TEL AVIV — Israel’s defense exports have soared to a record of $7.47 billion in 2012, making it the world’s sixth largest exporter of arms.
The 30% increase in global arms sales compared with 2011 positions Israel’s total weapons exports behind the U.S., U.K., Russia, China and Germany, and ahead of France and Italy.
“I wouldn’t speculate on our exact position,” said Shmaya Avieli, head of SIBAT, Israel’s defense exports agency, “but I could safely say that we’re well among the top 10 exporters.”
The figures represent the total of defense contracts signed in 2012 by all Israeli defense and security companies.
Countries in Asia continue to be Israeli defense companies’ leading market with 50% of the sales, $3.7 billion, concentrated there. India is the leading customer. Sales to Europe have increased dramatically, $1.6 billion, as the result of a $1 billion offset contract signed with Italy. In return for Israeli procurement of the Aermacchi’sadvanced jet trainer, Italy committed to buy two (IAI)/Gulfstream G550 Special Electronic Missions Aircraft (SEMA) as well as IAI’s optical reconnaissance satellite. In early 2012, Germany also signed a contract to buy additional Rafael Spike anti-tank missiles, totaling several hundred million dollars.
Missile technology and air defense systems represent 25% of Israel’s overseas sales. IAI’s Barak-8 naval air- and missile-defense system continues to generate revenues through an ongoing $1.4 billion contract with India. Israel refused to confirm reports that the long-range naval missile was also sold to Azerbaijan under an estimated $800-900 million contract.
Surprisingly, Israel’s Iron Dome counter-rocket system, which scored remarkable results during recent conflicts between Israel and Gaza, has not translated its combat success into sales.
Despite intensive marketing efforts by Rafael to South Korea and India, neither country has yet selected the system, although the Republic of Korea acquired the Iron Dome’s multi-mission radar (MMR) for rocket detection and warning.
The Iron Dome system was reportedly sold to Singapore, but Israel maintains a veil of secrecy on all defense contracts with the Asian city-state.
The third-largest market for Israel is North America, with $1.19 billion in sales in 2012. Extensive attempt by scores of Israeli companies to seize significant security contracts in Brazil before the upcoming soccer World Cup and Olympics achieved little success. Overall sales to Latin America totaled $604 million.
The area in which Israel is considered a pioneer — UAV technology — constitutes only 3% of the country’s total defense exports. Yet Brig. Gen. Eitan Eshel, head of defense R&D, says, “we are still second only to the U.S. in that field.”
With the local defense market too small to sustain the industries or to maintain reasonable costs for products, Israeli industry directs 75% of its production abroad. Israel is tightening the monitoring of export licenses, but the defense ministry is constantly striving to declassify indigenous technologies and enable their export to reduce costs for the Israel Defense Forces.
The defense ministry also has 22 missions and attaches across the globe working to promote Israeli industries.