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Gaza — In the hands of hamas the West Bank on the edge a spy satellite over Iran and Syria war with Hezbollah a hair trigger away a scandal-plagued political class facing a total loss of public faith.
At a glance, things aren’t going well for Israel. But here’s a puzzle: why, in the midst of such chaos and carnage, is the Israeli economy booming like it’s 1999, with a roaring stock market and growth rates nearing China’s?
Thomas Friedman recently offered his theory in the New York Times. Israel “nurtures and rewards individual imagination,” and so its people are constantly spawning ingenious high-tech start-ups no matter what messes their politicians are making.
After perusing class projects by students in engineering and computer science at Ben Gurion University, Friedman made one of his famous fake-sense pronouncements: Israel “had discovered oil.” This oil, apparently, is located in the minds of the nation’s “young innovators.”
Here’s another theory: Israel’s economy isn’t booming despite the political chaos that devours the headlines, but because of it.
After the dot-com bubble burst in 2000, Israel’s economy was devastated, facing its worst year since 1953. Then came 9/11, and suddenly new profit vistas opened up for any company that claimed it could spot terrorists in crowds, seal borders from attack and extract confessions from closed-mouthed prisoners.
Within three years, large parts of Israel’s tech economy had been radically repurposed. Many of the country’s most successful entrepreneurs are using Israel’s status as a fortressed state surrounded by furious enemies as a kind of 24-hour-a-day showroom a living example of how to enjoy relative safety amid constant war.
And the reason Israel is now enjoying supergrowth is that those companies are busily exporting that model to the world.
Discussions of Israel’s military trade usually focus on the flow of weapons into the country: U.S.-made Caterpillar bulldozers used to destroy homes in the West Bank, and British companies supplying parts for F-16s. Overlooked is Israel’s huge and expanding export business. Israel now sends $1.2 billion in “defence” products to the United States, up dramatically from $270 million in 1999.
In 2006, Israel exported $3.4 billion in defence products, well over a billion more than it received in U.S. military aid. That makes Israel the fourth-largest arms dealer in the world, overtaking Britain.
Much of this growth has been in the so-called “homeland security” sector. The key products and services are high-tech fences, unmanned drones, biometric IDs, video and audio surveillance gear, air passenger profiling and prisoner interrogation systems precisely the tools and technologies Israel has used to lock in the occupied territories.
And that is why the chaos in Gaza and the rest of the region doesn’t threaten the bottom line in Tel Aviv, and may actually boost it. Israel has learned to turn endless war into a brand asset, pitching its uprooting, occupation and containment of the Palestinian people as a half-century head start in the “global war on terror.”
It’s no coincidence that the class projects at Ben Gurion that so impressed Friedman have names like Innovative Covariance Matrix For Point Target Detection In Hyperspectral Images and Algorithms For Obstacle Detection And Avoidance.
Thirty homeland security companies were launched in Israel in the past six months alone, thanks in large part to lavish government subsidies that have transformed the Israeli army and the country’s universities into incubators for security and weapons start-ups. These are facts that must be kept in mind in the ongoing debates about whether academic institutions in Israel are legitimate boycott targets.
A few weeks back, the most established of these companies were at the Paris Air Show, the arms industry’s equivalent of Fashion Week. One of the exhibiting Israeli companies was Suspect Detection Systems (SDS), which showcased its Cogito1002, a white, sci-fi-looking security kiosk that asks air travellers to answer a series of computer-generated questions tailored to their country of origin while they hold their hand on a “biofeedback” sensor. The device reads the body’s reactions to the questions, and certain responses flag a passenger as “suspect.”
Like hundreds of other Israeli security start-ups, SDS boasts that it was founded by veterans of Israel’s secret police and that its products were road-tested on Palestinians. Not only has the company tried out the biofeedback terminals at a West Bank checkpoint it claims the “concept is supported and enhanced by knowledge acquired and assimilated from the analysis of thousands of case studies related to suicide bombers in Israel.”
Another star of the Paris Air Show was the Israeli defence giant Elbit, which showcased its Hermes 450 and 900 unmanned air vehicles. As recently as May, according to press reports, Israel used the drones on bombing missions in Gaza.
Cogito1002 terminals are being auditioned at an unnamed U.S. airport and Elbit, one of the companies behind Israel’s “security barrier,” has partnered with Boeing to construct the Department of Homeland Security’s $2.5 billion “virtual” border fence around the U.S.
Since Israel began its policy of sealing off the occupied territories with checkpoints and walls, human rights activists have often compared Gaza and the West Bank to open-air prisons. But in researching the explosion of Israel’s homeland security sector, a topic I explore in greater detail in a forthcoming book (The Shock Doctrine: The Rise Of Disaster Capitalism), it strikes me that they are something else, too: laboratories.
So in a way Friedman is right: Israel has struck oil. But the oil isn’t the imagination of its techie entrepreneurs. The oil is the war on terror. And fear, it turns out, is the ultimate renewable resource.
This column was first published in The Nation (www.thenation.com).
