At a lavish international reception for leading world politicians a beautiful young lady descended the steps to the party. All the other women gathered around her. They were interested in the lovely ring worn by the lady. It was a large blue brilliant-cut diamond surrounded by a bezel of other diamonds set in a platinum setting. One of the women asked her, “What a fantastic diamond. What is it called?”. She answered, “This is the famous Lipschitz Diamond, 42 carats and deep blue.” The woman replied, “You are very lucky to have such a ring.” The lady replied “Yes, but like many of these famous diamonds there is a curse which goes with it.” The woman asks, “And what is the curse?”. The lady answers “Mr. Lipschitz”.
Well, on Sunday, the Knesset of Israel acted to lift the curse on the Lipschitz Diamond; after twelve years it separated Mr. Netanyahu from the diamond. The new government of Naftali Bennett can use the diamond without Netanyahu. The diamond represents the Israeli defence industry and its prominent role in the world’s defence arsenal. It is strange that, outside the world’s suppliers of arms and military systems, the key role played by Israeli companies in the worldwide industry, is not understood. What is circulated in the world press after attacks like that against Gaza, are rebukes to the nations of the world for selling sophisticated arms to Israel.
Congressional complaints were raised in the U.S. at the recently approved $735m in weapons sales from the U.S. to Israel. Under a security assistance agreement spanning 2019-2028, the US has agreed - subject to congressional approval - to give Israel $3.8bn annually in foreign military financing, most of which it must spend on US-made weapons. That is around 20 percent of Israel's defence budget, and almost three-fifths of US foreign military financing worldwide. But the US also sometimes gives additional funds, on top of its annual contribution. It has given an extra $1.6bn since 2011 for Israel's Iron Dome anti-missile system, with parts that are made in the US. The long list of private US companies involved in supplying Israel with arms includes Lockheed Martin, Boeing; Northrop Grumman, General Dynamics, Ametek, UTC Aerospace, and Raytheon
There were complaints as well in Europe and Asia about supplying weapons to Israel whose IDF uses them its periodic episodes of violence. The second-biggest exporter of weapons to Israel is Germany. Germany issued licences for arms sales to Israel worth 1.6 billion euros ($1.93bn) from 2013-2017. The third largest supplier is Italy, which delivered €476m ($581m) worth of arms to Israel in the same period. The United Kingdom and Canada are not far behind.
What this public outrage about arms supplies to Israel demonstrates is that the public have no idea why Israel is so enmeshed in the trade in arms. The simple reason is that the sophisticated Israeli arms industry, (Raphael, Elbit, IAI and others) is the R&D section of many, if not most, of the world’s weapons system. The formative work on UAVs, targeting systems, airborne radar, cyber systems, and a host of other technologies were discovered, perfected and adapted in Israeli companies and think-tanks. Israeli innovation of aircraft, missiles and the like grew out of necessity and attracted the interest of the international community. Israeli labs may produce and refine the technologies but are in no shape to produce, let alone mass-produce, the weapons in its own small country. Even worse, where would they store the products? It is a dangerous neighbourhood in which they live; far too dangerous to store modern weapons of war.
The large U.S. German, British and Canadian corporations have a deal with Israel. You do the research, and we’ll do the manufacturing, storage and delivery, plus any adaptations for their own theatres of conflict. They pay for this with fees for the research and in the products which their joint work produces. A substantial part of the arms sales to Israel of sophisticated machinery and systems is a notional sales deal which involves massive offsets at its heart, reflecting the Israeli contribution and licensing.
So, in short, the Lipschitz Diamond is crucial to the technical development of the world’s defence industries. Banning arms sales to Israel is self-destructive and foolish. The loss of Netanyahu may make it easier to present a gentler appearance to a vital, deadly and important trade.