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Israeli military exports hit record $7.5B

July 26, 2013 at 12:58 PM   |   Comments

TEL AVIV, Israel, July 26 (UPI) -- Israeli military exports hit a record high of $7.5 billion in 2012, the Defense Ministry says, with foreign sales so far this year totaling around $4 billion.

Some officials cautioned that with the U.S. and European markets in decline because of budget cutbacks in military spending, Israeli defense exports may dip. But the ministry's plan to sell off some of its older aircraft, tanks and naval vessels under a military restructuring program could keep figures high.

The 2012 export total was a big increase over 2011, when military sales amounted to $5.8 billion, but the figure is similar to those in 2009 and 2010, when exports totaled about $7.41 billion in both years.

"The number surprised us, since we're in an era that's a very significant economic challenger," said reserve Brig. Gen. Shemaya Avieli, director of the ministry's Foreign Defense Cooperation and Export Department, known by the Hebrew acronym SIBAT. "Israel is among the world's 10 leading defense exporters, if not the top five, and we aspire to more because of export's support for the economy."

He said despite fears defense exports will decline in 2013, he did not expect them to fall short of the 2011 tally of nearly $6 billion.

Ministry statistics show about 75 percent of Israeli defense production is exported. That translates into 10 percent of the Jewish state's total industrial exports.

SIBAT figures showed 25 percent of military exports in 2012 involved aerial defense systems and missiles. Another 14 percent focused on radar systems, with 10 percent comprising naval systems.

Surprisingly, the sale of unmanned aerial vehicles, a big seller for Israel's high-tech defense industry in recent years, totaled only 3 percent in 2012.

No reason for the slump was given. But state-owned Israel Aerospace Industries, a major UAV manufacturer, is currently believed to be negotiating with partner Dassault Aviation for the sale to France of IAI's Heron TP UAV.

The long-range craft, known as the Eitan -- Hebrew for "strong" -- has a wingspan of 86 feet, as big as a Boeing 737's. It's the Israeli air force's most advanced drone and is capable of reaching Iran.

In Switzerland, IAI's Heron-1 is reported to be neck-and-neck with the Hermes 900, built by another Israeli defense company, Elbit Systems, for a $200 million contract.

But Israel's main UAV manufacturers, IAI, Elbit and Aeronautics Defense Systems, are said to face new regulations on defense exports that could limit foreign sales.

The Globes business daily reported in May that "in view of diplomatic and other sensitivities, the Ministry of Defense has blocked several big UAV deals by Israeli companies" recently.

And there are other difficulties. Israel's defense exports came under scrutiny this month after watchdog State Comptroller Joseph Shapira reported serious flaws in the supervision of military exports by the Defense Ministry's Defense Export Controls Agency following the May tightening of regulation on defense exports.

No details were disclosed on what the flaws may be, but there have been many instances in the past of murky operations involving Israeli arms dealers, overwhelmingly former military men certified by the ministry.

Officials say the Defense Ministry is expected to sell off an as yet unspecified number of early model Lockheed Martin F-16A/B fighter jets and Israeli-built Merkava main battle tanks in the next couple of years, along with mothballed U.S.-built M60A1 Patton tanks, under the armed forces restructuring program aimed at meeting future security challenges.

These are likely to be attractive to Third World militaries. Avieri observed that in 2012 Israel's most lucrative arms market was the Asia and Pacific region where states are preoccupied with building up their military force. Sales for those regions totaled $4 billion.

Sales to Europe totaled $1.64 billion. U.S. arms purchases ran to $1.2 billion.

Brig. Gen. Eitan Eshel, head of research and development at the Defense Ministry's Administration for the Development of Weapons and Technological Infrastructure, known as Mapat, said the United States is considering buying several Israeli systems.

These include the Trophy tank protection system developed by state-owned Rafael Advanced Defense Systems which provides 360-degree protection against missile threats.

Rafael also produces the Iron Dome anti-rocket system, which has racked up an 85 percent kill rate against short-range Palestinian rockets since it was deployed in early 2011. The Americans have expressed some interest in that.

Topics: Iron Dome
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