‘Star Wars’ May Be Israel’s Manna : It Eyes Big Infusion of R&D; Funds as Key to Remaining Strong

If President Reagan’s Strategic Defense Initiative did not exist, the state of Israel could well have found itself lobbying for the creation of such a program.

The President’s invitation to Israel to participate in SDI, or “Star Wars,” was unanimously accepted by its cabinet several weeks ago, with support from both ends of the political spectrum. The agreement will catapult that small nation into the Space Age and into the technological revolution of the late 20th Century.

The reasons for the agreement are both economic and strategic. In 1984 Israel faced a strategic economic crisis. Inflation was more than 400%. Wages and prices were spiraling out of control, and foreign reserves were at a critical low. For the first time in its history, Israel’s credit standing on the world market was being questioned. Few Israelis would admit it, least of all the political leaders, but a major confrontation with the Arab states in 1984 could well have eroded Israel’s financial situation to the breaking point.

The National Unity Government, under the leadership of Prime Minister Shimon Peres, can be credited with turning the tide. In the last quarter of 1985 the inflation rate dropped to about 12%. A wage and price freeze has been in effect for more than a year, foreign reserves have been used to pay off debt principal and still show a slight increase, and the budget has been slashed by almost $1 billion.

But the security costs of such austerity have been considerable. Israel’s defense ministry has absorbed the heaviest burden. Training hours for pilots and crucial defense personnel have been slashed to the bone. Military officers, like other government employees, have suffered almost a 25% salary cut over the last year, leading to contentious rivalries, early retirementof talented officers and signs of general disenchantment with a military career. Israel can no longer afford to maintain the 600-plane air force that gave it strategic advantage over the last two decades. Plans for production of 300 Lavie aircraft, an indigenous supersonic alternative to foreign weapon systems like the F-16, will likely be scrapped before the year’s end.

Even more serious is the new strategic threat facing Israel, principally from Syria. In 1983 and 1984 the Syrians received 24 SS-21 surface-to-surface ballistic missiles from the Soviet Union.

FROG and SCUD missiles have long been in the arsenals of Syria, Egypt and other Arab countries. But their lack of precision in hitting a specific target, combined with Israel’s ability for massive retaliation against urban and military installations, made their threat minor.

Such is not the case with the SS-21. With its 75-mile range and its precision capability, it is a formidable weapon. It has a cluster-bomb warhead and chemical-warfare potential. The SS-21 could do crippling physical and psychological damage to population centers like Tel Aviv, and could disable key military installations--a factor that Israel cannot ignore, especially when response time is measured in seconds, not minutes.

For Israel, therefore, SDI could be the new “manna,” both for its defense apparatus and for its economic infrastructure. Participation in SDI will bring to Israel:

--The opportunity to team up with the United States and its European allies in the technological effort to create defensive systems against shorter-range tactical ballistic missiles, where none today exist. By itself, Israel lacks the funds to develop defenses against such attacks, and constraints on the nation’s defense budget are certain to accelerate in the coming years. --The chance to share in U.S. research and development money for defense technology, where the government of Israel is no longer in a position to meet the country’s most basic requirements. The infusion of even $50 million to $100 million from SDI subcontracts or teaming relations with U.S. corporations might be small by American standards, but it portends enormous dividends for Israeli high-technology and defense firms, most of which are desperately seeking R&D; funding.

For the United States, the political and economic incentives for involving Israel in SDI are also substantial. Even to Israel’s most ardent supporters, the days of wine and roses on Capitol Hill are coming to an end. In the 1987 fiscal budget, U.S aid to Israel remained fixed at $3 billion--a de facto decrease for the first time since U.S. assistance to Israel began in 1973. A congressional plan to reduce interest obligations on Israel’s $10-billion debt from 12% to 5%, thereby saving it billions of dollars over the next few years, was withdrawn several weeks ago.

If it is the United States’ intention that Israel remain a strategic ally capable of defending itself, the emphasis of our support must shift toward Israel’s economic growth and technological advancement. Thus, whether or not the creation of a total nuclear shield is indeed feasible, the Administration’s commitment of $30 billion to $50 billion to the research-and-development phase of SDI could prove to be one of the main avenues to Israel’s survival--and to regional stability.