Israel's defense spending on the rise

In mid-August Israeli Prime Minister Benjamin Netanyahu presented the cabinet with his “2030 Security Concept” which would increase the defense budget for the coming years by millions of dollars.

Rafael Advanced Defense Systems’ C-Dome system, a sea-based version of the Iron Dome anti-rocket battery, fires from an Israeli Navy missile ship (photo credit: screenshot)
Rafael Advanced Defense Systems’ C-Dome system, a sea-based version of the Iron Dome anti-rocket battery, fires from an Israeli Navy missile ship
(photo credit: screenshot)
Israel’s defense spending totaled $19.6 billion in 2017, a two billion dollar increase from the previous year, an annual report by international auditing and consulting firm Deloitte found.
Eli Tidhar, head of the defense sector in Deloitte Israel, attributed the growth in spending to several factors, including the recent tensions along Israel’s southern and northern borders.
“The threat level towards Israel due to Iran in Syria and the Palestinians in the Gaza Strip is growing, and this increase of spending is a reflection of that,” he told The Jerusalem Post by phone on Tuesday.
The IDF’s move to the Negev has also contributed to the increase of spending, Tidhar said, explaining that the military’s largest and most ambitious infrastructure project is quite expensive, especially the two additional large scale tech-friendly intelligence and communication bases which are expected to be completed in the Negev in the coming years.
Israel was in 15th place out of 20 countries for defense spending, according to the report.
The US led the pack with spending $606 billion on defense in 2017, followed by China with $226 billion and Russia in third place with $70 billion.
Saudi Arabia took fourth place with $62 billion in 2017, followed by France in fifth with $56 billion in defense spending.
“International demand for defense and military products is increasing in the Middle East,” read the report by Deloitte. “This is resulting in higher defense spending globally… [and] could lead to higher defense spending by Western countries and NATO to counter potential threats and to remain competitive.”
“The growth in defense budgets of the two key countries in the region – the UAE and Saudi Arabia – has declined recently, while Israel’s defense budget grew,” the report continued.
According to Deloitte, Israel’s defense spending totaled $17.8 billion in 2016, putting it in 17th place.
In mid-August, Prime Minister Benjamin Netanyahu presented the cabinet with his “2030 Security Concept,” which would increase the defense budget for the coming years by millions of dollars for military spending.
According to Netanyahu, the target is a defense budget of at least 6% of Israel’s GDP.
In 2016, Israel’s defense spending was 5.8% of the country’s GDP.
Netanyahu said the increased budget would go toward strengthening Israel’s offensive capabilities, including cyber offensive capability, upgrading the country’s missile defense systems, protective measures on the home front and completing security barriers on the borders.
A May report by the Stockholm International Peace Research Institute reported that in 2017 Israel spent 4.7% of its GDP on military spending. That placed it among the 10 countries with the highest military burden in the world, along with seven other Middle Eastern countries.
“Following a peak in Israel’s spending in 2014–15, which coincided with its military operations in Gaza in 2014, Israel’s military expenditure dropped by 13% between 2015 and 2016. While military spending increased by 4.9% to $16.5 billion in 2017 (excluding about $3.1 billion in military aid from the US), this total is well below the levels of spending in 2014 and 2015,” the institute’s report read.
SIBAT, the military exports unit of the Defense Ministry, said in May that military exports by Israel grew by 40% in 2017, bringing in $9.2 billion in contracts and marking the third consecutive year of increased defense exports.
According to SIBAT, in 2017, Israeli companies exported missile systems and aerial defense systems (17% and 3%, respectively), communications systems (9%), observation and optics (8%), UAVs (2%), marine systems (1%), satellites and space (1%).
The largest distribution of Israeli defense exports was in Asia Pacific with 58% followed by Europe with 21%, North America with 14%, Africa with 5% and Latin America at 2%.


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