Special to the JTA Israeli Firm Seems to Have Edge in International Negotiations to Build Munitions

An Israeli firm appears to have the edge in international negotiations to build a major munitions factory in Ecuador, informed sources disclosed here. The projected factory, now in the planning stages, has interested military contractors in several countries, including the United States. But highly placed U.S. commercial and military circles here said the Israeli firm, not identified, stands to win the contract because Israel is offering a barter-type arrangement.

Under the reported offer, Israel would build the factory and supply experts to run it in exchange for Ecuadorian oil. Such an arrangement appeals to Ecuadorian authorities because of past difficulties in financing the factory, the sources said.

Israel has bought small quantities of Ecuadorian oil in the past from the state-run company CEPE. The Israeli Ambassador here, Itzhak Sheff, said the oil is too expensive for Israel. But he appeared to confirm reports of the barter deal when he observed to a reporter recently that “if we receive a very good price for the factory we can afford to pay more for oil, enough to be able to buy from Ecuador and pay the increased transportation cost. In that case a barter deal is possible,” Sheff said.

He added, however, that “If they (the Ecuadorians) want financing from us we won’t be able to compete with American firms.” The envoy cited Israel’s serious economic difficulties, observing that “If it were not for the dollars sent from the U.S. our economic situation would be now worse than that of Bangladesh.”

ITEMS TO BE PRODUCED

The projected factory would produce among other items, ammunition for the Belgian-manufactured automatic rifle FN-FAL which is the standard-issue NATO rifle and is also used by Ecuador’s armed forces. At a later stage plans call for the production of six million rounds a year of machinegun ammunition for the A-37 Skyhawk planes recently bought from the U.S. for the Ecuadorian Air Force:

Israel has had a strong and lucrative relationship with Ecuadorian military authorities over the years as evidenced by the Israeli weapons currently used by this country’s armed forces. They include the Uzi submachine gun manufactured in Belgium under an Israeli license, a number of “Arava” short-take-off-and-landing planes manufactured by Israel Aircraft Industries and other items. The two countries have also exchanged military personnel. Only last week 14 members of the Guayaquil Naval Academy went to Israel for a week-long seminar and visits with Israeli naval commanders.