Once Israel was known as an exporter of Jaffa oranges. Now it is an exporter of arms, one of the largest in the world. Israel exports arms worth about $6 billion a year. Dozens of former senior officers travel the world trying to sell arms. Their slogan: What is good for the Israel Defense Forces is good for you.
Most of the defense industries are part of the Defense Ministry. They are a few sizes too big for Israel. Therefore, unless they are able to export much of their production, manufacturing their products will not be worthwhile. After all, the IDF is not big enough, and it buys plenty of its equipment in the United States to boot.
India is one of the biggest customers of Israel's defense industries. It buys armaments worth $30 billion a year throughout the world, so the potential is huge. That's why the defense industries went into shock this week when Ilana Dayan's investigative TV show "Fact" detailed grave suspicions that Israeli companies pay bribes to win arms-supply contracts in India. Several reports on this matter have also appeared in Haaretz and TheMarker.
The defense industries are worried about two developments. One is internal - that the report will engender criticism at home about their activities in India. The second is external - that the Indians will stop buying arms from Israel until all the suspicions have been investigated. This concern is not groundless: Israel Military Industries was blacklisted in India following a bribery scandal. That's why Israel Aerospace Industries and Rafael Advanced Defense Systems are very worried.
The defense industries claim that the Indian opposition, which is seeking to embarrass the government, is behind the probe against them there, along with Israel-hating Palestinian groups. But the truth is that American and European diplomats are the ones who are putting all possible pressure on Israel to "behave itself." They in turn are being pressured by defense industries in their own countries, which charge that Israel competes against them unfairly, as the Israelis turn a blind eye to the activities of their agents, who, according to sources in India, do pay bribes.
Until a few years ago, bribes were customarily used to move deals along in the developing world. But today, the West considers this unacceptable. The United States passed a law under which a company's CEO found guilty of paying bribes abroad can be jailed for 20 years. The Organization for Economic Cooperation and Development (whose members are the 30 most developed countries in the world) signed a covenant prohibiting the payment of bribes. Israel has also signed this agreement.
The attorney general recently directed the defense industries to examine their contracts abroad to ensure that they meet OECD guidelines. He also ordered the industries not to pay exaggerated commissions (of 10 to 15 percent), because it would then be clear that some of this money was being allocated for bribes.
If the Indian reports are true, the companies themselves should also be interested in stopping the custom of giving bribes, because there is no end to bribery and it has a tendency to destroy the giver as well as the recipient. The Indian agent might bribe senior officials of Israeli companies (and not just senior officials in India) to continue receiving fat contracts. The moment bribes become acceptable, they give rise to cases like that of Rami Dotan, the former head of equipment procurement for the Israel Air Force, who took bribes from American companies.
The Swedish company Ikea recently decided not to open stores in Russia despite the huge and promising market there. Ikea said it would not enter markets where bribes had to be paid. Plain and simple.
Bribery is like a cancer spreading through society and consuming everything good. The moment business in a certain country can only be done by bribery, good, honest manufacturers will never go there, because they have no chance of winning a tender against corrupt competitors. The inevitable outcome is a failing, backward and poor country.
Therefore, if we want to become a member of the OECD, we have no choice but to adopt its rules of conduct. It is just like wanting to become a member of an exclusive club: You understand that you can't show up there in khaki shorts and sandals; you know you have to buy three-piece suits, wear a tie and be very polite. Otherwise they'll throw you out. But you also know that despite the restrictions club membership imposes and the expenses it entails, you will reap substantial benefits, including new business relationships that will make the expenses worthwhile.
The defense industries, which in fact represent Israel, must take OECD regulations upon themselves because bribery knows no boundaries. Even if it starts abroad, in the end it creeps back home. As the Jewish sources say, once the destroyer is let loose, he does not differentiate between the righteous and the evil.
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