Israeli Arms Exports Drop Nearly $1 Billion in 2013

Analysts cite exit of U.S.-led forces from Iraq, Afghanistan, competition for drone sales, decreasing defense budgets worldwide.

Israeli defense exports fell by almost $1 billion last year, a very rare decline reflecting declining defense budgets worldwide.

The Defense Ministry’s International Defense Cooperation Agency said exports were $6.54 billion last year, down from $7.4 billion in 2012.

Defense exports are a key industry for Israel; since 2005, they have risen every year except for 2011. On average, Israel exports weapons, technology and expertise worth more than $6 billion annually.

In recent years, Israeli defense firms have worried about a decline in the country’s "superpower" position in drones, after losing a number of large contracts to U.S. rivals.

Most Israeli defense exports last year came in the form of airplane upgrades, software for planes and helicopters, general armaments, drones and radar systems, said the cooperation agency, also known as Sibat.

Israel does not detail which countries it sells military items to, only giving the geographic distribution based on categories as defined by Sibat.

But some information is reported elsewhere. For example, South Korea told the UN Register of Conventional Arms that it bought 67 Spike missiles and four launchers from Israel in 2013. The UN Register receives voluntary reports from countries on imports and exports of conventional weapons.

Asia and Pacific countries remained the main destination for Israeli arms last year, totaling $3.91 billion. For Europe, the amount was $705 million, a big drop from the $1.6 billion the previous year.

The reason was a huge deal with Italy in 2012. That year, Israel bought trainer jets, while Italy bought airborne early warning planes.

Last year, Canada and the United States bought $1.07 billion worth of goods, while the rest of the hemisphere bought $645 million. African countries spent $223 million, twice the number in 2012. This was the highest sum in the past four years, when annual sales were between $70 million and $120 million.

Last year was a complicated one for Israeli defense firms, Sibat said. Defense budgets around the world were cut, and the exit of the U.S.-led forces from Iraq and Afghanistan lowered demand in areas where Israeli is a leader.

This trend has been underway for a few years and has stung defense contractors around the world – but Israel has remained one of the top 10 defense exporters.