Israeli Military Strategy in Turkey
By Ze'ev Shiff
The deal between Israel and Turkey for the overhaul of Turkey's Phantom warplanes to the tune of about $600 million is the biggest yet defense project that Israel has had with a Muslim state. It should not be regarded as a mere economic transaction, but as a major development in the strategic cooperation of Israel with an important state in the Middle East. The deal is only the tip of an iceberg of extensive military cooperation. American defense industries may feel hurt as a result of this deal, but it may be assumed that the White House and the State Department view Israeli-Turkish cooperation and the project positively because of its broad strategic value.
Three neighbors are problematic from the Turkish point of view-Iraq, Iran, and Syria. These are states also hostile to Israel. The Turkish government surely wants to convey the signal that, in the regional balance of forces, it has a strong and stable friend like Israel. Both seek stability in the region and conform with U.S. interest in such stability. Turkey also wants to carry out a modernization of its army and Israel can assist in this endeavor.
One should keep in mind the struggle of both Israel and Turkey against terrorism and Turkey's growing fear of an increase of extremist Islamic terror. Here, too, there is room for cooperation, although Israel does not want to be dragged into the bloody struggle with the Kurdish underground which finds shelter in Syria, as the Turkish intelligence knows. Turkey is an important member of NATO and its army is the second largest in the alliance. However, much of the Turkish military equipment is outdated and requires replacement.
The modernization will cost Turkey some $10 billion in the next several years while Turkey is burdened with bad economic conditions and a large foreign debt. The debt burden has grown because of the loss of revenues from the flow of Iraqi oil through the Turkish pipeline.
It is in Israel's interest to extend relations with Turkey. First the level of diplomatic relations was raised, then a military attaché was sent and a document of understanding was signed defining defense relations between the two states. The military security dialogue continues and this week the director of the Defense Ministry, David Ivri, returned from Turkey. One example of the closer diplomatic relationship is the air-fueling maneuver that was carried out in May 1994 when Turkish planes were refueled by an Israeli plane.
The negotiations on the Phantom agreement continued for a long time. The Turkish air force has six squadrons with 165 Phantom planes. Israel has experience in renovating and transforming this plane into the Kurnas 2000. The overhaul prolongs the operational life of the Phantom by 15 to 20 years. A modern American radar and an advanced computerized aeronautical system were introduced into the Phantom, including an improved electronic combat and navigation system. The capability of the plane to participate in a ground battle has also been improved. U.S. and German companies also competed for the deal in Turkey. In the beginning, Israel took part in the bid of the American radar producer Norden, whose system is installed in the new Israeli Phantoms. But this bid failed. Norden asked for $5 million for each radar system. So as not to lose the deal, Israel, through the Elta Company, proposed to produce a similar radar for only about $3 million and won the bid. Elta has now to prove to the Turks that the performance of its radar is adequate. In August an agreement was signed that included a technical and financial framework for the overhaul of 54 Phantoms, 30 of them to be overhauled in Israel.
As expected, the success of Israeli Aircraft Industries (IAI) angered Norden and other U.S. companies. Norden has accused Israel and Turkey of unfair practices in testimony before the U.S. Congress. The main accusation is against IAI, a former partner of Norden, blamed for giving Turkey misleading information. Norden will ask the U.S. administration to take steps for cancellation of the deal with Israel. Probably Norden will be prepared now to offer lower prices and will turn to circles in Turkey who oppose making any contacts with Israel.
For our part, the problem of the Turkish deal is financial. The Turks demand that payments begin only after two years in the five-year deal. Thus, interim financing is needed by IAI, putting heavy pressure on the company. It owes the banks about $300 million. An ugly struggle has been going on between the company and the banks about this debt. It is little wonder that the banks do not want to finance the deal with Turkey and they are not interested in the strategic importance of the deal.
The finances thus become a matter for the finance minister and the prime minister to act upon. The finance minister has already committed himself to not allow the Phantoms deal to be lost. What also bothers him is how to make sure that, on Jan. 1, 1997, when the IAI wage agreements expire, the company does not collapse financially.