In the competition to market weapons internationally, Israel ranks among the world's top exporters.
In 2012, Israeli defense exports soared to a record of $7.47 billion, making it the world's sixth-largest exporter of arms. The 30% increase in global arms sales—compared with 2011 levels—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 Israel's defense exports agency Sibat, “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 the Israeli defense industries' leading market with 50% of sales, or $3.7 billion, concentrated there. India is the leading customer. Sales to Europe have increased dramatically, to $1.6 billion, as the result of a $1 billion offset contract signed with Italy. In return for Israeli procurement of 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 has refused to confirm reports that the long-range naval missile was also sold to Azerbaijan, in a contract estimated at $800-900 million.
Surprisingly, Israel's Iron Dome counter-rocket system, which scored remarkable results during recent conflicts between Israel and Gaza, has not yet translated combat success into sales. Despite intensive marketing efforts by Rafael to South Korea and India, neither country has selected the system, although South Korea did acquire the Iron Dome's multi-mission radar (MMR) for rocket detection and warning. The Iron Dome system has reportedly been 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 the U.S. and Canada, with $1.19 billion sales in 2012. Attempts by scores of Israeli companies to close significant security contracts in Brazil before the upcoming soccer World Cup and Olympics achieved little success. Overall sales to Latin America totaled $604 billion.
The area in which Israel is considered a pioneer—UAV technology—constitutes only 3% of the country's total defense exports. Yet, says Brig. Gen. Eitan Eshel, head of defense research and development, “we are still second only to the U.S. in that field.”
With the local defense market too small to sustain its industries or to maintain reasonable costs for products, Israeli industry sells 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 Force. The defense ministry also has 22 missions across the globe working to promote Israeli industries.
“We were able to increase sales in 2012 despite the global recession,” said Avieli. “Halfway through 2013 we're already at almost $4 billion in sales, so I hope we could repeat the achievement this year, if not even enlarge it.”