forward.com By DALE FUCHS

In 1986, when Buenos Aires native Isidoro Gravier decided it was time to find a better future for his family, he moved to Madrid, thinking he could settle comfortably into the established Jewish community there. But it was not so easy.

"The people were very friendly and supportive," he recalled, "but the culture felt alien to us, and the attitudes were alien to us."

At the time, Gravier could not have imagined how dramatically the situation would change. Today, using the recipes of his 87-year-old mother-in-law, who is the daughter of Russian immigrants, Gravier operates a catering business specializing in Ashkenazic fare like latkes and blintzes — in Spain, the birthplace of Sephardic Jewry.

Gravier and his family are part of a growing Ashkenazic community in Madrid, a city that now boasts Yiddish-language workshops, book fairs celebrating the works of Sholom Aleichem and, most recently, a Jewish theater club.

Spain — legendary as the country that expelled and killed its Jews in 1492 — may not seem the obvious place for a Ashkenazic Jewish community. But roughly 15% of Spain's 30,000 Jewish residents today are of Central and Eastern European descent, and that percentage is climbing. More than 250 Jewish families — overwhelmingly Ashkenazic — have come to Spain from Argentina in the last six months alone, according to Argentinian rabbi Adrian Herbst. A continuous flow is expected as social and economic conditions worsen in Buenos Aires, which is still home to 180,000 Jews.

"Those who come from Latin America — Argentina, Uruguay and Venezuela — usually don't speak English, so they don't want to go to the States. They don't speak Hebrew so they don't want to go to Israel — and, besides, for them Israel would be like trading one crisis for another," Herbst said. "Where else should they go?"

Though Spain may seem like a reasonable answer, its largely Sephardic and Orthodox community poses unique challenges for many recent immigrants. "Even in the synagogue we felt uncomfortable," said Gravier's wife, Lidia Sigal, looking back on her initial impressions in 1986. She noted that the Sephardic and Orthodox traditions in Madrid were "nothing like what we were accustomed to in Buenos Aires."

"Most of the Jews who just arrived from Argentina are used to a real synagogue for Friday night services, sending their kids to youth groups and Hebrew school and maybe even studying something themselves during the week," Herbst said. "When they get to Spain, they miss that. They don't tend to be very religious, but they enjoy being part of a community. When they realize they don't fit in, some feel like leaving the country. But if we develop an Ashkenazi community, not only will they want to stay, but Spain could become a natural destination for Jews from all over Latin America."

To that end, Herbst traveled to Madrid last month to help its Conservative synagogue, Bet El, deal with the recent influx of Argentine immigrants. The congregation is fast outgrowing the modest apartment, crammed with people sitting in bridge chairs, that serves as makeshift sanctuary and meeting place. Holidays are standing-room only and this past Yom Kippur services had to be moved to a hotel to accommodate the 200 attendees.

In addition to finding a new space for the synagogue, a main priority is hiring a permanent rabbi. Until now, Sabbath, Rosh Hashana and Yom Kippur services have been conducted by a good-natured accountant who once studied at a seminary in Argentina but was never ordained. "He does it as a hobby," Herbst said. "He doesn't have time to offer spiritual guidance during the week; he's busy working."

While the historic community was wiped out some 500 years ago, the modern Jewish presence in Spain goes back more than a century. As early as 1917, more than 1,000 Jews were living in Madrid. They prayed in a rented apartment on Príncipe Street until the Spanish Civil War, when they were forced to go underground. "Some Yom Kippur celebrations ended up in the police station," said Isaac Querub Caro, former president of the officially recognized Jewish Community of Madrid. Scholars are still divided on the extent to which Franco's fascist regime helped Jews during Hitler's time. According to Caro, officials offered them refuge "as long as they were on their way to somewhere else."

The first significant wave of Jewish immigrants arrived in 1956, following Morocco's independence from French and Spanish colonial rule. The official reason, popular in political circles here, is that Jews sought better schools and economic opportunities for their children; the unofficial reason is that they feared repression by the new Arab government. The Six-Day War in 1967 provoked a similar exodus of North African immigrants, Sephardic Jews who spoke Haketia, a version of Ladino that combines Arabic, French and Hebrew with 14th-century Spanish, the language of their ancestors.

When a law guaranteeing religious freedom was finally passed in 1968, the Orthodox Sephardic community in Madrid received permission to build Spain's first new synagogue since the Inquisition, in the heart of the capital on Balmes Street. Spanish King Juan Carlos even made a highly publicized visit there in 1992, acknowledging the grave mistake made by King Ferdinand and Queen Isabella 500 years earlier.

The Conservative Ashkenazic community of Bet El has a long way to go to reach the level of organization achieved by the Sephardim of Balmes Street. But it is on its way. Last October, the organization Masorti-Olami of the World Council of Conservative Synagogues sent two "consultants" to help. Rebecca and Eytan Hammerman have spent the last eight months setting up weekly Hebrew classes, youth groups and, once a month, Saturday morning services, all with an Ashkenazic flavor.

"These are people who came from a huge Jewish community, where you walk down the street and feel the Jewish culture in the air, like in New York," Rebecca Hammerman said, speaking of the Argentine immigrants. "Here that's not the case. They don't have contact with Jews in their daily life. And in Balmes Street, they haven't felt that comfortable. We need to create a place where they belong."

The organizers are counting on ordinary folks like Claudia Filozof to make things change. Filozof, a doctor, left Buenos Aires with her husband, mother and two teenage children less than a year ago. After finding a job, renting an apartment in Madrid and settling the kids in new schools, she was ready for the next step: getting back into step with the rhythms of Jewish life. First Filozof visited the synagogue on Balmes Street, but "didn't feel anything," she said. "It was like going to a Greek ceremony." After a while, she found out about the Conservative services at Bet El's shabby apartment. "It felt like family," she recalled.

Back in Argentina, Filozof's family was not especially observant, and the kids hardly ever went to Friday night services. But here, suddenly swimming in strange waters, the teens don't skip a week. The eldest boy is especially sensitive to anti-Israeli sentiments of his classmates at the public high school and has sought out any Jewish youth activities available. This Passover, the family joined 200 other Argentinian Jews for a mega-Seder at a local restaurant.

"There was dancing and kosher food and lots of little kids running around all over the place," Filozof gushed in her melodious Argentine Spanish. "We all ended up singing 'Halleluyah.'"

Power and Interest News Report (PINR) content@pinr.com May 11, 2003: Drafted by Erich Marquardt on May 11, 2003

Now that the United States has expressed its desire to weaken the United Nations politically and to create a new world order in which the U.S. can become the sole, unrestrained power in the world, it will be important to watch how Europe responds. Prior to the war in Iraq, the European states of France and Germany were unwilling to support a U.S. led invasion. With the weight of the Security Council behind these two states, governments around the world watched to see if the U.S. would defy the United Nations and thus upset the balance of world order. The Bush administration decided to attack Iraq without U.N. support, which sent ominous signals throughout the world that the U.S. would no longer be restrained by the decrees of the U.N.

In this new state of affairs, the U.S. will continue to stand unchallenged on the world stage until another state or group of states attempts to check its power. As of now, no such entity exists, and the members of the Bush administration have taken note of this situation and are thus pushing U.S. interests on the world. Because the U.S. wields an abundance of economic and military power, other powerful states are hesitant to stray too far from U.S. interests. China, for example, has the potential to check U.S. power; however, its growth potential is reliant on good relations with Washington. Because of the Sino-U.S. relationship, it will be France, Germany and Russia that will most likely be able to check U.S. power.

The major power brokers within the European Union -- France and Germany -- are unhappy with the recent changes in world order. Until recently, France was able to influence global relations through its permanent member status in the United Nations Security Council. Now, with the U.S. replacing the U.N. as the formal center of world order, France's power on the world stage has been greatly diminished, if not eradicated altogether. Germany is also unhappy with the United States limiting the power of Europe so it can become a global hegemon. Russia, like France, has a permanent seat on the U.N. Security Council; due to Washington's weakening of the U.N., Russia also lost considerable power in global affairs. For these reasons, France, Germany and Russia took a strong stance against a U.S. attack on Iraq.

But now there are signs that these states are willing to put up even more resistance. On April 29, the leaders of France, Germany, Belgium and Luxembourg agreed to work towards a European Security and Defense Union by the end of 2004. As part of this union, the four member states would combine resources to create a rapid reaction force capable of preventing conflicts and managing military problems anywhere in the world. Furthermore, this force would be commanded by an independent E.U. military command center just outside Brussels. Such a force, as stated by French President Jacques Chirac, is necessary in order to create "balance." Chirac added, "We need a stronger European Union and a strong United States."

Even more groundbreaking is the recent statements by the defense ministers of both France and Russia, in which they announced mutual intensified military cooperation and joint weapons production. Encouraged by Washington's decision to attack Iraq, both Paris and Moscow had increased political and diplomatic cooperation in recent months. Military collaboration between the major power brokers of the European Union and Russia could work to weaken U.S. global power. The advanced states of the European Union, combined with Russia's nuclear capability, could act to counter unrestrained U.S. power. This chain of events would provide the most credible restraint to current U.S. foreign policy aspirations and once again establish a world order that relies on balance, rather than one superpower with unilateral ambitions.

Still there are several potential obstacles to such an alliance. The European Union is far from united; after announcing their plan to build an independent E.U. military command center, the E.U. states of Britain, Spain, Italy and the Netherlands all detached themselves from this proposition. Other European member states have reacted coolly. This lack of cooperation is due to most European member states' unwillingness to distance themselves politically too far from the United States. The massive economic, political and military power the U.S. wields causes most European member states to find their interests best served by the United States, rather than the central powers of the European Union. Until relations with the central powers of the European Union are more appealing than relations with the United States, European member states will continue to attempt to keep good relations with both the central E.U. states and certainly the United States.

Russia finds itself in a similar predicament. Moscow still looks to the United States to help it succeed in the world of globalization and free trade capitalism. Russia has been waiting for the U.S. to lift Cold War-era trade restrictions; moreover, Russia also wants acceptance into the World Trade Organization. Therefore, Russia finds that its national interests lie in good relations with the United States; this political reality has kept Russia from swaying too far away from U.S. interests. Furthermore, as in the case of pro-U.S. European states, Russia does not yet feel that an alliance with central E.U. states such as France and Germany would be more beneficial than an alliance with the United States.

But due to quick developments that often emerge on the global scene, the relations between these states could quickly change. If the U.S. takes further action that threatens European and Russian interests, the U.S. could unwillingly push these former hegemonic states into an alliance that will work to check U.S. power abroad.

The Power and Interest News Report (PINR) is an analysis-based publication that seeks to, as objectively as possible, provide insight into various conflicts, regions and points of interest around the globe. PINR approaches a subject based upon the powers and interests involved, leaving the moral judgments to the reader. PINR seeks to inform rather than persuade. This report may be reproduced, reprinted or broadcast provided that any such reproduction identifies the original source, www.pinr.com. All comments should be directed to content@pinr.com.

The Forgotten Relationship

By Jorge G. Castaneda From Foreign Affairs, May/June 2003 RETHINKING U.S.-LATIN AMERICAN TIES

Free from the strategic and ideological rigidities of the Cold War, Latin America in the mid-1990s looked forward to a more realistic and constructive relationship with the United States. The first Summit of the Americas in 1994, which launched negotiations on the Free Trade Area of the Americas (FTAA), symbolized the renewal of goodwill and cooperation in the region. The summit led to a series of hemisphere-wide meetings at various levels throughout the 1990s that offered a new model for political relations between the United States and Latin America (most notably the Williamsburg and Bariloche defense ministerial meetings). This new diplomacy for the first time presumed to treat all the region's nations (with the exception of Cuba) as equals. The summitry also sent a powerful message throughout the hemisphere by implicitly stating that the success of the entire endeavor depended on the coordinated progress of all nations in the Americas.

A sign of the times was the lessened rhetorical confrontation between most Latin American nations and their powerful northern neighbor. Some unilateral U.S. policies-such as the process of "certifying" countries' cooperation with the U.S. drug war or the Helms-Burton legislation, which placed sanctions on any country that traded with Cuba-faced firm regional opposition. But Latin American countries felt increasingly more at ease when discussing certain issues with Washington that in the past had been highly controversial, such as democracy and human rights promotion or combating corruption. A consensus developed, stronger than at any time in the past half-century, on what constituted a common agenda for hemispheric relations and how to address it.

By the end of the last decade, however, the progress seemed to wind down. And the terrorist attacks in New York and Washington sounded the death knell of what could have become the new Bush administration's more forward-looking, engaged, and enlightened policy toward the rest of the hemisphere. The resulting post-September 11 picture is not pretty from a Latin American point of view, although there is certainly no lack of understanding or even support throughout the Americas for the U.S. fight against terrorism. But the United States has replaced its previous, more visionary approach to relations in the western hemisphere with a total focus on security matters. This disengagement is dangerous because it undermines the progress made in recent years on economic reform and democratization. Rarely in the history of U.S.-Latin American relations have both the challenges and the opportunities for the United States been so great. It is certainly not a time for indifference.

ROLLBACK

The events of September 11 preempted the Bush administration's initial plans to employ a more open approach within the western hemisphere. Indeed, security and counterterrorism concerns quickly, and perhaps understandably at first, overshadowed any other issue. For example, one immediate casualty of the emphasis on homeland security was the initiative to create a comprehensive and long-term solution to the problem of migration flows from Mexico to the United States. Other setbacks swiftly followed. By early 2002, the Bush administration had broadened the Plan Colombia antidrug initiative to include direct anti-insurgency efforts. This decision was motivated both by a sense that any area plagued by armed instability was a potential host for terrorism and by the collapse of the Colombian peace process. The international antiterrorist campaign further led to a disengagement from the economic troubles brewing in Argentina, Uruguay, and Brazil. In particular, the U.S. Treasury Department's inaction turned the tragedy of Argentina's financial collapse into a painful lesson in international laissez-faire. In Venezuela, moreover, social polarization, political instability, and growing anti-American sentiment were largely ignored at the policymaking level, even if intellectual concern in Washington among officials and think tanks was acute and increasing.

But perhaps more than these country-specific crises, the main reason to worry about the redirection of U.S. attention lay in the broader patterns emerging in Latin America. First and foremost was the lack of tangible results from years of economic reform. By the turn of the new century, it had become quite clear that the structural changes implemented in virtually every Latin American economy over the past two decades had not brought about the desired results. Growth rates remained far below expectations or even previous achievements. Even Chile, for many years the only showcase of successful economic reform, had run out of steam, averaging barely three percent growth between 1999 and 2002. This situation not only discredited the reforms themselves but invited the advent of alternatives, some of which inevitably are "anti-neoliberal."

The disappointing results, moreover, brought into question the other great regional achievement of recent times: the broad and deep consolidation of democratic rule throughout the hemisphere. Those who became familiar at the same time with open economies and open societies channeled, perhaps unavoidably, their frustrations about weak economic performance into anger at the political process. People increasingly blamed democracy for economic stagnation, or at least for failing to deliver economic growth. Consequently, governance began to falter: democratic regimes with nothing to show for their efforts found themselves increasingly impotent and isolated, blamed for everything from the impact of unpredictable weather to international economic trends to crime and corruption. The dwindling enthusiasm for economic reform and representative democracy was revealed in poll after poll and in one election after another. And, as a result, the region today faces an increasingly unpredictable future.

U.S.-Latin American relations are also mired in uncertainty. In the post-September 11 world, Latin America finds itself consigned to the periphery: it is not a global power center, but nor are its difficulties so immense as to warrant immediate U.S. concern. In many ways, the region, at least in terms of U.S. attention, has become once again an Atlantis, a lost continent. Perplexing bureaucratic conundrums-for instance, the lengthy absence of a permanent U.S. assistant secretary of state for western hemisphere affairs-and new agency priorities have left many Latin American capitals in a diplomatic vacuum. This situation has developed despite Secretary of State Colin Powell's and National Security Adviser Condoleezza Rice's excellent and perhaps unprecedented personal relationships with many of their colleagues in the region. On top of it all, Latin American leaders and diplomats have a nagging feeling that whenever they point out the obvious lack of U.S. attention to regional problems or bilateral agendas, their views are received in Washington with impatience and even irritation.

Indeed, as the post-September 11 world grows increasingly complex, the western hemisphere still reveals a relatively simple pattern: the reassertion of U.S. hegemony. The central question thus becomes whether the United States is willing to work with Latin America to achieve a durable framework for regional relations and how it would accomplish this. The United States can be a positive influence in the hemisphere and it can, more than ever, contribute to the successful resolution of the region's challenges.

UNQUIET QUARTET

To better understand the challenges-and the opportunities-of Latin America today, one ought to focus on four countries: Mexico, Colombia, Argentina, and Venezuela. Their problems have diverse sources but all would benefit from vigorous U.S. engagement.

Dealing with Mexico is in many ways the most important regional task facing the Bush administration. The matter can be summed up simply: President Vicente Fox's consolidation of Mexico's first democratic transfer of power must be-and be seen to be-a success. There is nothing more important to the United States than a stable Mexico, and today a stable Mexico means a democratic one. And the United States has a huge role in making Mexico's transition to democracy a success, or in contributing to its failure. The success or failure of this experiment will be judged in Mexico ultimately in the light of the country's economic performance-which has not been impressive these past two years. But Mexicans will also judge the state of their country's relations with the United States. They will look to see whether Presidents Fox and Bush deliver on the ambitious bilateral agenda they sketched out at their historic February 2001 meeting at Fox's ranch in Guanajuato, Mexico. On issues of trade, drug enforcement, the border, building a North American Economic Community, energy, and, most significant, immigration, the two countries set out a bold series of goals to meet by the end of Bush's first term, if not sooner.

Indeed, in the first eight months of their respective presidencies, Bush and Fox achieved a fundamental breakthrough on immigration. By the time of the Guanajuato meeting, both sides had identified the core policies needed to tackle undocumented migration flows from Mexico to the United States: an expanded temporary-worker program; increased transition of undocumented Mexicans already in the United States to legal status; a higher U.S. visa quota for Mexicans; enhanced border security and stronger action against migrant traffickers; and more investment in those regions of Mexico that supplied the most migrants. The speed with which both governments carried out these negotiations certainly captured the political imagination of both societies. Fox's resounding state visit to Washington on the eve of the September 11 terrorist attacks further lifted the new initiatives and underscored both leaders' commitment to them.

But the symmetry ends there: Fox staked much more on this partnership than Bush did. And since the Mexican president has little to show for his gamble, he has paid a high domestic political price for his willingness to bring about a sea change in Mexico's relations with the United States and the rest of the world. Indeed, this change has been on the order of what President Carlos Salinas did with Mexico's economy or what President Ernesto Zedillo did with the nation's political system. Hence the centrality of immigration in the bilateral relationship today: both Bush and Fox stated dramatic goals and raised expectations enormously. The United States understandably was forced to put the issue on hold for a time. But what was initially portrayed as a brief interlude will now probably stretch through Bush's entire first term.

It will be almost impossible to point to success in the bilateral relationship without a deal on immigration. And unless there is such a breakthrough, Fox's six-year term in office, nearly half over, may well be seen in Mexico as an exercise in high expectations but disappointing results. To avoid a breakdown in relations, Bush must make a state visit to Mexico City this year. He should take with him sufficient progress on key issues-immigration; trade concerns relating to sugar, tuna, trucking, and the North American Free Trade Agreement's agricultural chapter; and funding for heightened security and the expedited passage of people and cargo at the border-to show that Mexico remains a top priority for his administration. Bush must also show that he is willing to spend political capital to ensure the success of Fox's push for true Mexican democracy. Washington may have so far missed an opportunity to present its relationship with Mexico City as a model for the rest of the hemisphere and, indeed, for the rest of the developing world-an example of how a rich and powerful neighbor and a still relatively poor and weak one can get along and contribute to each other's success. But the window of opportunity has not been shut. In the aftermath of the current conflict with Iraq, the United States would benefit hugely by demonstrating that it can construct alliances beyond its traditional circle of friends.

Colombia is almost as important as Mexico to the United States because of the U.S. stake in that country's fight against drug traffickers and insurgents. The problems inherent in such a conflict are manifest. The downing of a U.S.-manned intelligence flight in mid-February close to territory controlled by the Revolutionary Armed Forces of Colombia (known by its Spanish acronym, FARC) was a tragedy waiting to happen. Indeed, rather than being an isolated event, it seems to be a deliberate escalation of FARC's war against the administration of President Alvaro Uribe and the United States. The apparent kidnapping of three U.S. intelligence officials, in the context of deadly bombings in several Colombian cities, underscores the nature of the U.S. and Colombian dilemma. On the one hand, the peace process and the "all-talk, no-fight" policy pursued by former President Andrés Pastrana ended in utter failure because of the guerrillas' total unwillingness to negotiate. But the "all-fight, no-talk" strategy employed by Uribe has led to a predictable outcome: the FARC has unleashed a wave of terror and violence, identical to those loosed previously by the insurgents and the drug traffickers. The country, moreover, seems hardly willing to pay the price required for a military victory over the guerrillas or even for an offensive long and intense enough to force them to negotiate in good faith. Uribe's choice is as illusory and one-sided as Pastrana's, and U.S. support for it is equally misplaced.

Is there a solution? Perhaps, but it is not cheap, complete, or quick. The broad outline of a long-haul strategy should be built around three components. First, Uribe should fight and talk simultaneously, as guerrillas themselves have always done. He should up the ante militarily and continue to receive U.S. support in that effort, but he should also restart negotiations with the FARC and again move forward in talks with the rival National Liberation Army (ELN). Uribe should be able to count on firm and vocal backing from the Bush administration on that score as well. This cooperation should include, if necessary, direct talks between the United States and the FARC and also the ELN-something that Washington has been unwilling to do since three American anthropologists were murdered four years ago near the Darien Gap. Second, the United States should at all costs avoid direct involvement on the ground, regardless of legalistic distinctions between contractual and official personnel, or between trainers, advisers, and combatants, be they overt or covert. Doing otherwise, no matter how great the temptation, will only mire the United States in this conflict.

Finally, Washington and Bogotá should involve the rest of the hemisphere, especially Brazil and Mexico, in the Colombian peace process. These countries should act mainly, but perhaps not only, as mediators. Brazil has proved notably reluctant to participate in the Colombian crisis other than by tightening controls on its border. Brazil's new president, Luis Inacio Lula da Silva, however, may be more forthcoming than former president Fernando Cardoso, especially if cajoled by Mexico in that direction. Other countries, not just in the region but also in Europe, could also help Colombia by isolating the FARC internationally, as Mexico did by closing down the FARC's office in Mexico City. Governments should also investigate potential ties between the FARC and other regional players, such as Cuba. Not only would such outside involvement improve the prospects for negotiating success, but it would also provide political cover for Uribe in what can only be a bitter and bloody struggle.

The third trouble spot is Argentina. Its economic crisis, although contained, is certainly not over. And the longer-lasting consequences of the collapse of the Southern Cone economy are as yet unclear, both for Argentina and for the rest of South America. Partly for reasons of timing (when the crisis exploded the Bush administration still thought it could easily break with the precedents set by previous bailouts from the International Monetary Fund) and partly for circumstantial reasons (Republican dislike for the IMF and former treasury secretary Paul O'Neill's perceived dislike for Argentina), Washington seemed willing to let Argentina "sink until it hit bottom," as one Western leader put it. But neither has it sunk completely nor recovered fully from the collapse of its currency and the deep depression of its economy. As a result, U.S. support for an agreement with the IMF had to be channeled through the government of President Eduardo Duhalde. This approach ultimately translated into backing for a deal that possesses serious flaws and may not even be implemented fully by the next Argentine president, who is to be elected in late May or early June.

Thus it would seem to make more sense for the United States to fully engage Argentina and provide solid support for the new government. At the same time, Washington should urge Buenos Aires to carry out the political and institutional reforms that that nation (and for that matter, all of Latin America) desperately needs. The new president, whatever his or her political persuasion, will require a lot of help, primarily in the form of economic assistance, and the United States should make that assistance available. This support would not be a case of throwing good money after bad. Intervention costs less earlier than later, and benign neglect is not an option, as the economic spillover from Argentina to Uruguay and Paraguay and the political shock waves hitting Brazil and Bolivia have already shown.

Finally, there is Venezuela. After excessive irritation with President Hugo Chávez during the first year of the Bush administration, Washington's attitudes toward the Venezuelan regime had shifted rather remarkably by the time of the attempted coup in April 2002. The unlikely, worst-case explanation of what happened is that the U.S. government bestowed a smile and a wink on the bungling conspirators during the crisis leading up to the coup attempt; the best and most likely rendition is that Washington displayed an almost unheard-of degree of indifference toward those events. Concern did set in after the coup started, but it was once again overtaken by distance and by growing concern with other issues (increasingly, Iraq). Only as 2002 ended did Washington concentrate again on Venezuela, as the oil workers' strike and Chávez's decision to hold onto power at all costs plunged the country into chaos. Secretary Powell then began to consider diplomatic options to work with the Organization of American States and its secretary-general, César Gaviria, as well as with former U.S. president Jimmy Carter. The United States agreed to join the "Group of Friends" of Venezuela created in January, which also included Mexico, Brazil, and Chile, as well as, perplexingly, Spain and Portugal. But that diplomatic effort never got off the ground, Chávez eventually broke the oil strike, and the opposition, the United States, and the rest of Latin America ended up right back where they started more than a year ago.

On the one hand, Venezuela has a democratically elected president. He may have polarized public opinion and driven the country into the ground in response to an irresponsible opposition, but he can hardly be characterized as a communist or a traditional Latin American dictator. On the other hand, the level of animosity in Venezuelan society and the magnitude of the economic collapse guarantee that the crisis will continue. Chávez will retaliate against his opponents, they will continue to plot and demonstrate against the government, and all of this will put the country's fragile institutions to a terrible test and frighten its neighbors and friends who know that such situations never end well.

Which is perhaps why, now that tensions have slightly receded, it might be time for Washington to participate in a less formal, more realistic initiative together with Chile, Brazil, and Mexico. Such an effort should seek to place a series of compromise proposals on the table, and then use different methods to transform them into offers that neither party could refuse. The United States can, as it did in the Central American peace talks nearly 15 years ago, deliver the opposition. And the major Latin American countries might be able to convince Chávez that it is in his interest to cut a deal that is less than perfect, but that will allow him either to depart in a dignified manner or to continue to govern in a reasonably effective way. Just as some insisted that no Group of Friends would be viable without the United States, there is no way out of the Venezuelan imbroglio without American engagement. The cost of letting these wounds fester is steep: for the Venezuelan people; for neighboring countries such as Brazil and Colombia; for Mexico, now one of the largest investors in Venezuela; and for the United States, which still relies on the country for more than 15 percent of its crude oil imports.

LOOK ON THE BRIGHT SIDE

If the preceding cases resemble a long list of brewing regional troubles, there are also a couple of bright spots in the region, where the United States has proceeded judiciously and can continue to do so with ease. Moreover, Washington with a few relatively simple steps can do much to bridge the gap with the rest of the region.

The Bush administration, and its insightful and skillful trade negotiator, Robert Zoellick, concluded a sophisticated free trade agreement with Chile in December 2002. Chile's economic and social situation, although lacking the spectacular results of the period from 1985 to 1999, is also solid and secure. Thus, just staying the course with Santiago would be fine policy for Washington. In addition, Chile has adroitly managed its relations with the United States, engaging intelligently and effectively with it both at the UN Human Rights Commission and at the Security Council. President Ricardo Lagos is rightly considered Latin America's elder statesman today; when he speaks on international matters, everyone in the region listens.

Brazil is the region's other bright spot, perhaps of greater import because, in the end, size does matter. Washington dismissed ideological prejudices and played its cards right during the presidential campaign that took Lula (as the new Brazilian president is universally known) to power. The Bush administration has refrained from estranging the new government and has constructively engaged Lula's team on a potentially divisive issue, the involvement of the Group of Friends in Venezuela. Brazil's new leader, for his part, has chosen a wise course of avoiding confrontation with the United States and pursuing domestic policies that are acceptable to the markets and would not ultimately scare the Bush administration into being more assertive. Yet Lula has not betrayed his platform or his followers. He is implementing many of his campaign promises, his social programs are ambitious yet feasible, his team is diverse and representative, and he could well be the harbinger of the great transformation, or aggiornamento, of the Latin American left that has been so long in coming.

Washington should do everything it can to help Lula succeed. It can go beyond benevolent neutrality to actively endorsing his regime with the markets, the IMF, and the World Bank; the United States can become a cheerleader for Lula, obviously not on ideological grounds, but because he is a democratically elected leader with sound social and economic policies. The value of such an effort is the same as it would be in Mexico: contributing to a Lula success story would generate enormous benefits for Washington. The reward would be not only the stability of Brazil, something of paramount value to the region and the United States. Most important, such a policy would show that the Bush administration can work constructively with regimes that are not its ideological soul mates, but that are nonetheless willing to reach out to the United States and find common ground. Again, as in relations with Mexico, this is no small matter in the aftermath of conflict with Iraq and U.S. estrangement from the rest of the world.

That common ground is not as difficult to reach as some may think, particularly when looking at the broad problems that Latin America faces and how the United States can address them. Economic stagnation is of course the most salient one, as well as the single issue felt most directly by the region's inhabitants. The core concern here is restarting economic expansion, at a time when regional growth rates have once again dropped to very low levels. In addition to the debacles in Argentina and Venezuela last year, Mexico and Brazil both suffered practically flat economic performances in 2002, and the prospects for 2003 are dropping daily. The United States can play a role here, both through its own economic recovery and by pushing for a more open trade agenda in the new World Trade Organization talks leading up to the ministerial meeting in Cancún, Mexico, next September. The U.S. stance in the WTO's "Development Round" has in fact been more constructive than the European Union's. But other U.S. steps-such as implementing huge agricultural subsidies and steel import tariffs-have deeply disturbed many in Latin America, particularly those in countries such as Argentina and Brazil, for whom agricultural or steel exports are crucial. The United States can do much more to open up its markets in these areas.

Washington can also add a new dimension to the FTAA agenda, which is partly dormant as a result of Argentine, Brazilian, and Mexican wariness. Since the third Summit of the Americas in 2001, many countries have pointed out that free trade on its own will not easily nor automatically pull up the least developed countries in the region. Accordingly, they have called for the inclusion of some type of resource-transfer mechanism for the poorest parts of the hemisphere. Again, such a step may not be ideologically palatable to the Bush administration, but it would be in the U.S. national interest. Like the equally counterintuitive announcement of gradual increases in the U.S. foreign aid budget at the Monterrey development summit in March 2002, a resource-transfer proposal would be extremely well received in Latin America and would provide a stimulus to the faltering free trade negotiations.

With respect to issues of good governance, the United States can also help solve some of Latin America's most intractable problems. Many in the region today believe that the main obstacles to growth are neither the weakness of economic reforms (essentially the conservative view) nor the nature of the reforms themselves (the left's perspective) but rather the poor quality of governmental institutions and corporate practices. Reforming both is perhaps the region's greatest challenge-and last opportunity-to return to growth. These reforms require political will, resources, and a friendly international environment. They could include jettisoning Latin America's two-centuries-old system of presidential regimes, which have never worked under truly democratic rule nor with open societies. And they could also foster a crusade to establish the rule of law throughout the region. In too many nations, human rights, property rights, due process, an efficient and accessible judicial system, and brief, nonprogrammatic constitutions are either insufficiently represented or inadequately respected. Through the World Bank, the U.S. Agency for International Development, bilateral agreements, and other regional mechanisms, Washington could contribute actively to the modernization of Latin American institutions and thus help remove the remaining obstacles to renewed economic expansion.

By doing so, the United States would also send a strong signal that it is committed to democracy in Latin America. The U.S. response to the recent Venezuelan coup attempt was not a shining moment in this regard. The potential lack of compliance with human rights considerations in current and future anti-insurgency campaigns in Colombia could be another setback. Thus the Bush administration must emphasize that its support for democracy and human rights in Latin America holds regardless of the specific regimes this policy may help or the specific obstacles this may generate with respect to other goals. This commitment is essential to U.S. credibility in the region. Moreover, the United States would firmly establish itself as an ally in building democracy, rather than a hindrance or a fickle companion that engages or disengages depending on its interests.

A final area in which the United States and Latin America could cooperate fruitfully is in the conduct of international diplomacy. For instance, Chile's and Mexico's role on the UN Security Council can have an important effect on U.S.-Latin American relations. Although neither voted against the United States, they clearly felt reluctant to go along with the use-of-force resolution sponsored by the American, British, and Spanish delegations. This may have generated some irritation in Washington, but the Bush administration should use this opportunity to show that friendly relations do not require unconditional support and that there are no hard feelings. Nevertheless, both Santiago and Mexico City remain committed to working with Washington to provide diplomatic leadership on important regional issues such as the Special Conference on Hemispheric Security, which will take place in Mexico City during the summer.

BRAVE NEW CONTINENT

The challenges that Latin America faces today, even for a part of the world accustomed to adversity, are awesome. If those challenges are compounded by the lack of a bold, ambitious, and enlightened U.S. approach to the region, then undoubtedly they will be still more daunting. And yet the opportunities are also greater today than ever before. The Cold War is long gone. Democracy has taken hold nearly everywhere in the region, as has at least the principle of respect for human rights. Many Latin American governments, perhaps starting with Mexico, are accepting that there is no better ally for domestic change than scrutiny, commitment, and support from abroad-preferably multilateral in nature, although bilateral ties can certainly play a part.

Across the region, people now realize that market economies of one sort or another-not necessarily the "one-size-fits-all" model purveyed by the Washington Consensus-are here to stay, and that their advent is not such a bad thing. And increasingly broader swaths of Latin American societies now accept that globalization and closer ties with the United States are facts of life, and not necessarily undesirable ones. The United States, despite its sporadic bouts of parochialism and unilateralism, and its reduced attention span, has shown open-mindedness in recent times. For instance, the early Bush administration, the AFL-CIO, and Federal Reserve Board Chair Alan Greenspan all accepted in principle a new pro-migration stance toward the region. The U.S. Congress has also virtually suspended the much-loathed counterdrug certification process. So there is progress to cheer about, but clearly much more to hope for. To turn hope into reality, the entire region needs leadership, vision, and the will to achieve. Both Latin America and the United States have ample reserves of all three.

<a href=www.globes.co.il>Israel' Business Arena Oren Persico   5 May 03   09:49

Israel manufactures and exports a great many weapons. The subject almost never arises in public debate, and when it does, people yawn, as if the Jewish people have always been arms manufacturers and merchants.

After all, a nation living under the threat of war naturally makes weapons, and a country that makes weapons naturally looks for foreign markets for them. How large is Israel’s arms industry and how much does it export? Government ministries classify this information as privileged, but it is possible to learn about the extent of exports from foreign institutes and publications that monitor the international arms market.

“Defense News”, one of the world’s most respected journals covering the arms market, recently reported that Israel is now the world’s third largest arms exporter, after the US and Russia, with arms exports worth $3.7 billion in 2002.

Israel’s ranking jumped from its previous position in the bottom half of the top ten arms exporters. In 2001, Israel’s arms exports totaled only $2.6 billion. Israel’s arms exports rose 40% in 2002, and the country overtook Germany, UK, and France, to become a global arms power.

The nature of Israel’s arms deals in recent years can be found in the Stockholm International Peace Research Institute (SIPRI) publications. SIPRI’s yearbooks report large-scale arms deals, among other things. Following are some prominent Israeli arms deals in the 1990s: 96 Barak air-to-ground missiles to Singapore; 100 Popeye air-to-ground missiles to the US; six Kfir jet fighters to Ecuador; 15 Kfirs to Sri Lanka for use against the Tamil Tiger rebels; ten rocket launchers to Chile; 18 radars to Singapore; 130 anti-tank missiles to Estonia; ten anti-ship missiles to Chile; 18 155-mm artillery pieces to Slovenia; 100 unmanned aerial vehicles (UAVs) to South Korea; 15 tanks to Uruguay; 600 Python air-to-air missiles to Singapore; 46 Popeye missiles to Turkey; five 155-mm towed-artillery pieces to Botswana; ten radars to Chile; 48 Python missiles Ecuador; 28 UAVs to Switzerland; eight 155-mm towed artillery pieces to Cameroon; 960 Spike anti-tank missiles to Romania; six UAVs to Finland; two UAVs to the Philippines, for use against the Abu Sayyaf and other Muslim guerillas; 54 Barak missiles to Venezuela; 84 Python missiles to Chile; a landing craft (LCT) to Eritrea; a Bell helicopter to Argentina; and four Skyhawk jets to NATO.

Israel Aircraft Industries VP Corporate Communications Directorate Doron Suslik says IAI signed $3 billion worth of new contracts in 2002. Assuming that almost 60% of the amount consists of arms exports, IAI exported almost $1.8 billion worth of military equipment last year.

The Golda Meir era is over

SIBAT - Foreign Defense Assistance and Defense Export Organization deputy director Meir Shalit declines to either refute the truth of SIPRI’s figures or to comment about specific deals. He estimates there are 150-200 Israeli defense exporters, ranging from major government companies to tiny two-man firms. 50,000-60,000 people work in Israel’s defense industry, and they generate up to 25% of Israel’s annual exports. It is a huge industry that maintains a low profile.

IAI president and CEO Moshe Keret praised his marketing staff at IAI’s latest marketing convention. Yet, in the arms market - Israel’s largest exporter - advertising and marketing are largely irrelevant compared with political calculation and proven battlefield effectiveness.

Shalit says the time when politics played the dominant role is over, “In the 1960s all the countries in the world exported arms as part of their foreign policy, but that has passed. The defense market is just like any other market now. Sometimes it’s a buyers market, and sometimes it’s a seller’s. The customer buys the best product at the best price, because there’s an over-supply. Many companies from many countries compete for the large-scale tenders in an attempt to expand their market share. This is because, except for last year, due to the impending US-Iraq war, the defense market has been shrinking.”

Shalit admits, however, that Israel’s foreign policy dictates to whom its defense industries can sell arms. In his book “A Double-Edged Sword. Israeli Defense Exports in the 1990's" (Am Oved, 1992. In Hebrew), Prof. Aharon Klieman wrote, “Arms transfers are a dual-purpose political-security tool, essential for Israel’s security position, and an unavoidable critical component of foreign policy. Consequently, Israel’s diplomacy of arms exports is a kind of extension of Israel’s general approach to foreign affairs.”

This means that in its largest export market, Israel plays by very different rules than in every other sector. Arms customers are usually sovereign states, and purchasing calculations are not always based on advertising or marketing, but on a wide range of influences and pressures.

IAI has an extensive marketing deployment with offices or local representatives or agents in 85 countries. Suslik says IAI budgets $1.6 million a year for advertising in foreign publications, such as “Defense News”, “Aviation Week”, and “Jane’s Defense Weekly”, and on pertinent websites. That is only a fraction of IAI’s annual budget, but the advertising is mainly directed at creating market awareness about the company, rather than actually trying to convince a customer to buy the company’s products.

Suslik says, “We use integrated marketing tools, including traditional advertisements in journals, and participating in fairs and exhibitions. But the moment the Israel Air Force revealed, in April 2000, the Arrow anti-ballistic missile system in a public ceremony at Palmachim in the presence of the US ambassador, IAI executives, the Air Force commander, and Israeli and foreign media, and announced it was adopting the system for the country’s defense, it gave us an extraordinary first-class marketing edge.

“If I obtain pictures from the Ofek 5 reconnaissance satellite a few days after launch, and Minister of Defense Benjamin Ben-Eliezer then shows pictures of Iraq at a cabinet meeting, and the story is leaked to Hebrew daily “Yediot Ahronot” the next day, we get an exceptional marketing boost.”

Psst! Wanna buy an air-to-air missile?

Advertising for IAI and Rafael (which SIPRI ranked as the world’s 43rd largest arms exporter in 2000) is handled by an ad agency that prefers to remain anonymous and uncredited for this article. The reticence might be out of moral consideration, and what agency would like to be associated with ads that encourage the consumption of weapons that might kill innocents, or even boomerang to hit Israeli targets. Or the reticence might be out of professional considerations, since some of the ads provide a healthy dose of humor in a very serious industry. An ad for Rafael’s device to break down doors, for instance, shows a picture of a soldier firing and a huge explosion, with the caption, “Open Sesame”. Another ad for Rafael’s Spike anti-tank missiles shows a missile and a massive explosion, with the caption, “Spike was here”. The pictures are accompanied with systems’ technical details and advantages written as if for a sophisticated radio: “Easy to use, easy to assemble, fire and forget.”

Rafael marketing director Dr. Eitan Yudilevich says weapons have to sold like toothpaste. For him, the company’s ads meet their purpose. Rafael spokesman Noah Shahar says marketing weapons is different than marketing ordinary products.

Shahar says, “Let’s be honest, if I were to simply advertise an air-to-air missile, no one would buy it. You don’t buy air-to-air missiles in the supermarket. So why do I advertise? I’ve argued with the company’s executives and financial managers about this for years. I show them that companies like IBM (NYSE:IBM) and Coca-Cola (NYSE:KO) advertise constantly. The question is whether that’s appropriate for defense products, too.”

War as sales promotion

“Globes”: What is the concept behind the advertising? Will an admiral leafing through the magazine see the ad and say, “Ah, ha!”?

Shahar: That’s the million dollar question. I don’t have an answer, but magazines are full of ads for major players like Boeing (NYSE:BA) and Lockheed-Martin (NYSE:LMT). Are products bought on the strength of these ads? I don’t know, but my advertising concept is show that we exist; we’re on the map.”

It often seems like the advertising efforts are dwarfed by battlefield results. Suslik tends to concur, “Some of IAI’s products have combat reputations, which gives them a marketing boost over competing systems. The defense industry makes weapons, and weapons must be tested on the battlefield. That’s their real test.”

So the Iraq War was a superb sales promotion campaign.

“Unfortunately, during the run-up toward the war and during the war itself all intelligence, UAV, and command and control systems get a major push. If this were peacetime, countries would still be examining their operational and financial needs for procuring weapons systems, as these are not cheap, the examination and procurement processes would take longer. Since this was a time of war, and countries were worried about missile attacks from Iraq, the feasibility studies about the Arrow anti-ballistic missile system or UAVs, for instance, took on a whole new urgency.”

Shimon Peres’s mettle

Klieman’s book “Double-Edged Sword” is one of the most thorough analyses of Israel’s arms exports. He concludes quite simply every Israeli government since Ben Gurion has supported arms exports. Israel’s governments have invested vast sums in the country’s defense industries, and encouraged manufacturers to export. Klieman writes, “The question whether Israel should participate in the arms export business as a matter of principle was never discussed, nor is there any evidence that the various aspects of this question has ever been a matter for serious public debate.”

The only time an arms deal aroused a storm of controversy and Knesset debate was in 1959, when it was revealed that Israel had sold mortar bombs manufactured by Soltam to the Federal Republic of Germany. The debate was not about the fact of arms sales in general, but the particular customer, only a few years after the Holocaust. In his defense of the sale, Prime Minister David Ben Gurion revealed the protocol of the cabinet meeting in December 1958 that decided to give the Ministry of Defense the authority “to sell arms to foreign states in all cases where the Ministry of Foreign Affairs does not object.” Ben Gurion told the Knesset, “In all matters of foreign affairs, we ask ourselves one simple question: ‘What is best for Israel?’ If it is good, then all my emotions and Jewish instincts, and all my Jewish pride and humanity tell me, ‘Do what is best for Israel and what is necessary for its defense.’”

Arms exports had actually begun several years previously. In August 1954, Israel sold $1 million worth of Spitfires and $700,000 worth of rifles to Burma. That same year, Israel also sold artillery shells to the Netherlands, and other defense products to Belgium, Turkey, Italy, Ceylon (now Sri Lanka), Nicaragua, and the Dominican Republic. The customer list has grown longer since then.

As Ben Gurion’s protégé, Shimon Peres was an enthusiastic supporter of Israeli weapons development. While serving as Ministry of Defense director general and Deputy Minister of Defense in 1953-65, he encouraged military technology development. As Minister of Defense in the first Rabin Government in 1974-77, he completed a plan he had personally prepared a decade earlier. Kleiman quotes Peres as saying, “The defense relations of some countries do not necessarily conform to their ordinary foreign policies… and we must recognize this fact.”

Guns and avocados

Israel’s arms exports surged after the 1973 Yom Kippur War. Unprecedented global demand, the lifting of arms sanctions on Israel, and the IDF’s combat experience in two critical wars pushed Israel’s defense manufacturers into international markets. In the years after the war, Israel’s arms exports grew almost geometrically. The exports were frequently described as forced on Israel by circumstances. In 1982, then-Minister of Defense Ariel Sharon told Hebrew daily Ma’ariv, “We’d be delighted if Israel’s exports consisted solely of flowers, avocados, tomatoes, computers and advanced medical devices. But that is not enough to ensure what is necessary and essential… With all due respect to those who what to make moral considerations paramount, there is no choice but to recognize a matter that touches on our very existence and survival… Israel must therefore develop military research and exports.”

In “Double-Edged Sword”, Klieman writes in depth about the necessity of developing Israel’s defense industry. In addition to government encouragement and the inexorable inertia of local manufacturing leading to exports, another factor behind the accelerated development of Israeli weapons was arms embargos imposed at various times by the UN, US, France, and others that blocked sources of needed weapons systems.

The problem is that the expanded arms production intended to supply the IDF without relying on foreign sources was not achieved. Israel is also one of the world’s largest arms importers, and needs US military aid to help pay for it. More seriously, increased arms production combined with reduced procurements by the Ministry of Defense necessitated the search for foreign markets. Otherwise Israel’s defense industries would collapse and its tens of thousands of employees laid off. Moreover, the international arms market is not exactly stable, and it suffers from unpredictable fluctuations in demand. Consequently, Israel also has to consider its potential arms customers in terms of market fluctuations and jobs of thousands of its citizens.

Export or die

Former Ministry of Foreign Affairs director general Alon Liel puts his finger precisely on this dilemma and its consequences. “The overall picture is that since the 1970s, we’ve had an arms industry that would die if it didn’t export. Consequently, there is intense pressure to find customers, because without them there are no arms for the IDF either. Every serious arms industry must be large-scale, otherwise you become obsolete and non-competitive. A small arms industry cannot survive, especially for heavy arms and aerospace. For the same reason, there cannot be a small car industry. You’re either big or dead. If you’re big, you need a market, and the IDF isn’t a big enough customer for the defense industry. The IDF procures a third of Israel’s defense industry’s output, which means two-thirds must be exported.”

Haim Tal, today a documentaries film director who in the past worked on the Arrow’s development, adds, “It sometimes happens that the Ministry of Defense and IDF’s interests diverge. The defense industries want to supply work and the IDF wants to deliver security, and these are not necessarily the same thing. The IDF’s combat doctrine is now derived from the tools at its disposal, not the threats or advantages it could create.

“Take the Merkava tank for example. The Merkava is too big for the IDF and the country, because there are weapons systems much more effective than endless columns of tanks. Consider the potential enemies: Syria’s tanks are obsolete, and the Palestinians have homemade Qassam missiles. A couple of months ago, at the height of the Ministry of Defense caterwauling over its budget, IDF GOC Army HQ Maj.-Gen. Yiftah Ron-Tal said at a press conference after a training exercise that the situation was critical. The IDF is beginning to procure the Merkava Mk. 4 tank, but probably cannot afford it, with the result that a lot of people will lose their jobs. Why should an army commander be concerned about Ministry of Social Services matters?”

Another dilemma arising from the manufacturing paradox is that Israel frequently sells arms to regimes of dubious reputation.

Liel says, “This wasn’t a problem until the 1970s, but when you start large-scale arms manufacturing, exports are essential for the industry’s survival. You have to find a major new customer every 5-10 years. This is how we found all our major customers like Iran, South Africa, Turkey, and India. Whether the regime is democratic or not is irrelevant, because it’s a matter of survival. If you have ones arms order for $1.5-2 billion, even if it’s spread over several years, you can barely keep your head above the water, and if you don’t have a customer like that, you’ll drown.”

Iran, South Africa… who’s next?

Liel says, “The defense establishment tends to develop special relationships with major arms buyers. Iran and South Africa were examples of non-democratic countries that were customers for Israeli arms. It’s actually easier to sell to democracies, because you can do so openly. We sell openly to India and Turkey. But there are always smaller customers in the shadows, and you convince the Ministry of Foreign Affairs that the deal is important. If the Ministry of Foreign Affairs concludes that the deal won’t cause diplomatic complications and will help the defense industry, it usually approves the sale.”

Liel once wrote Hebrew daily “Ha’aretz” stating his objection to the sale of riot control vehicles built by Beit Alfa Technologies to Zimbabwe’s dictatorial President Robert Mugabe, who has imposed a regime of terror against political and tribal opponents, most notably the country’s white farmers, including Jews.

Pinochet is too hot to handle

As Liel hinted, Israel’s relations with some of the world’s less salubrious regimes have long been a source of worldwide obloquy. The clearest examples of dirty arms dealing are with the Apartheid regime of South Africa (whose sophisticated arms industry began selling Israeli-based arms to Israel’s Arab enemies after the Apartheid regime fell in 1994), and the Shah of Iran before the 1979 revolution. The 1973-90 dictatorial regime of General Augusto Pinochet of Chile is another example.

Not all Israeli arms sales are conducted by defense companies’ sales reps. Arms merchants sometimes broker deals between manufacturers and potential customers. These brokers usually get a percentage of the deal as a commission, which they sometimes use to bribe the potential buyers to choose Israeli arms. Another sales method is a direct official approach by the Israeli government to a foreign one. The most bloodstained of the three sales methods is usually the use of independent arms brokers, because they offer the government plausible deniability for transactions that cannot receive official sanction.

The arms sales to Pinochet’s Chile were official and aboveboard. In 1978, then-IDF Chief of Staff Lt.-Gen. Mordechai Gur visited Chile to promote defense sales, and claimed that allegations of large-scale torture and murder by the regime were untrue. Israeli arms sales to Chile at the time included three missile boats for $100 million, maintenance equipment for air-to-air missiles, anti-tank missiles and radars.

International embarrassment

Another dubious customer was Angola. The Angolan Civil War between the MPLA government and UNITA rebels, which had been ongoing since independence from Portugal in 1975, broke out anew in 1994 after a recently-signed peace agreement broke down. The UN Security Council imposed an arms embargo on the region, but foreign reports claimed that Israel had sold millions of dollars of light arms and ordnance, two helicopters, and a reconnaissance plane to the Angolan government. Israel also helped maintain and upgrade Angola’s Russian-built tanks and MiG fighters.

Israel also reportedly sold arms to UNITA, including anti-tank RPG bazookas, munitions, and 2,000 AK-47 Kalashnikovs.

Israel suffered another international embarrassment in 1989, when it was revealed that Hod Hahanit (Spearhead), a company headed by Yair Klein and Col. (res.) Yaakov Biran had trained Colombian drug cartel death squads.

Shalit stresses that things are different now. “Arms sales to dictators are a thing of the distant past. The approval procedure for arms sales is a two-stage process. First, the manufacturer applies for a permit to open negotiations. This includes the preliminary stages that precede negotiations, such as sales promotions, exhibitions and advertising. Manufacturers apply to SIBAT, whose procedure includes committees of experts from the Ministry of Defense, IDF, and other organizations. The committee decides whether or not to approve the permit, and under what conditions.

“At this point, the customer gets a permit that stipulates the name of the manufacturer, marketer, product, ID number, and end-user. There is no room for error. After the contract is signed, comes the actual export. The customer again applies to SIBAT for an export license. We again check the application, to see if there has been a change in policy or parameters.”

What are the parameters?

Shalit: “Israel’s defense export policy is based on several cornerstones. The Ministry of Foreign Affairs gives the first input. Then there are UN resolutions. We are members of the UN, so we comply with all [Security Council] resolutions regarding arms exports. Israel fully complied with the UN arms embargo on Yugoslavia [during the civil wars of 1991-95]. Israel also complies with international inspection regimes, even when it is not a member of them, as well as with legislation by foreign countries that block follow-on exports.”

Can you cite an example of Israeli arms exports that were blocked because the customer might use them in an unacceptable manner?

“A few years ago, we gave a permit to a certain company to negotiate with Rwanda. They applied for an export license after the contract worth tens of millions of dollars was concluded. SIBAT refused because Rwanda began throwing children out of helicopters, and the UN also imposed an embargo. The manufacturer accepted the loss and didn’t export the munitions.”

The Rwanda affair

Meanwhile, “Financial Times” reported that Israel was a source of arms shipments to the Rwanda government responsible for the genocide of almost a million minority Tutsis and moderate Hutus in one of the most brutal campaigns of mass murder in human history.

“ Financial Times” claims that the arms were sent from Tel Aviv to Albania, where they were trans-shipped to Rwanda in April-July 1994, when the genocide was at its height. The Ministry of Defense was almost certainly unaware of the deal, which was a gross violation of international treaties.

In 1998, it was reported that then-Prime Minister Benjamin Netanyahu decided not to cancel a deal to sell upgraded MiG 21s to Ethiopia, despite its ongoing border war with Eritrea. Eritrea’s ambassador to the UN condemned the deal. Netanyahu’s media advisor Aviv Bushinsky said the deal had been approved because the planes would have been delivered only a year later, in the hope that a peace agreement would be worked out in the interim.

If that were not enough, there is the 1986 Irangate affair, which proved that Israel’s arms sales to Iran did not end with the 1979 Khomeini revolution. Then there was the case of PAD Ltd., owned and managed by Avihai Weinstein, which is suspected of involvement in the sale of military products to Iran, including US-made rubber pads for M-113 APC tracks. The shipment was seized by German customs in August 2002. PAD Ltd. naturally did not have a SIBAT export permit for Iran.

Tal says, “SIBAT can decide to sell arms to a dictatorship, and there is no one sufficiently sensitive to notice, because there are no peaceniks on its committee, only former combat veterans who were comrades in arms. They’re the ones who sell military know-how and weapons. If it were up to me, I’d sever SIBAT from the Ministry of Defense, and subordinate it to the Ministries of Foreign Affairs and Justice, which would be much more logical. I’m sure they comply with all the sales criteria, but something always reeks over there. Greasing the wheels is an inseparable and acknowledged part of the deal. A lot of money goes to all kinds of characters, without tax receipts, in order to promote sales. A sale is declared at a particular price, but in practice, part of the money is kicked back to the buyer. No one talks about it; it’s part of the rules of the game.

“There are also a lot of back-scratching. If you’re a slick and well-connected arms trader, you’ll find the connections to make a deal. The Karine A [an arms shipment to the Palestinian Authority seized by Israel in January 2002] had permits, bills of lading, etc. Israelis can’t do the same thing? You can always find a legitimate customer who resells the arms to a third party. I doubt if SIBAT will scrupulously send agents to investigate the end user of an arms shipment.”

Last, but not least, are Israel’s arms sales to China. In early 2002, the world saw pictures of Chinese F-8 fighters carrying Rafael Python 3 air-to-air missiles, taken by US planes, after a Chinese jet and US reconnaissance plane collided off the Chinese coast. Israel also contracted to sell to China IAI’s Phalcon AWACS, equipped with Elta Electronics Industries’ sophisticated electronics, until heavy pressure by the Clinton administration lead to the cancellation of the deal in July 2000.

Tal says, “When I spoke with Keret after the deal fell through, he told me, ‘Look, if we were talking about a deal worth a few million dollars, $50 million, or even $70 million, I’d worried. But when we’re talking about a $250-500 million deal, I’m less worried, because it affects both of us. Understand? It’s on both our accounts.”

These are only a few of the details known to anyone who bothers to seek them out. This is not an investigative tale or a scoop, merely a selection of the inevitable consequences of Israel’s large-scale arms exports. The question of whether it is justifiable to invest so much money in developing an Israeli arms industry is no longer relevant. The industry exists and employs tens of thousands of people who build some of the best weapons in the world.

The question that remains to be asked is why all this doesn’t lead Israelis to question their country’s arms industry.

Published by Globes [online] - www.globes.co.il - on April 29, 2003 Next article:   Drunk with success

The national Review Online May 2, 2003, 1200 p.m. By Rachel Ehrenfeld

hen Secretary of State Colin Powell arrives in Syria on Saturday, he will no doubt raise the issue of Hezbollah with Syrian president Bashar al-Assad. The Syrians claim that they have no control over Hezbollah. Besides, Damascus will argue, Hezbollah's terrorist activities are aimed only against Israel, and therefore are justifiable. But Secretary Powell should recall the recent statement of Hezbollah secretary-general Hassan Nasrallah, made in the run-up to the U.S.-led war in Iraq: "In the past, when the Marines were in Beirut, we screamed 'Death to America!' Today, when the region is being filled with hundreds of thousands of American soldiers, 'Death to America!' was, is, and will stay our slogan."

 Syria's support for the Lebanon-based Hezbollah has made it a virtual terrorist powerhouse. Syria not only shelters Hezbollah and transfers Iranian weapons, including thousands of short-range artillery rockets and ballistic missiles, to the group. It also provides them with arms from its own stockpiles and millions of dollars worth of assistance in the form of training facilities and logistical and technological support. This help has, to a large degree, made the Shiite militia's war on Israel possible. In return, Hezbollah officials understandably lavish Damascus with praise. In an interview on Syrian TV in June 2002, Hassan Nasrallah praised Syria for remaining a "safe haven for jihad . . . the geographical and political refuge adopting the resistance movements in the region." 

And Syria's support is just the tip of the iceberg. Deputy Secretary of State Richard Armitage was right to label Hezbollah as the "A-team" of today's terrorists. By conservative estimates, Hezbollah's international network includes at least 15,000 operatives in cells in the U.S., Canada, Argentina, Paraguay, Brazil, Belgium, Britain, France, Germany, Spain, Switzerland, Indonesia, Malaysia, and throughout Africa.

Hezbollah's presence in the lawless tri-border region of South America, where Argentina, Brazil, and Paraguay intersect, is of particular concern. In the mid-1980s, Hezbollah clerics and members of other Islamist organizations began proselytizing, planting operatives from the Middle East, and recruiting new members from among the tri-border region's residents. The jungles in the region were soon filled with terrorist training camps, which continue to turn out well-trained operatives to this day. In addition, Brazilian, Colombian, and Argentinean intelligence sources report that special weekend camps, run by Hezbollah, train children and teenagers in the use of weapons and combat techniques, as well as indoctrinate them with Ayatollah Khomeini's anti-American and anti-Jewish ideologies.

Hezbollah is heavily involved in the illegal drug trade in the tri-border region, as well as in money laundering, drugs-for-arms deals, and straightforward drug trafficking. Hezbollah operatives have developed strong relationships with major narco-terrorist and drug-trafficking organizations from Colombia, Peru, Bolivia, and Venezuela, including the Revolutionary Armed Forces of Colombia (FARC), the National Liberation Army (ELN) in Colombia, and the Sendero Luminoso (Shining Path) in Peru.

Brazilian authorities have estimated in recent years that criminals in the tri-border region have been laundering approximately $6 billion annually. According to Paraguayan interior minister Julio César Fanego, from 1999 to 2001 Hezbollah received anywhere from $50 to $500 million from this region alone. And Brazilian security agencies estimate that at least $261 million was sent from Islamist organizations operating in the tri-border region to the Middle East. Most of it went to Hezbollah just in the year 2000.

Secretary Powell's visit to Damascus provides the White House with the unique opportunity to press Syria to stop its involvement with and sponsorship of all terror organizations, particularly Hezbollah — possibly the single-largest threat to the U.S. after al Qaeda. If Powell is successful, we will be one step closer to victory in the war on terrorism.

— Rachel Ehrenfeld is director of the Manhattan-based American Center for Democracy. Her new book Funding Evil: How Terrorism Is Financed and How to Stop It, is due out this summer.