Israel's defense-related exports in 2017 totalled $9.2 billion, an all-time record and whopping 40 percent increase over 2016 - when defense-related transactions totaled $6.5 billion, said the Defense Ministry’s exports branch Wednesday.
Fifty-eight percent of these exports went to Asia and the Pacific, stemming primarily from the $2 billion defense contract Israel signed with India. Under the agreement, Israel Aerospace Industries will supply India with advanced Barak 8 air defense systems worth $1.6 billion including missiles, launchers, communications devices and command, control and radar systems. Next in line is Europe, which took 21 percent of Israel’s defense exports, followed by North America, Africa and Latin America.
“This continues the upward trend and is a very significant increase this past year,” said export branch head Col. (res.) Mishel Ben-Baruch. “Israel’s defense industries are highly valued, respected and trusted throughout the world, thanks to advanced, high-quality technologies based on unique solutions that have been proven operationally by the Israel Defense Forces.” Ben-Baruch stressed that, “In recent years Israel has been one of the world’s top 10 defense exporters.”
The Defense Ministry believes the increase in sales stems from several international trends, one being is an increase in defense budgets of NATO countries. Ben-Baruch said the defense establishment sees Europe as a significant target for defense transactions, mainly in terms of “border defenses, the consequences of immigration and all aspects of terrorism.”
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Asia has also been a major destination for defense exports in recent years, he said. “This is a global trend, and of course there is competition with other countries, but thanks to the quality and prestige of our systems, we manage to compete in the Asian and European markets.”
Another reason for the increase in sales, defense officials say, is that arms deals have become an important part of Israel’s relations with other countries. For example, a half-billion dollar deal was recently signed between Israel and Croatia for the sale of F-16 aircraft.
"We competed there against giants in the sale of IDF surplus F-16s and we won because of our reliability, transparency, professionalism and quality,” Ben-Baruch said. “It’s not simple to compete with European countries in Europe and win. It's a half-billion-dollar project. This brings about cooperation between various government ministries – such as economy and energy and water. From a security project we end up with additional cooperative ventures.”
Defense officials say that some of the large transactions require the defense industries to set up production lines in the purchasing countries. This is a relatively new process, but often it is a condition for executing the transaction. The purchasing countries do this to acquire know-how, to create employment and to maximize their profits through sales to third countries. Ben-Baruch notes, however, “They do not manufacture for a third party without our approval. We do it in cooperation, and we authorize to whom it can be exported. We do not allow certain technologies to [be exported to] a third party.”
Ben-Baruch added, “There is Defense Ministry supervision and control over the products, the systems, what passes to whom, and of course we sign confidentiality agreements with the countries with which we collaborate.”