Wednesday, September 17, 2014

Israel shows off its drones at conference in Tel Aviv

Only a few weeks after the recent truce that ended the Gaza war, Israel weapons manufacturers are displaying weapons used in the conflict at their annual Unmanned Systems Conference in Tel Aviv, from Sept. 14th to 19th.

The US Embassy in Tel Aviv is a co-host of the event. The US Embassy website says that "senior officials from commercial and government entities" attend from Europe, Asia, North and South America.
 Among sponsors are Elbit Systems,the largest private Israeli defense contractor. Elbit has over 12,000 employees. Elbit produces the Hermes 450 drone that was probably used for attacks during the Gaza conflict this summer. There are photos of the aircraft operating in Gaza. The company website claims that the Hermes 450 had been fighting terrorism for over a decade and claims that it is the main platform of the Israeli Defense Forces in counter-terrorism operations. The drone is described as a "multi-role tactical high-performance unmanned aircraft system."
The Hermes 450 was one of two drones used by Israel during the 2009 conflict in Gaza. Human Rights Watch estimates that between 48 to 87 Palestinian civilians were killed by drones in that conflict In the recent conflict 2,130 Palestinians were killed but there has been no estimate of how many were killed by drone strikes.
Recent share movement of Elbit can be seen here. Since the conflict started the shares have risen and reached $63.01 after fighting intensified on July 8. The stock is close to its highest level since 2010 and its price-to-earnings ratio is the highest in five years. In spite of growth in export sales, company performance is hurt by the high shekel, which also increases expenses for the firm. William Scholes of Aberdeen Asset Management points out that Elbit's revenues are global and increased income from sales in Israel will not impact global revenue to a great extent. Of six analysts of the stock only one rated it a buy with the other five recommending a hold.
Competition in the global military-industrial complex is quite fierce but with renewed emphasis on the need to fight the Islamic State and increasing involvement by the US military and those of allies globally, military budgets may begin to increase once again.
 The conflicts in Gaza have not only led to the development of drones using cutting-edge technology but also night-vision equipment that is widely exported. This equipment has been field-tested in actual combat conditions. While the Gaza conflict is estimated to have cost the Israeli economy several billion dollars and much more to Gaza itself, it has been a boost to Israel's arms industry according to Barbara Opall-Rome from the US magazine Defense News. She claims that Israel exported about $7 billion in military products annually during the last five-year period. Israel is in the top five of global arms-exporting countries. However, Israel faces limitations on its arms exports. It does not want to arm Arab neighbours. The US insists that it not sell to places such as China and no doubt to Russia. Of course the US is a prime supplier to Arab Gulf States.

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