If Israel’s Finance Ministry ultimately has its way, the famed Merkava
Mk. 4 tank may soon be a thing of the past. For the moment, the government has
given the Merkava a temporary stay of execution, deciding in late November that
it would continue to fund the tank program into the 2004 fiscal year. But the
rate of production probably will be reduced and the program cut back or killed
in the coming years. The current fleet has 3,900 tanks.
Strong, eleventh-hour lobbying by military and industry leaders has kept the
program on life support. But many observers believe that new austerity measures
adopted by the government may soon force reluctant ministers to once again revisit
Seeking to bridge an ever-widening budget gap, Benjamin Netanyahu, Israeli’s
current minister of finance, is targeting the Merkava, a program which many
believe is too costly and wasteful given the nation’s other more pressing
Many of these same officials also contend that the program is superfluous given
the recent defeat of the Iraqi military by American-led forces and its elimination
as a near-term threat to Israel’s security.
The Merkava is the country’s only indigenously produced main battle tank
and represents a formidable part of the defense manufacturing base in Israel.
Israel spends approximately 1 billion NIS ($228 million) a year on tank procurement.
Supporters contend that eliminating all tank production in Israel is not only
shortsighted, but also fiscally irresponsible. They note that both the human
and financial costs of any shut down would be high and should be weighed accordingly.
More importantly, though, the recommendation ignores key strategic considerations
which fall outside of the purview of the Finance Ministry.
Proponents argue that while Israel contemplates a reduction in its ground forces,
the countries it may one day face in battle—Egypt, Iran, Syria and Saudi
Arabia—continue to upgrade their arsenals with ever more modern, lethal
and offensive armor, missile, naval and aircraft platforms.
In a recent interview, Israel’s Defense Minister Shaul Mofaz expressed
concerns over the massive buildup in Egypt’s offensive armament, particularly
its acquisition of state-of-the-art American equipment saying, “We look
with concern at the strengthening of Egypt, and we ask: What is it for? After
all, we have peace with Egypt and I see no country threatening them. A new reality
may develop that in a few years there will be a different leadership in Egypt,
and that could change how they relate to Israel.”
The combined tank forces of Egypt (3,000), Syria (3,700), Lebanon (280), Jordan
(990) and Saudi Arabia (750) stands at roughly 8,720.
In October, the Pentagon approved the sale of 125 additional M1A1 Abrams tank
kits to Egypt along with associated services and upgrades. The move brings to
880 the number of M1s in Cairo’s inventory. The M1 is the U.S. premier
Among the Merkava’s principal advocates is Maj. Gen. Haim Erez (Res.).
During the Yom Kippur War of 1973, his brigade was the first to cross the Suez
Canal in pursuit of the fleeing Egyptian Army. His commander was Ariel Sharon,
now Israel’s Prime Minister. “The Merkava MK.4 provides its crew
with excellent protection and survivability from new threats that have developed
since the 1973 Yom Kippur War, and is essential to sustaining the country’s
qualitative military edge,” said Erez. “If the IDF had had such
a tank in 1973, I estimate that the Armor Corps would have sustained 90 percent
The fate of the Merkava program was the topic of a forum held in Tel Aviv on
November 16 by the Manufacturers Association of Israel. Representatives from
Israel’s major defense companies, former officials of the Ministry of
Defense, Knesset members, retired military officers and experts in strategic
and international relations concluded that cutbacks to the program will have
serious repercussions far beyond ordinary tank production.
The group estimated that more than 220 sub-component suppliers would be immediately
affected by the loss of the program. Many of these would probably be forced
into bankruptcy. Up to 10,000 jobs could be affected, both directly and indirectly,
from a shutdown of the Merkava production line. These would include not only
engineers and scientists, but skilled manufacturing workers. In Israel, technology
spin-offs from the military are responsible for a large portion of the country’s
non-defense commercial exports.
According to the Manufacturers Association, between $200 million and $250 million
in defense annual technology exports can be attributed to the Merkava. This
figure excludes Israel’s contract with Turkey to provide upgrades for
its inventory of M-60 tanks.
It is likely that the reverberations of any government decision to end the
Merkava program will be felt in the United States as well. Nearly 22 percent
of the Merkava’s content is of American origin, including a portion of
its armor plant and its 1,500 hp MTU engine, produced under license by General
Dynamics Land Systems. GDLS is now under contract to manufacture 400 Mk4 engines
at a cost of nearly $200 million.
Should the Merkava program be cancelled, Israel will have no choice but to
pay a contract termination penalty estimated to be around 90 percent of this
amount. Experts believe this may have played a large part in the government’s
decision to reverse its immediate plans to kill the tank.
Long-term consequences also must be considered, said Brig. Gen. Shlomo Pazzy
(Res.), the former Head of Planning in the IDF Logistics Branch, “Today,
Israel is regarded by the United States and its allies as a leader in defense
systems. Kill the Merkava program, and these leading nations will no longer
feel obliged to allow Israel to participate in the co-development of advanced
technology. … Our economic and military survival depends upon our integration
into the world of cutting edge science and engineering.”
Since 1970, Israel has spent more than $6.5 billion in the Merkava. Program
officials point to the fact that advancements in tank electronics, survivability
and battle management systems have been adapted to the requirements of the Israel
Air Force (IAF). Many are now standard features in IAF cockpits.
Meanwhile, many within Israel’s defense establishment have begun to question
the suggestion by some in the Sharon government that Israel consider replacing
the Merkava tank with the M1 Abrams. This, however, is unlikely. The United
States has no intention of restarting M1 production at the Lima Army Tank Plant
in Ohio. And even if it did, the cost of the M1 surely would be more than Israel
could afford. At $8 million to $9 million per copy, the Abrams is far more expensive
by millions of dollars than the Merkava. For a nation looking to reduce its
defense expenditures, a move to purchase the M1 makes little sense.
Moreover, the tank that the United States would most likely offer would be
an export version of the M1. Israel would then have to make additional investments
in technology upgrades to ensure the tank was suited to its requirements. The
M1 tanks sold to Egypt are provided as kits and assembled at a plant outside
of Cairo—a plant built by the United States at a cost of $1 billion. Egypt
manufactures 40 percent of parts and equipment locally.
Alternatively, some have suggested that the United States might offer Israel
M1 tanks straight out of its domestic inventory or used tanks currently in Iraq.
Neither is an attractive option, given the significant improvements that would
have to be made. According to an Israeli armor expert, “the cost would
Though the M1 is a superior main battle tank, its design is better suited to
the kind of open maneuver warfare characteristic of Europe or the broad desert
expanses of the Middle East. Israel requires a tank that performs equally well
in the open desert and the mountainous terrain of the Golan Heights as well
as the dense urban environment of the West Bank and Gaza.
The Merkava was developed by Israel’s foremost tank designer, Maj. Gen
Yisrael Tal (Res.). Drawing upon the lessons of the 1967 and 1973 wars, he devised
a tank with revolutionary characteristics: modular armor, a special mechanical
suspension system allowing for greater maneuverability, a rear door that permits
the transport of infantry into battle, cabin overpressure for enhanced WMD protection,
and a front-mounted engine providing greater survivability to the tank crew.
Since it first came into service with the IDF in the late-1970s, the Merkava
has been produced in several versions. The latest, the Merkava Mk. 4, has a
fully stabilized 120 mm smooth-bore cannon, an advanced fire control system,
a 60 mm mortar launcher, improved ballistic armor and a 1,500 hp engine.
Even if all of these characteristics could be incorporated into an Israeli
version of the M1 tank, many in Israel’s defense community still fear
that acquiring a foreign tank once again will make Israel reliant upon an overseas
supplier for not only the basic platform, but, more importantly, the spare parts.
Israel has a long and unpleasant history with nations who thought little of
using the leverage conferred by military dependency to influence Israel’s
options on and off the battlefield.
It is a view strongly felt by Maj. Gen. Ami Sagis (Res.), the former head of
logistics in the IDF. The Merkava, he notes, “makes an enormous contribution
to Israel’s security [and] is important to Israel’s economy. It
has allowed us to develop a manufacturing capability for weapons and other systems
on a level equal to or greater than the world’s most technologically advanced
Israel can never be sure that, in an emergency, it will be able to obtain an
uninterrupted flow of parts from a foreign source. Indeed, the speed of modern
warfare may make timely delivery all but impossible. As a precaution, the IDF
will have to maintain a large and costly inventory of spares to meet any future
Yet, having a robust domestic industrial base for tank manufacturing can help
to mitigate these concerns. In an emergency, the Israeli companies responsible
for the Merkava would be called upon to meet surge requirements. Their ability
to meet the Army’s logistical demands could spell the difference between
victory and defeat, explains Pazzy. “At least under these circumstances,
we can control what our industries do.”
Critics of the Merkava’s cancellation point to another assumption that
may be guiding the government’s thinking. It could be that Jerusalem is
hoping that if it switches to an American-made tank, the United States would
be willing to assist in financing the difference in the purchase price through
an increase in Israel’s annual foreign aid allotment. It is difficult
to imagine this happening at a time when the U.S. government already is straining
under a growing mountain of war-related debt.
The U.S. decision to provide $9 billion in loan guarantees earlier this year
was intended to assist Israel with its many war-related expenses by lowering
the cost of its commercial borrowing. At the same time, Israel is scheduled
to receive an additional $60 million in military aid in 2005 as part of a negotiated
agreement to end its reliance on Economic Support Fund assistance.
What makes the Merkava affordable is that Israel is able to use a small portion
of its annual foreign aid package to purchase parts in Israel. Known as offshore
procurement, this shekel-denominated assistance helps to strengthen the local
economy. The bulk of the roughly $2.1 billion in military assistance Israel
receives annually from the United States is dollar-denominated and must be spent
in America. Industry experts note that ideally Israel should produce between
60 and 70 tanks per year in order to achieve the optimum economies of scale.
Many in Israel’s military establishment have begun to voice another more
worrisome concern—the fear that U.S. policymakers may come to resent the
fact that America, not Israel, is shouldering an ever-increasing share of the
nation’s defense burden. These are costs that rightfully should be borne
by the Israeli taxpayer, notes one observer. “The U.S. government would
prefer that Israel use its foreign aid to meet its extraordinary defense requirements,
not serve as a substitute for current government spending.”
Israelis closely involved with the U.S.-Israel strategic relationship are fearful
that America, burdened by overseas commitments, may come to see the Jewish state
as a financial and political liability rather than as an important regional
asset. So far, this has not been the case. Israel has been a close ally to the
United States in not only the conflict with Iraq, but in the ongoing war on
terrorism. However, this could change if Israel’s budget cutters are not
mindful of the defense costs they are asking others to shoulder.
There is no question that Israel faces some difficult economic choices in the
months and years ahead. Barring a sudden reversal in its revenue projections,
it will have to reorder its spending priorities. If this means eliminating the
Merkava, a program that for nearly three decades has been central to Israel’s
national defense, then many military experts are wondering if there are any
“red lines” left in the military budget.
At a time of growing Palestinian unrest and increasing regional tension, many
fear that cutbacks of this sort will only signal weakness to Israel’s
enemies leading them to believe, in the end, that war with the Jewish state
remains an option. In the last two decades, the military intelligence available
in both the Arab and Islamic worlds has increased dramatically, making defense
planners acutely aware of even subtle changes in Israel’s defense posture.
The huge qualitative military edge which Israel once enjoyed over its neighbors
has diminished, in the view of some Israeli security experts, to a critical
Defense Minister Shaul Mofaz has raised the alarm over the Finance Ministry’s
proposed cuts to the country’s military budget next year, warning that
they will impair the operational readiness of all branches of the armed forces.
Last November, the Treasury recommended a NIS 7.1 billion ($1.6 billion) cut
in the defense budget at a time when Israel’s General Staff insisted it
could barely absorb NIS 3 billion ($684 million).
Yet, heavy armor has, and is likely to remain, an indispensable part of Israel’s
force structure for the foreseeable future. Supporters of the Merkava note that
even though the U.S. maintained total air superiority over the forces of Saddam
Hussein in both the first and second Iraqi wars, it was the tank, backed by
infantry, that ultimately was responsible for securing the battlefield.
The project manager for the Merkava, Brig. Gen. Zeev Bar-Gil (Res.), laments
the possible demise of the Merkava. “It took Israel over three decades
with investments of several billion shekels in research and development in order
to build and deploy one of the best tanks in the world. The fear is that with one government decision all of this, the skills and technology
that it represents, could be lost overnight. This would cause irreversible damage
(not only) to our defense industries…(but) to our national security as
It is a fear that Bar-Gil, and a growing number of military experts in both
Israel and America now share.
Rand H. Fishbein, Ph.D. is president of Fishbein Associates, Inc., a public
policy consulting firm based in Potomac, Md. His web site is www.fishbeinassociates.com.
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