Defense industry of Israel

By the late 1980s, Israel had become one of the world's leading suppliers of arms and security services, producing foreign exchange earnings estimated at US$1.5 billion annually, which represented one-third of the country's industrial exports. Because the defense industry was not subsidized by the government, it was indispensable for major arms manufacturers to develop export markets, which accounted in some cases for as much as 65 percent of total output. Foreign military sales at first consisted primarily of the transfer of surplus and rehabilitated equipment stocks and the administration of training and advisory missions. Particularly after the October 1973 War, however, foreign sales of surplus IDF stocks and weapons systems from newly developed production lines increased dramatically. Rehabilitated tanks and other Soviet equipment captured from Egypt and Syria were among the products marketed abroad. In addition to its economic and trade value, the expansion of the arms industry assured Israel of the availability of a higher production capacity to supply the IDF at wartime levels. It also provided Israel with opportunities to develop common interests with countries with which it did not maintain diplomatic relations and to cultivate politically useful contacts with foreign military leaders.[11]

Initially, most of Israel's arms sales were to Third World countries, but, owing to financial difficulties faced by these clients and to competition from new Third World arms producers such as Brazil and Taiwan, different sales strategies had to be adopted. In part through joint ventures and coproduction, Israel succeeded in breaking into the more lucrative American and West European markets. By the early 1980s, more than fifty countries on five continents had become customers for Israeli military equipment. Among Israel's clients were communist states (China and Romania), Muslim states (Morocco, Turkey, Indonesia, and Malaysia), and so-called pariah states (South Africa and Iran). To some degree, Israel was restricted in its marketing by United States controls over arms transactions involving the transfer of components or technology of United States origin. In one well-publicized case, the United States vetoed the sale of twelve Kfir fighters to Uruguay in 1978. Intimidation of potential buyers by Arab states also presented a problem. Observers believed that Arab pressure played a part in decisions by Austria and Taiwan not to purchase the Kfir and in Brazil's decision not to choose the Gabriel missile for its navy.[11]

The broader issues of Israel's foreign military sales program were decided by a cabinet committee on weapons transfers. Routine applications to sell arms to countries approved by this committee were reviewed by the Defense Sales Office of the Ministry of Defense. The primary concerns were that arms supplied by Israel not fall into the hands of its enemies and that secret design innovations not be compromised. After 1982, however, security restrictions were relaxed to permit export of high technology weapons and electronics.[11]

In the 1980s, South Africa was believed to be one of Israel's principal trade partners. South Africa was known to have acquired 6 Reshef missile boats, more than 100 Gabriel missiles, and radar and communications systems, and to have obtained Israel's assistance in upgrading its British-built Centurion tanks. The South African-manufactured Atlas Cheetah fighter airplane unveiled in 1986 was a copy of the Kfir C-2 produced in collaboration with IAI. Subsequent to the passage of the Comprehensive Anti-Apartheid Act of 1986 in the United States, which mandated a cut-off of military aid to countries selling arms to South Africa, Israel announced that it would not enter into any new arms contracts with Pretoria. Existing contracts, however, which would not be canceled, were reported to be valued at between US$400 and US$800 million.[11]

Military cooperation between Israel and Iran had been extensive since the 1960s, under the shah's regime. After a brief rupture of relations when Ayatollah Sayyid Ruhollah Musavi Khomeini came to power in 1979, cooperation resumed. The Israeli minister of defense in 1982 acknowledged the negotiation of an arrangement worth US$28 million, including spare parts for United States-manufactured airplanes and tanks in the early 1980s. The Israeli motivating factor was the belief that it was to Israel's strategic advantage to help Iran in its war against Iraq, an Arab state bitterly hostile to Israel. Although Israel announced an embargo of arms transactions after disclosure of its involvement in the plan to trade arms for the release of United States hostages in Lebanon, a stricter directive had to be issued in November 1987, following reports that weapons of Israeli origin continued to reach the Iranians.[11]

Prior to the mass severance of diplomatic relations with Israel after the October 1973 War, Israel had actively promoted military collaboration with a number of African countries. Training or advisory missions had been established in at least ten African states. During the 1980s, Israel quietly resumed these activities in several places, most notably Zaire. Israel dispatched teams there to train elite units and to help reorganize and rearm a division deployed in Shaba Province. Israel also equipped and trained Cameroon's presidential guard unit. Limited pilot training programs were extended to Liberia and to Ciskei.[11]

The US and Israel generally are considered allies[14] and thus have many strong ties through defense industry, but there have been notable controversies over the years and at present. These have included the 'Dotan Scandal' of diverted funds, violations of the US ITAR restrictions by selling sensitive equipment and data to China (in particular the Phalcon incident in the 1990s[15]), and the use of guerilla tactics and non-humanitarian force with respect to Palestine.[16] China has continued to make clear its intentions to keep Israel close both in defense and business. This makes the Israel–United States relations tense and uncertain, despite economic benefits to both.[17] In 2020, the US pressured Israel to bar all Chinese components from inclusion in any communications systems, security cameras and control boxes, Wi–Fi systems, and other peripheral items used in computer networks.[18]

Israeli manufactured weapon systems have been allegedly sold to many regimes with controversial human rights records (e.g. Guatemala during the Guatemala Civil War,[19][20] South Africa during Apartheid, El Salvador during the Salvadoran Civil War, Iran during the reign of the Shah, Ethiopia during the Ethiopian Civil War and more recently South Sudan during the South Sudanese Civil War).

IAI Heron, an unmanned aerial vehicle developed by the Malat (UAV) division of Israel Aerospace Industries.

Israel Aerospace Industries or IAI (תע"א) is Israel's prime aerospace and aviation manufacturer, producing aerial systems for both military and civilian usage. It has 16,000 employees as of 2007. IAI is wholly owned by the government of Israel.

Israel is considered to be the leading UAV exporter in the world.[21] According to the Stockholm International Peace Research Institute, Israeli defense companies were behind 41% of all drones exported in 2001-2011.[22]

Rafael Popeye standoff missile

Israel Military Industries Ltd. (IMI), also referred to as Taas (Hebrew: תעש, התעשייה הצבאית), is an Israeli weapons manufacturer. It manufactures firearms, ammunition and military technology mainly for Israeli security forces (especially Israel's army, the Israel Defense Forces or IDF), although its small arms are very popular throughout the world.

In 2005, the "Magen" Small Arms Division of IMI was privatized, and named Israel Weapon Industries (IWI). IWI is part of a group of companies that develops and manufactures a wide array of guns and rifles used by armies and law enforcement agencies around the world.[23]

Rafael Advanced Defense Systems, known as RAFAEL or Rafael, is another large Israeli defense technology company. It was founded as Israel’s National R&D Defense Laboratory for the development of weapons and military technology within the Ministry of Defense; in 2002 it was incorporated as a limited company.[24] Rafael develops and produces weapons, military, and defense technologies for the Israel Defense Forces and for export abroad. All current projects are classified.

• Military equipment of Israel