Israel Now Fifth Largest Arms Dealer

Although its economy, depending on which ranking system you read, is somewhere between the 20th and 25th largest, Israel is proud to announce that it is now the world's fifth largest arms exporter (behind the US, Russia, France, Germany and the UK).

"I estimate that Israeli sales constitute more than 10 per cent of the global arms trade in 2006," Yossi Ben-Hanan, head of the Israeli Ministry of Defence's (MoD's) Defence Export Agency (SIBAT) told Jane's.

"Last year's most significant contract was Israel Aircraft Industries' and India's Defence Research and Development Organisation's (DRDO's) joint development of the Barak 8 shipborne surface-to-air missile, totaling more than USD400 million," he said.

In 2006, India became Israel's primary customer for defence products, with sales amounting to USD1.5 billion. Israeli sales to its second-largest costumer, the US, exceeded USD1 billion for the first time. "Compared with USD300 million sales to the US in 1999, this remarkable growth could be attributed to the increasing number of Israeli companies establishing subsidiaries in the US and partnering with American industries," said Ben-Hanan. "This is also true for the European market, where sales reached USD800 million in 2006."

And Israel isn't content to stop there.

Unlike the European Union, who ended up supportive of US pressure to keep their embargo, Israel intends to begin arms sales to China, whether the US likes it or not.

The Director General of Israel's Ministry of Defence (MoD), Jacob Toren, announced on 1 March that "Israeli companies have resumed defence exports to China".

Toren would not elaborate on the nature of the new contracts, which have been at the heart of a long crisis between Israel and the US.

Toren took office in September 2005 after his predecessor Amos Yaron was forced to resign under pressure from the US Department of Defense (DoD), which accused Yaron of misleading it on the nature of Israeli defence exports to China.

The crisis was resolved in August 2005 when Israel signed a statement of understanding with the US, pledging to restructure its agencies regulating defence exports and to consult the US on any sale that might compromise US interests.

It is unclear whether Toren's remarks were meant to demonstrate Israeli independence or reflect a genuine resumption of defence ties with China. However, he did say: "Companies will come and see us [at the MoD] and we will judge on a case by case basis with or without consultation with the US. We are two independent countries which respect each other's relative interests.”

I can't help but notice that India and China are tow big customers for Iranian oil and gas and think maybe that arms sales are being used by Israel as an instrument of foreign policy in this regard, just as they are used by everyone else. But the really significant part is that Israel is happy to break with US wishes in a way that Europeans aren't in this.

I would suggest that the US respects Israel's interests - going as far as being swayed into proxy wars in the Middle East - far more than Israel respects American interests.