i t roops c rossed the border in to Gaza , l aunch ing a

ground war aga ins t Hamas . I s rae l i a i rc ra f t con t inued to a t t ack suspec ted Hamas f igh te r s , weapons s tockp i les , rocke t - f i r ing

pos i t ions , and smuggl ing tunne ls .

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• I S RAEL- THE ONLY NON- MUS LI M COUNTRY S URV I V ED I N

THE MI DDLE EAS T

The des i re o f a d i spersed peop le fo r a homeland canno t he lp bu t

en l i s t the sympathy even o f those wi th no Jewish roo ts , nor can any

sens i t ive man or woman fa i l to be moved by the coun t less t a les o f

va lo r and se l f - sac r i f i ce in the years bo th p reced ing and fo l lowing

the c rea t ion o f I s rae l . Many of Amer ican c i t i zens have dona ted

the i r pe rsona l sav ings on a sca le o f generos i ty wi thou t p receden t in

h i s to ry . The ques t ion i s no longer whe ther the Uni ted S ta tes shou ld

con t r ibu te to assur ing I s rae l ' s su rv iva l and p rosper i ty . To sugges t

tha t Amer ica shou ld t ake a s t ronger and more asse r t ive l ine in the

search fo r Midd le Eas t peace i s to r i sk be ing a t t acked as a se rvan t

e i the r o f Arab in te res t s o r o f the o i l companies , o r be ing denounced

as an t i - I s rae l , o r , by a ca re less confus ion o f l anguage , even

condemned as an t i -Semi t ic .

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HAMAS

In January , 2006 , Hamas - an I s lamis t pa r ty wi th a mi l i t a ry wing

b randed as a t e r ro r i s t g roup by the Wes t and won one o f t he f rees tand fa i res t e lec t ions ever conduc ted in the Midd le Eas t . Hamas

became the l ega l ly and du ly chosen represen ta t ive o f the Pa les t in ian

peop le , an inescapab le p layer in the I s rae l i -Pa les t in ian conf l i c t .

Desp i te s imi la r p rev ious p ronouncements ; the Uni ted S ta tes and

Is rae l have avo ided fo rmula t ing a rea l i s t i c po l icy towards Hamas ,

based p r imar i ly on th ree non-nego t iab le demands : tha t Hamas

recogn ize I s rae l , r enounce v io lence , and accep t p rev ious agreements

be tween I s rae l and the Pa les t in ian Author i ty . The Uni ted S ta tes

has ins i s ted tha t i t w i l l no t dea l wi th Hamas un t i l a l l th ree a re fu l ly

accep ted . Hamas canno t be unders tood wi thou t unders tand ing the

shar ia background o f many of i t s po l ic ies . I s rae l ' s e s tab l i shment i s

i l l eg i t imate and un jus t , and i t s r ecogn i t ion by Mus l ims i s fo rb idden .

Hamas main ta ins tha t accep t ing I s rae l ' s l eg i t imacy necessa r i ly

renounces the Pa les t in ian nar ra t ive . Hamas has repea ted ly o f fe red to

end i t s v io len t r es i s tance aga ins t I s rae l by means o f va r ious shar ia -

based mechan isms , such as a hudna ( t ime- l imi ted t ruce) o r a

t ahad i yya (cease - f i re ) . I t has a l so advoca ted the p r inc ip le o f

"Pa les t in ian leg i t imacy ," whereby i t would accep t as b ind ing the

dec i s ion o f the Pa les t in ian peop le to accep t peace wi th I s rae l - even

i f Hamas , a s a Mus l im re l ig ious o rgan iza t ion , cou ld no t r econc i le

tha t ou tcome wi th shar ia and p rese rve i t s Mus l im be l ie f s .

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ISRAEL AFTER HEROISM

The Jewish s ta te tu rned 50 amid a mid l i fe c r i s i s . Wi th the ep ic

drama of I s rae l ' s found ing beh ind them, I s rae l i s conf ron t d i sp i r i t ingex is ten t ia l ques t ions . I s rae l i po l i t i c s , a lways fe roc ious , a re ree l ing

f rom the assass ina t ion o f Yi tzhak Rab in . The peace p rocess , though

f lagg ing , i s s t i l l push ing I s rae l i s c lose r to a reckon ing wi th the

Pa les t in ians , the i r o r ig ina l r iva l s fo r the l and . Amer ican iza t ion i s

g iv ing a coun t ry bu i l t by aus te re p ioneers an iden t i ty c r i s i s .

Tens ions be tween re l ig ious and secu la r a re inc reas ing ly b i t t e r , and

even the a rmy no longer un i tes I s rae l i s the way i t used to . As the

myths fade , I s rae l i s dec id ing whe ther a Jewish s ta te can ever t ru ly

be normal .

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FOREIGN POLICY

Given I s rae l ' s h igh re l i ance on economic and s t ra teg ic mi l i t a ry

suppor t f rom the Uni ted S ta tes ( I s rae l i s the number one rec ip ien t o f U .S . fo re ign a id , and loans f rom the U.S . equa l near ly ha l f o f the

na t ion ' s ex te rna l deb t ) , Ar ie l Sharon canno t ignore the wishes o f h i s

coun t ry ' s ch ie f Wes te rn a l ly in regard to the c r i s i s wi th the

Pa les t in ians . And as the conf l i c t con t inues , the pe rcep t ion o f the

res t o f the wor ld may wel l become less and less sympathe t ic i f

Sharon ' s so lu t ions seem more and more mi l i t a r i s t i c . S ince the a l -

Aqsa in t i fada b roke ou t in Sep tember 2000 , and Sharon came to

power in March 2001 , I s rae l ' s po l icy toward the Pa les t in ians has

become more res t r i c t ive .

In sp r ing 2002 , I s rae l l aunched aga ins t the Pa les t in ians i t s l a rges t

mi l i t a ry o f fens ive in 20 years , s ince the invas ion o f Lebanon . As

su ic ide bombings aga ins t I s rae l i t a rge t s inc reased in 2002–03 ,

Sharon p res ided over a s ta te in which I s rae l i so ld ie r s opera ted

f ree ly in the Wes t Bank and Gaza , I s rae l i se t t l ements inc reased , andIs rae l i b lockades o f Pa les t in ian c i t i e s were t igh tened . Sharon has

demanded Arafa t be rep laced , and the U.S . has ind ica ted i t would

welcome a change in Pa les t in ian leadersh ip .

The Bush Admin is t ra t ion in 2002 pu t fo rward a p lan fo r reso lu t ion

of the I s rae l i -Pa les t in ian c r i s i s dubbed a " road map ," tha t inc ludes

p lans fo r a Pa les t in ian s ta te , a p roposa l to which Sharon has

re luc tan t ly agreed . The p lan inc ludes demands tha t I s rae l d i smant le

24



ISRAEL

se t t l ements bu i l t s ince March 2001 and o ther concess ions by I s rae l ,

to which Sharon has no t agreed . The ru l ing coa l i t ion Sharon pu t

toge ther in February 2003 inc luded two par t i e s tha t oppose any

Pa les t in ian s ta te and tha t s t aunch ly suppor t the se t t l e r movement .Wi th the admin is t ra t ion o f US pres iden t George W. Bush focused on

war wi th I raq in March 2003 , the " road map" has l angu ished . The

fu tu re o f the Midd le Eas t may reach a dec id ing po in t , however , i f

war changes the po l i t i ca l conf igura t ion o f the reg ion , and Sharon ' s

leadersh ip wi l l be t e s ted .

25



ISRAEL

GEO-POL ITICAL AFFAIRS ( R E F E R A N N E X I V )

Will the happenings in The Middle Eastern regions

lead to a World War III Scenario?

In 2006 , when I s rae l a t t acked Lebanon , the war was p resen ted to

in te rna t iona l pub l ic op in ion as a conf l i c t be tween I s rae l and

Hezbol lah . In essence the 2006 war was an I s rae l i a t t ack on a l l o f

Lebanon . The Be i ru t government fa i l ed to t ake a s tance , dec la red i t s

“neu t ra l i ty” and Lebanon’s mi l i t a ry fo rces were ins t ruc ted no t to

in te rvene aga ins t the I s rae l i invaders . The reason fo r th i s was tha t

the po l i t i ca l pa r t i e s o f the Har i r i - l ed March 14 Al l i ance tha t

domina ted the Lebanese government were expec t ing the war to end

quick ly and fo r Hezbo l lah ( the i r po l i t i ca l r iva l ) to be de fea ted , and

even tua l ly exc luded f rom p lay ing a mean ingfu l ro le on the Lebanese

domes t ic po l i t i ca l scene . Exac t ly the oppos i te has occur red s ince

2 0 0 6 .

Moreover , had the Lebanese government dec la red war on I s rae l , in

response to I s rae l i aggress ion , Syr ia would have been ob l iga tedth rough a Lebanese-Syr ian b i la te ra l t r ea ty , s igned in 1991 , to

in te rvene in suppor t o f Lebanon .

In the case o f a fu tu re I s rae l i war aga ins t Lebanon , the s t ruc tu re o f

mi l i t a ry a l l i ances i s c ruc ia l . Syr ia cou ld indeed in te rvene on the

s ide o f Lebanon . I f Syr ia en te r s in to the conf l i c t , Damascus cou ld

seek the suppor t o f Tehran in the con tex t o f a b i l a te ra l mi l i t a ry

coopera t ion agreement wi th I ran . I f I r an were to en te r on the s ide o f

Lebanon and Syr ia in a de fens ive war aga ins t I s rae l , the U.S . and

NATO would a l so in te r vene lead ing us i n to a b roader war .

26



ISRAEL

Both I ran and Syr ia have mi l i t a ry coopera t ion agreements wi th

Russ ia . I r an a l so has b i la te ra l mi l i t a ry coopera t ion agreements wi th

China . I ran i s a l so an observer member o f the Shangha i Coopera t ion

Organ iza t ion (SCO) . I ran’s a l l i e s inc lud ing Russ ia , Ch ina , the

member s ta tes o f the Col lec t ive Secur i ty Trea ty Organ iza t ion

(CSTO) , and the Shangha i Coopera t ion Organ iza t ion (SCO) cou ld a l l

be d rawn in to the b roader conf l i c t .

MACRO-ECONOMIC CONDITIONS

(Refer to Annexure 2 )

A recen t In te rna t iona l Mone ta ry Fund repor t s t a ted tha t

“macroeconomic cond i t ions in the Wes t Bank have improved”

la rge ly because “ I s rae l i r e s t r i c t ions on in te rna l t r ade and the

passage o f peop le have been re laxed s ign i f ican t ly .” What ’ s more ,

says the IMF, “con t inua t ion o f the re laxa t ion o f res t r i c t ions cou ld

resu l t in rea l GDP growth o f 7% for 2009 as a whole .” Tha t ’ s a

gross domes t ic p roduc t g rowth ra te Amer icans would leap a t , so

what ’ s th i s d i spu te abou t?

I t i s , once aga in , abou t the subord ina t ion o f rea l i ty to p re -ex i s t ing

theor ies . In th i s case , the theory i s tha t every p rob lem in the Midd le

Eas t i s r e la ted to the I s rae l i -Pa les t in ian d i spu te . The admin is t ra t ion

takes the v iew tha t “mere ly” improv ing l i fe fo r Pa les t in ians and

doing the ha rd work needed to p repare them for even tua l

independence i sn ’ t enough . Nor i s i t daun ted by the minor de ta i l tha t

ha l f o f the even tua l Pa les t ine i s con t ro l led by the t e r ro r i s t g roup

Hamas .

27



ISRAEL

Ins tead , in keep ing wi th i t s “yes we can” approach and i t s boundless

ambi t ions , i t has dec ided to go no t on ly fo r a f ina l peace agreement

be tween I s rae l and the Pa les t in ians , bu t a l so fo r comprehens ive

peace in the reg ion . Mr . Mi tche l l exp la ined tha t th i s inc ludes I s rae land Pa les t ine , I s rae l and Syr ia , I s rae l and Lebanon and normal

re la t ions wi th a l l coun t r ies in the reg ion . The admin is t ra t ion

(pocke t ing the economic p rogress I s rae l i s fos te r ing in the Wes t

Bank) dec ided tha t I s rae l ’ s “s tep” would be to impose a comple te

se t t l ement f reeze , which would be p rof fe red to the Arabs to e l i c i t

“s teps” f rom them.

But I s rae l i s no t ice tha t a l ready the Saud is have re fused to t ake any

“s teps” toward I s rae l , and o ther Arab s ta tes a re apparen t ly o f fe r ing

weak tea : a qu ie t mee t ing here , over f l igh t r igh t s the re , bu t no th ing

approach ing normal re la t ions .

Mrs . C l in ton recen t ly decr ied “ r ig id ideo log ies and o ld fo rmulas ,”

bu t the t ens ion wi th I s rae l shows the admin is t ra t ion i s—up to now—

fo l lowing the o ld sc r ip t tha t a t t r ibu tes every p rob lem in the reg ion

to the I s rae l i -Pa les t in ian conf l i c t , whi le a l l who l ive the re can see

tha t deve lopments in I ran a re in fac t the l inchp in o f the reg ion’s

fu tu re . The Obama admin is t ra t ion’s “o ld fo rmulas” have p roduced

the cur ren t t ens ions wi th I s rae l . They wi l l d imin ish on ly i f the

admin is t ra t ion adop ts a more rea l i s t i c v iew of wha t p rogress i s

poss ib le , and wha t dangers lu rk , in the Midd le Eas t .

28



ISRAEL

ISRAEL’S DEFENCE ( R E F E R A N N E X I )

I s rae l p roduces a wide range o f p roduc ts f rom ammuni t ion , smal l

a rms and a r t i l l e ry p ieces to soph is t i ca ted e lec t ron ic sys tems and the

wor ld ' s mos t advanced tank . Hav ing to f igh t f ive major wars in i t s

f i r s t four decades , I s rae l bu i l t a comprehens ive s tand ing a rmy – the

Is rae l Defense Forces ( IDF) - and fu rn i shed i t w i th an a r sena l o f

h igh ly advanced mi l i t a ry ha rdware . The government , which owns

th ree major de fense f i rms , a l so encouraged the fo rmat ion o f p r iva te

companies to equ ip the IDF. The deve lopment o f a soph is t i ca ted

defense indus t ry inev i tab ly l ed to expor t s , which today account fo r amajor i ty o f i t s r evenues and a l lows the coun t ry ' s de fense indus t ry to

compete aga ins t some of the l a rges t companies in the wor ld fo r

fo re ign con t rac t s , in add i t ion to p roduc ing many of the a rms needed

for I s rae l ' s own defense . Many of the mos t innova t ive p roduc ts

deve loped by I s rae l ' s c iv i l i an h igh tech indus t ry , e spec ia l ly in

the f ie ld o f t e lecommunica t ions , t r ace the i r o r ig ins to mi l i t a ry

techno logy . The more cos t ly a i rc ra f t and o ther advanced weapons

were p rocured f rom fore ign supp l ie r s , p r inc ipa l ly France . There a re

approx imate ly 150 defense f i rms in I s rae l , w i th combined revenues

of an es t imated $3 .5 b i l l ion . I s rae l ' s de fense expor t s a re coord ina ted

and regu la ted th rough SIBAT - the Fore ign Defense Ass i s tance and

Defense Expor t Organ iza t ion - which i s run by the Min is t ry o f

Defense . S IBAT's t a sks inc lude l i cens ing a l l de fense expor t s a s we l l

as marke t ing p roduc ts deve loped fo r the IDF, f rom e lec t ron ic

componen ts to miss i l e boa t s and tanks . Each year , S IBAT pub l i shes

a de fense sa les d i rec to ry , an au thor i t a t ive gu ide to wha t the indus t ry

has to o f fe r . Desp i te the i r f a r - reach ing c l i en t base , even the b igges t

loca l f i rms a re re la t ive ly smal l p layers in the g loba l de fense marke t .

29



ISRAEL

With inc reas ing compet i t ion f rom the major wor ld ae rospace

p layers , I s rae l i companies t end to spec ia l i ze in n iche marke t s , o r

have sought to combine fo rces th rough mergers o r jo in t marke t ing

ef fo r t s . In add i t ion , dec l in ing g loba l de fense spend ing has p rov idedthem wi th new oppor tun i t i e s as fo re ign governments seek to upgrade

the i r ex i s t ing a r sena l r a the r than buy new equ ipment . In add i t ion to

I s rae l and the US, IMI has d i s t r ibu to rs in a number o f coun t r ies ,

inc lud ing Norway, Be lg ium, the Ph i l ipp ines and Greece . Some 60%

of i t s r evenues , wor th approx imate ly $550 mi l l ion , come f rom

expor t s . A complex o f companies which spec ia l i ze in deve lopment

and coord ina t ion o f de fense bus iness fo r I s rae l i f i rms abroad , and

for in te rna t iona l f i rms in I s rae l ; RSL Elec t ron ics , which p roduces

bo th a i rborne e lec t ron ics sys tems fo r a i rp lanes and he l icop te r s and

muzz le -ve loc i ty radar fo r f i e ld a r t i l l e ry .

30



ISRAEL

INDIA AND ISRAEL

• Israe l now India ' s larges t de fence suppl ier

Despi te the Lef t ve to , which had s ta l l ed c ruc ia l po l icy-dec i s ions in

the coun t ry in the l a s t four -and-a -ha l f yea rs be fore the i r r e la t ions

wi th the Congress tu rned b i t t e r , de fence t i e s be tween Ind ia and

Is rae l have g rown s ign i f ican t ly . So much so , tha t Te l Aviv has now

over taken Moscow as Ind ia ’ s l a rges t de fence supp l ie r . A po in te r to

the s t reng then ing bonds be tween the two s ides , accord ing to I s rae l i

media repor t s , i s the i r coun t ry’s dec i s ion to s ign defence dea l s

wor th $9 b i l l ion wi th New Delh i dur ing the pas t decade . There i s

c lose co-opera t ion be tween the two s ides and Ind ians respec t I s rae l i

sys tems and our exper ience in f igh t ing te r ro r . The inc reas ing

bonhomie be tween the s ides has seen t i e s wi th Ind ia ’ s t r ad i t ion , and

re l iab le pa r tne r , Russ ia , t ak ing a back-sea t . Moscow had averaged

sa les o f de fence equ ipment wor th $875 mi l l ion annua l ly to Ind ia fo r

the pas t 40 years . The deve lopment i s ce r ta in to be enhance Lef t ’ s

d i scomfor t wi th the Congress - led UPA government a t the Cen t re , a s

the CPM and i t s a l l i ance pa r tne rs have t rad i t iona l ly v iewed defence

t ies wi th I s rae l wi th susp ic ion . In the wake o f recen t Mumbai t e r ro r

a t t acks , Ind ia a l so purchased f rom Is rae l the ae ros ta t r adar sys tem to

he lp de fend the coun t ry’s coas t l ine in a dea l va lued a t $600 mi l l ion ,

the da i ly sa id . The radars wi l l be dep loyed in s t ra teg ic po in t s to

p rov ide advance warn ing aga ins t incoming enemy a i rc ra f t and

miss i l e s , the repor t sa id . The EL/M-2083 Aeros ta t r adars a re a

31



ISRAEL

s imple r ve rs ion o f the Green P ine radar , made by I s rae l Aerospace

Indus t r i es , and used by the Ar row miss i l e de fence sys tem. I s rae l and

Ind ia have a l so agreed upon the jo in t deve lopment o f medium-range

sur face- to -a i r miss i l e s (MRSAM) fo r the Ai r Force . S ign i f ican t ly ,Ind ia i s a l so expec ted to rece ive the f i r s t o f th ree new Pha lcon

Airborne Warn ing and Cont ro l Sys tems (AWACS) , pa r t o f a $1 .1

b i l l ion dea l s igned be tween the two coun t r ies , by March . The two

s ides a re sa id to be in t a lks fo r the poss ib le purchase o f ano ther

th ree AWACS to boos t ae r ia l su rve i l l ance o f Ind ia ’ s coas t l ines . The

Ind ian defence min is t ry has repor ted ly a l so approved a $ 2 .5 b i l l ion

jo in t IAI -Rafae l dea l to deve lop a new and advanced vers ion o f the

Spyder su r face - to -a i r miss i l e sys tem.

India, Israel sign $1.4 bn deal on air defence system

Ind ia has s igned i t s b igges t de fence dea l wi th I s rae l fo r the purchase

of a s ta te -o f - the -a r t a i r de fence sys tem a t a whopping cos t o f $1 .4

b i l l ion . I s rae l Aerospace Indus t r i es ( IAI ) has o f f ic ia l ly

acknowledged tha t the de fence dea l be tween the two coun t r ies was

inked under which I s rae l wi l l deve lop and manufac tu re seaborne and

shore -based sys tems aga ins t miss i l e a t t ack on Ind ia , bus iness da i ly

Globes repor ted . The s ign ing o f the dea l comes as Ind ia i s in

advance s tage o f t e s t ing o f i t s own an t i -miss i l e sh ie ld . The Defence

Research and Deve lopment Organ isa t ion (DRDO) has a l ready

success fu l ly t e s t - f i r ed i t s advanced a i r de fence (AAD) miss i l e . As

per the agreement , IAI has a l so under taken to p rocure mi l i t a ry o r

av ia t ion p roduc ts and se rv ices f rom Ind ia . I t w i l l inves t in de fence

companies in Ind ia up to an amount equa l to 30% of the con t rac t .

Ind ia i s cu r ren t ly I s rae l ’ s l a rges t a rms buyer .

32



ISRAEL

India, Israel in talks on three new Phalcon aircraft

Ind ia and I s rae l a re in advanced s tage o f t a lks over the supp ly o f

th ree new Pha lcon a i rc ra f t in wha t cou ld tu rn ou t to be the b igges t

defence con t rac t in the h i s to ry o f the Jewish s ta te . Ind ian defence

of f ic ia l s a re cur ren t ly ho ld ing in te rna l deba tes on the i s sue and i f

the dea l comes th rough , New Delh i would be pay ing be tween USD

300-400 mi l l ion per a i rc ra f t . Ind ia and I s rae l had in 2004 s igned a

USD 1 .1 b i l l ion dea l over the supp ly o f th ree Pha lcon Ai rborne

Warn ing and Cont ro l Sys tems (AWACS) , bu i l t on Russ ian I lyush in -

76 a i rp lanes . The f i r s t o f the th ree p lanes , which i s cu r ren t ly

undergo ing f l igh t t e s t s in Russ ia , i s schedu led to be supp l ied by

Sep tember 2009 and wi l l be fo l lowed by the o ther two over a pe r iod

of two years . The new dea l would invo lve the same conf igura t ion as

the ea r l i e r ones and inc lude a radar and e lec t ron ic in te l l igence

sys tem des igned and manufac tu red by I s rae l Aerospace Indus t r i es '

subs id ia ry , E l ta Sys tems Group , ins ta l l ed in an I lyush in -76 a i rc ra f t

supp l ied by Russ ia . The Pha lcons wi l l g ive Ind ia a fo rce mul t ip l i e r by acqu i r ing AWACS th a t can de tec t ae r ia l th rea t s and se rve as a

p la t fo rm to d i rec t combat j e t s to t a rge t s . I t i s an a l l -wea ther sys tem

capab le o f logg ing 60 ta rge t s s imul taneous ly and has a range o f up

to 400 km. The I s rae l i de fence min is t ry l a s t yea r announced tha t

New Delh i was i t s s ing le l a rges t impor te r o f de fence equ ipment ,

cons t i tu t ing abou t 50 per cen t o f I s rae l ' s de fence expor t s and abou t

30 per cen t o f Ind ia ' s impor t s .

ISRAEL’S INITIATIVE

33



ISRAEL

I LSI – Biomed Israel 2009

I s rae l i s now a fas t g rowing f ie ld o f innova t ion in b iomedica l ,hea l th ca re and l i fe sc ience indus t r i es . Th is a t t r ac ted over 6000

loca l and in te rna t iona l CEO’s , exper t s , academics , sc ien t i s t s ,

r esea rchers , ven tu re cap i ta l i s t s , and ange l inves to rs . Over 35

count r ies a round the wor ld pa r t i c ipa ted in th i s mee t . B iomed 2009 i s

an essen t ia l oppor tun i ty to l ea rn f rom in te rna t iona l exper t s the

la tes t hea l thcare t r ends , r egu la to ry and re imbursement i s sues , and

therap ies . A vas t va r ie ty o f I s rae l i B ioPharma and Medica l Dev ice

p layers wi l l a l so rece ive expos ure .

Biomed 2009 h igh l ights :

Plenary sess ions and p resen ta t ions by indus t ry l eaders and academia

wor ldwide

The 3 rd In te rna t iona l S tem Cel l Mee t ing

Unique oppor tun i t i e s fo r ne twork ing and lea rn ing

Sa te l l i t e even ts focus ing on c l in ica l s tud ies , aes the t ic medic ine ,

o r thoped ic

One-on-one par tne r ing mee t ings

Exhib i t ion o f the l a tes t medica l innova t ions

Pr ime loca t ion – Te l Aviv , a commerc ia l cap i ta l and tour i s t de l igh t .

Summary

34



ISRAEL

Pales t in ians in the Wes t Bank and Gaza S t r ip l ive in an odd and

oppress ive l imbo . They have no na t ion , no c i t i zensh ip , and no

u l t imate power over the i r own l ives . S ince 1967 , when I s rae l

conquered these a reas ( the f ina l 22 percen t o f manda tory Pa les t ine ) ,Pa les t in ians have been l iv ing under I s rae l i mi l i t a ry occupa t ion .

Whi le in some par t s I s rae l has a l lowed a Pa les t in ian “au tonomous”

en t i ty to t ake on such munic ipa l func t ions as educa t ion , hea l th ca re ,

in f ras t ruc tu re and po l ic ing , I s rae l r e ta ins overa l l power .

Accord ing to in te rna t iona l l aw, an occupying fo rce i s r espons ib le

fo r the p ro tec t ion o f the c iv i l i an popu la t ion l iv ing under i t s con t ro l .

I s rae l , however , ignores th i s r equ i rement , rou t ine ly commit t ing

v io la t ions o f the Geneva Conven t ions , a se t o f p r inc ip les ins t i tu ted

af te r Wor ld War I I to ensure tha t c iv i l i ans would “never aga in”

suf fe r a s they had under Naz i occupa t ion . I s rae l i s one o f the

lead ing v io la to r s o f these conven t ions today .

Hamas has repea ted ly o f fe red to end i t s v io len t r es i s tance aga ins t

I s rae l . I t has a l so advoca ted the p r inc ip le o f "Pa les t in ian

leg i t imacy ," and A f lu r ry o f upcoming mee t ings be tween sen io r U .S .

and I s rae l i o f f ic ia l s sugges t s tha t Wash ing ton i s de te rmined to t ry to

overcome the cur ren t impasse . The aspec t to ponder i s tha t how

Amer icans , in approach ing the p rob lems o f the Midd le Eas t , can bes t

fu l f i l l the i r r espons ib i l i t i e s no t on ly to I s rae l and to themse lves bu t

a l so to peop les a l l over the wor ld whose wel l -be ing cou ld be

se r ious ly endangered by fu r the r conf l i c t .

RECOMMENDATION

35



ISRAEL

I s rae l i s have lea rned the ha rd way tha t r ea l i ty canno t be ignored and

tha t ideo logy o f fe r s no p ro tec t ion f rom danger

I t i s now c lea r tha t the midd le eas t c r i s i s wi l l be deep and

p ro longed and tha t i t w i l l have fa r - reach ing geopol i t i ca l

consequences . The long movement toward peace has s topped , and a

new per iod o f s ta te in te rven t ion , r e regu la t ion , and c reep ing

p ro tec t ion i sm has begun . Such lack o f s t reng th and un i ty in the Wes t

i s un t imely , because the c rash wi l l inc rease geopo l i t i ca l ins tab i l i ty .

To sugges t tha t Amer ica shou ld t ake a s t ronger and more asse r t ive

l ine in the sea rch fo r Midd le Eas t peace i s to r i sk be ing a t t acked asa se rvan t e i the r o f Arab in te res t s o r o f the o i l companies , o r be ing

denounced as an t i - I s rae l , o r , by a ca re less confus ion o f l anguage ,

even condemned as an t i -Semi t ic .

ANNEXURES

36



ISRAEL

( I )

Sources : The Third Temple's Holy Of Holies: Israel's Nuclear Weapons Warner D. Farr, LTC,

U.S. Army, September 1999

I S RAEL’ S ECONOMI C I NDI CATERS

(II )

Criteria 2005 2006 2007 2008

GDP (current prices, B$) 131.2 142 161.8 168

37





ISRAEL

39



ISRAEL

Bibliography:

1. Israel now India's largest defense supplier - 16 Feb 2009, 0528 hrs IST, ETBureau

2. India, Israel sign $1.4 bn deal on air defense system- 27 Mar 20 09 , 1 423hrs IST, PTI , JERUSALEM

3. India, Israel in talks on 3 new Phalcon aircraft-16 Apr 2008 , 1538Hrs , IST , PTI

4. US envoy warns against rearming Lebanon’s Hezbollah, Deutsche Presse-Agentur/German Press Agency (DPA), December 17, 2008.

5. Iran, most powerful country, Islamic Republic News Agency ( IRNA), October 21,2008.

6. Preparing for a possible confrontation with Hizbullah, The Jerusalem Post,December 11, 2008

7. Hezbollah Terrorist Group; War with Israel Imminent”, Al-Manar , December 17,

2008

8. www. Foreign Affairs.com

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