“The defense industry will continue to prosper, because our current strategic situation will continue for a long time. We’ll need a $5 billion-a-year defense industry,” Ministry of Defense director-general Amos Yaron said today at the Institute of Policy and Strategy's annual Herzliya Conference.
Economic Models Israel CEO Yaakov Sheinin said at the conference that the defense industries were one of the biggest catalysts in the Israeli economy. “This industry employs 31,000 workers, and unfortunately, it isn’t exploited at all,” he stated.
”Every dollar in Ministry of Defense orders produces $2.40 in defense exports, which have an added value of 66%. If the economy emerges from the recession with 5% growth in 2004, it will take until 2010 before unemployment falls to 6%. For every public sector worker they want to fire, the private sector wants to fire two,” Sheinin explained.
”The Israeli Defense Forces (IDF) can be made capital intensive. For example, for every Merkava Mark 4 tank manufactured today, the IDF is willing to get rid of two other tanks, which means fewer personnel and lower costs. Many more should be manufactured. Now is the time to produce Merkava tanks, because there’s no alternative,” Sheinin declared.
Elta chairman Moshe Keret said at the conference, “The ongoing growth of the defense industry is providing unique solutions for bolstering the strength of the IDF, and is also an important element in the economy. This sector should therefore be classified as a national infrastructure, and its capacity should be preserved, even in times of crisis and transition.”
According to Keret, the defense industries employ 15% of all industrial workers. He said that exports in these industries had grown in the past decade, and currently totaled $3 billion per year, constituting 70% of total defense industry output.
Published by Globes [online] - www.globes.co.il - on December 17, 2003