> A good example of the trade-offs there is that Israel was effectively forced to cancel it's Lavi fighter aircraft program and buy "expensive" F16s instead.
"There is a myth that it was American pressure that led to the cancellation of the Lavi program. Nothing is further from the truth. It was a self-inflicted wound, a shot in the foot."
The reason the program was cancelled was because it was very expensive and there weren't enough potential international buyers of the plane. The unit costs of F16:s were unsurprisingly much lower because they have been mass-produced for decades.
There are a lot of stories around this and I'm not quite sure who to believe. What is clear is that those F16s could be purchased by US aid while the Lavi could not and that the ability of Israel to export the Lavi and compete with the US would be greatly hampered by direct and indirect US influence. I.e. a project that was potential competition to the US defense industry got cancelled and replaced by US funding to purchase the competing US product. That must have been a factor in the decision making, right? I think at any rate the point I was trying to make stands regardless of whose version of the story you want to believe here.
I see that the page I linked only titles Moshe Arens with Haaretz contributor... In fact, he was a minister of the Israeli government for the larger part of the 80's and the Lavi project was something he advocated strongly for. Meaning that if he says that the project wasn't cancelled due to US interference he is probably right.
I know who Moshe Arens is. I agree the story carries some weight but it's not conclusive. Arens has/had his own interests and even ministers do not always get the entire picture. At the time he was a "minister without portfolio" which means he was probably excluded from some of the meetings.
WikiPedia says this:
"On 30 August 1987, Israel's cabinet conducted a decisive vote on whether to continue the development of the Lavi; this development was influenced by considerable lobbying by the U.S., who made several compensatory proposals in exchange for the cancellation" and provides 3 references as support which I didn't pursue in detail though the ynet article is fairly recent and has some interesting tidbids: http://www.ynetnews.com/articles/0,7340,L-4695739,00.html
How can there be doubt that the US aid and influence was a factor? Would the same decision have been made otherwise? Who knows.
I suspected you'd know, but I thought it was good to clarify who Moshe Arens was for other people reading. ;)
The article you link is interesting, and it mentions a special tax that would be levied on the populace to continue funding the project. Which gives you a hint about how expensive it was! It also mentions that the US didn't like the project. But if US pressure was factor, then why was the project started in the first place? Recall that in 1987 the project was over 10 years old.
Fact is that Israel does a lot of things that the US does not like, like building settlements, but it has never used the military aid as a means to put pressure on Israel. So sure, the US could theoretically exert influence by threatening to stop the aid, but it hasn't done so and probably won't. It would be too much like slaughtering a holy cow for them.
The Lavi story isn't unique. Half a dozen countries have tried to build fighter planes but then cancelled the programs because they were too expensive. I believe the only countries currently producing modern fighter jets are USA, Russia, France, EU, China and Sweden. And I can tell you that the Swedish fighter jet program has been incredibly close to being cancelled numerous times over the last decades.
Israel had previously designed and manufactured the Kfir ( https://en.wikipedia.org/wiki/IAI_Kfir ) though that design was based on the French Mirage. The Kfir wasn't really that successful though...
See http://www.haaretz.com/opinion/the-lavi-a-dream-aborted-in-m...
"There is a myth that it was American pressure that led to the cancellation of the Lavi program. Nothing is further from the truth. It was a self-inflicted wound, a shot in the foot."
The reason the program was cancelled was because it was very expensive and there weren't enough potential international buyers of the plane. The unit costs of F16:s were unsurprisingly much lower because they have been mass-produced for decades.