Given the political dynamics of the Middle East, it is no surprise that strategic relations between Israel and Turkey stand on fragile ground. Traditionally, both sides have put considerable effort into containing a political crisis before it can hamper relations, especially when it pertains to military cooperation. But despite perhaps the best of diplomatic efforts, certain benchmark developments such as the Hamas leadership's visit to Turkey in 2006 and the more recent incident in Davos between Turkish Prime Minister Recep Tayyip Erdogan and Israeli President Shimon Peres have threatened to severely rattle the foundation of the relationship.
Immediately after the Davos debacle in January, there was no scarcity of critics who judged that Israeli-Turkish relations would be severely bruised from that moment on, and that defense relations would bear the brunt of this latest crisis. However, military cooperation between Turkey and Israel proved to be strong enough to withstand even such political stunts. The strength of Israeli-Turkish defense relations emanates from the fact that both states need each other in regional politics as well as on defense issues. Such reciprocal consensus has meant productive defense industry cooperation between these two critical regional players. Nonetheless, even the best of relations are vulnerable to the ups and downs of regional politics, and Israeli-Turkish defense cooperation is not an exception to the rule.
Politics of Defense Procurement
The rationale of defense procurement demands that weapons systems are selected based on the dual considerations of economic justification and military effectiveness. However, while these two factors may be priorities in the procurement process, ultimately they are not as defining as overriding political realities. Initiation of defense relations is dependent on the existence of a shared outlook between supplier and customer on the world and regional politics. Secondly, the procurement should not jeopardize the customer state's relations with other states. Thirdly, the supplier state should be certain that the technology provided via a weapons deal will not end up in the hands of perceived adversaries of the supplier. Only after meeting these conditions can defense industry cooperation and procurement be consolidated.
The level of the buyer state's dependency on foreign sources determines the leveraging power of supplier states to employ procurement as a tool for political ends and conversely, defines the capacity of the buyer to resist such political demands. If the customer state is dependent mainly on one source, i.e. Turkey's dependence on American hardware, it becomes difficult to resist the supplier's political terms. The buyer can overcome such restrictions by diversifying its weapon systems suppliers. Assuming that other suppliers are not similarly politically motivated, the customer state can use defense procurement as a political tool of its own design under certain circumstances; though the buyer's effectiveness is questionable and differs according to the resilience and needs of the supplier's defense industry. For example, Turkey is still vulnerable to U.S. political demands employed over the sale of weapon systems, though not as much as compared to the Cold War era. In addition, tension between France and Turkey on the "Armenian genocide" and France's open disregard for Turkey's prospects for European Union membership have made French companies virtually nonexistent in Turkish procurement programs, since France's policies have been seen as damaging to Turkey's vital interests. However, Turkish threats to reject French firms from Turkish procurement projects and cutback on the volume of economic relations have not swayed the French position on these issues.
Very few states have seamless political relations. But in order for defense industry cooperation and procurement inclinations to be damaged, there must be serious disagreement over vital national interests that cannot be forsaken. When this is the case, customer states could end up sacrificing military effectiveness and opt for lower quality weapon systems or even go through a major transformation in their defense industry cooperation and procurement practices.

Principles of Turkish Procurement Practices
Turkey's NATO membership is one of the turning points in Turkish defence procurement processes. In the 1920s, the young Republic of Turkey realized that one of the weaknesses of the Ottoman Empire was its dependency on foreign powers for weapon systems. Consequently, the founders of the republic became committed to establishing a national defense industry, a partially successful endeavor as Turkey was able to produce indigenous airplanes. However, NATO membership meant that Turkey would soon become a dump for Western, mostly American, weapon systems. The flow of American weaponry, mostly as military aid, dissuaded Turkish politicians at the time from pursuing the priority of building a national defense industry. Defense firms that had the potential to produce high-tech weaponry were consequently shut down and Turkey became completely dependent on the U.S. for its weapon systems during the Cold War. Initially Turkish decision makers in the 1950s and '60s saw defense cooperation with the U.S. as serving Turkey's interests and did not see any downside to the inflow of American hardware. The associated restraints of such dependency was only understood when Turkey needed to use its military hardware to defend its national interests.
Turkey realized that it had made a grave mistake by shutting down its national defense industry when the U.S. first did not let Turkey use American weapons in a possible intervention in Cyprus, then put an embargo on Turkey after Turkish peace operations in Cyprus in 1974. The U.S. embargo hit the Turkish Armed Forces (TAF) hard as it lacked the national industrial base for the production of spare parts, especially for tanks and aircrafts, and the ability to produce weapon systems.
Second, Turkey realized that procurement of arms from its NATO allies also came with strings attached. For instance, Turkey was not permitted to use European manufactured weapons systems in southeast Anatolia, where Turkey is still battling the PKK terrorist organization. Furthermore, the German government withheld permission to sell Leopard tanks to Turkey until 2005, claiming "human rights abuses" in Turkey as a justification. Such conditions put great strains on the TAF, preventing it from deploying its state of the art weapon systems and forcing it to rely instead on weapons with outdated technology. Turkey's dependence on Western sources meant that it would have no other choice than to get used to being denied access to new weaponry.
The U.S. embargo and conditionality had two major policy implications for Turkey. The first was the emerging consensus in Turkey that it should no longer depend just on its NATO allies for its defense procurement needs and should instead diversify its supplier sources. This actually became easier after the end of the Cold War because Turkey's relations with other suppliers of weapons, namely Russia and Israel, began to improve. Secondly, Turkey realized that it would have to rebuild its national defence industry base. To do this, it started to seek suppliers who would be willing to allow production in Turkey and enable technology transfers. Since the 1980s, these considerations have become the primary principles behind Turkey's procurement practices. A parallel line of thought was that the national defense industry should be profitable, or at least it should break even in an economic sense, in order to survive. Therefore, rising exports increasingly took the center stage as the Turkish defense industry began to flourish.
Putting Israeli-Turkish Defense Industry Relations into Perspective
Although Turkey was the first state to formally recognize the State of Israel in the Middle East, establishment of full diplomatic relations had to wait until 1994 because Turkey was wary of Arab reaction. Nonetheless, diplomatic relations paved the way for military and technical cooperation between Turkey and Israel. Professor Efraim Inbar, Professor in Political Studies at Bar-Ilan University and the Director of its Begin-Sadat (BESA) Center for Strategic Studies, explains three factors that are decisive in Israel-Turkey relations:
1. Both Turkey and Israel share similar strategic perspectives on the Middle East.
2. Turkey's interest in acquiring military technology.
3. Obstacles Turkey still faces in acquiring weapon systems from Europe, because of the Kurdish issue, and the U.S., owing to the influence of the Greek lobby.
That Israel is willing to sell high-tech weapon systems that are compatible with American systems dominant in TAF and tends to agree to arrangements for domestic production in Turkey have strengthened bilateral ties. The reasons behind this are threefold. Firstly, as Prof. Inbar points out, Israel and Turkey lean towards a similar strategic outlook regarding Middle East politics. Secondly, Israel is not apprehensive about their technology ending up in the hands of their perceived adversaries since Turkey is a NATO member and West-oriented. Thirdly, as a senior executive at Israel Aerospace Industries (IAI) and Mr. Yossi Bar at Raphael Advanced Defense Systems explain, Israeli defense firms are dependent on exports to survive. As Prof. Inbar explains, the procurement of IDF is limited because Israel had to buy 80% of its weapons from the United States according to the bilateral agreements. Therefore, putting political obstacles ahead of agreements on weapon transfers would greatly harm Israel's defense exports.
On the other hand, Turkey realizes that Israel is one of the few suppliers of military hardware and technology that could help strengthen its national defense industrial base while saving it from the political arm twisting imposed by European states and the U.S.-all without sacrificing the TAF's military effectiveness. Israel is also aware of this. These factors combined means that when there is a bump in Israeli-Turkish relations, Israel prefers to navigate a settlement and manage relations under the motto "business is business". So despite speculation to the contrary, defense cooperation was not struck a deadly blow after Prime Minister Erdogan stormed off the stage at Davos, or after the flurry of statements from both sides issued by Turkish officials and an Israeli general. Even suspicion circulated by the Turkish media that the procurement of UAVs from IAI would be endangered did not last long. The reaction at Davos catered to the Turkish domestic audience in the run up to the local elections; it did not signal a fundamental about-face in Turkish policies towards Israel nor bilateral defense cooperation.
Although they satisfy Turkish procurement principles, generally meet Turkey's requirements, and have a good track record in terms of winning Turkey's major military contracts, Israeli defense firms are not immune to political power games. In two instances Israeli firms were surprised to lose Turkish procurement projects. The first was the case of the Attack and Reconnaissance Helicopter (ATAK) project, which IAI and Kamov entered with the Kamov Ka-50-2 "Erdogan". Despite that the Ka-50-2 is a better platform and impressed experts during testing when compared to the winner, Agusta Westland's A-129, and IAI-Kamov, as the senior executive explained, offered domestic production with a new helicopter factory based in Turkey, the Ka-50-2 lost the bid. The bidding process lasted for nearly 12 years and finally concluded on March 2007. The main reason for the Turkish decision was apprehension over an American reaction to procuring a weapon platform from the Russian Federation, despite that Israel was a partner in the offer. The second surprise came with the recent Turkish decision to buy Russian made Kornet anti-tank missiles as opposed to Rafael Spike missiles. At the outset, according to Mr. Bar, the Spike missile had the technological advantage, as it is a 4th generation anti-tank missile, whereas the Kornet is 2nd generation, and Spike had won every competition that it entered. However, in this case, the Turkish motivation was to signal to the West that Turkey has other options apart from states that can be considered members of the Western block. Contextually, such a decision was made against the backdrop of improving Turkish-Russian relations. In both cases, Israeli firms were caught in the clutch of politics beyond their control.
Conclusion: The future of relations
At the moment, Israeli-Turkish defense industry cooperation appears to be on track. Turkey is planning to procure high, intermediate and low altitude air defense missiles, which is a major procurement project. According to TAF officers, Rafael's Spyder missile has a greater chance of winning the contract for intermediate and low altitude air defense missiles.
This said, the future of Turkish-Israel relations, and more specifically, defense industry relations, will likely face serious challenges. The appointment of Mr. Ahmet Davutoglu as Turkey's new Minister of Foreign Affairs and the climate of improving relations between Turkey and Arab states, including on defense cooperation, could harm the course of Israeli-Turkish relations. The recent reshuffling of key ministers in the Turkish cabinet in the wake of local election results has stacked the cards in favor of an incoming team with more conservative policy positions and an Islamist viewpoint, certain to have ramifications on both domestic and foreign policy design in the coming term. But the appointment of the former speaker of the parliament, Bulent Arinc - a figure who in the past has been known to be critical of the country's secular system - to the post of deputy prime minister in a bid to win back the support of the Justice and Development Party's core constituency, was without a doubt the most controversial one. Serious shifts in the domestic political configuration in Turkey or Israel could have serious consequences for the future of bilateral defense industry cooperation. But a critical issue, which could tilt relations sharply in either direction involves how the new peace process will evolve. Meaningful progress on a peaceful settlement of the Israeli-Palestinian conflict will translate into stronger ties between Turkey and Israel. Should the peace process collapse, difficult choices will have to be made on both sides. Serious shifts in the domestic political configuration in Turkey or Israel could have serious consequences for the bilateral defense industry cooperation.