Peres Switches Sides, Favors Killing Lavi Project

Two days before a Cabinet deadline for the pivotal vote on Israel’s controversial, multibillion-dollar Lavi jet fighter program, Foreign Minister Shimon Peres has switched sides in the debate and is now leading the fight to kill the project.

The switch could be crucial, for Peres was one of the project’s most loyal supporters. Israeli sources said Peres was influenced by strong U.S. government opposition to the Lavi and by concern that his stand had put him in conflict with almost every other top leader of the centrist Labor Alignment, the political bloc he heads.

Explaining his new position in an interview Thursday with Israel Educational Television, Peres said that sometimes a country’s technological capabilities simply outrun its financial wherewithal.

Later, Peres began a series of meetings with ministers of Prime Minister Yitzhak Shamir’s Likud Bloc, hoping to win some of them over to his proposal for dropping the Lavi as part of a package deal that would include protection for workers who might lose their jobs.

U.S. Research Funds

Under Peres’ proposal, Israel Aircraft Industries, which developed the Lavi, would get $100 million in special U.S. aid money in each of the next two years for new weapons research and development programs. Also, Peres said, Israel will seek a role for Israel Aircraft in future American fighter plane projects such as an improved F-16 or the proposed Advanced Tactical Fighter for the year 2000 and beyond.

After providing virtually all of the $1.5 billion spent on developing the Lavi to date, the Reagan Administration recently urged Israel to kill the program, saying its costs had risen by so much that it no longer makes economic sense. Washington has also offered special aid concessions to help Israel cover the costs of canceling the program.

Despite Peres’ switch, the fate of the fighter was still too close to call Thursday. Two weeks of intensive lobbying by pro- and anti-Lavi forces had made it uncertain how a handful of ministers might vote.

Shamir Remains a Supporter

Shamir, who along with Peres successfully blocked a Cabinet vote on the project when it appeared to be in trouble two weeks ago, remains a Lavi supporter. And even though the ministers at that session set Aug. 29 as a new deadline for a final decision, the prime minister’s spokesman, Avi Pazner, said Thursday that Shamir may postpone it again.

Peres’ shift apparently makes it impossible for proponents of the Lavi to win a majority over to their view. However, a tie vote of the ministers would be tantamount to a go-ahead.

Another proposal still being evaluated would continue with development and production of the Lavi by pumping an additional $150 million a year into the defense budget. The money would come from a combination of increased taxes and government reserves.

First Approved in 1980

The Lavi was first approved in 1980, by the first Likud government of Menachem Begin. It was designed to be the backbone of Israel’s air force, with production to begin in the early 1990s. The project won a Cabinet vote of confidence as recently as two years ago, when Peres was serving as prime minister of the national unity coalition.

Defense Minister Yitzhak Rabin, No. 2 to Peres in the Labor Alignment, noted in a speech at Tel Aviv University on Thursday that he had voted in favor of the Lavi at that time. However, he said, he was then under the impression that defense budget cuts would be of a short-term nature. Now, he said, he knows that the budget will be under pressure “for years to come.”

The Israeli military opposes the Lavi project. It fears that it will consume such a large part of the defense budget that other vital programs will go begging. And Rabin co-sponsored the proposal postponed by the Cabinet two weeks ago to cancel the project. Finance Minister Moshe Nissim was the other co-sponsor.

Rabin lashed out Thursday at critics who say that to cancel the Lavi will spell the death of Israel Aircraft. With the extra $100 million of research and development money, he said, the company will have to cut back by only about 10%.

‘Leaner and Hungrier’

“Just as the Israeli Defense Forces became leaner and hungrier, so must the defense industries,” he said.

Peres, who as a deputy defense minister early in his political career was instrumental in building Israel Aircraft and other key elements of the country’s arms industry, had long argued that the project must be continued for the national good. Peres was apparently taken aback by Washington’s public statement against the Lavi. Also, according to Israeli sources, he was concerned about the possibly adverse political impact of the differences over the Lavi between himself and Rabin, a longtime rival for Labor Alignment leadership.