I have written before that Israel depends as much on defence exports as on defence imports to maintain its military dominance of the Middle East and its ability to maintain the occupation of Palestinian territories.
In that context the UK cancellation of a few small export permits for arms to Israel is of little consequence compared to the very large sales of Israeli arms and military technology to the United Kingdom and to other NATO countries.
Israel gains a great deal from its arms exports, not just in terms of income and balance of payments. Arms sales, and the research and development cash they generate, are absolutely vital to maintaining the health of its domestic arms industry, and is essential to maintaining its ability to occupy the Palestinian territories and dominate its Arab neighbours militarily.
An unnamed Israeli official, quoted in Defense News stated:
“We rely on our local industry to provide the most advanced and innovative technologies to meet security needs … and these needs cannot be met without extraordinary success in the world market.
For a small and constantly threatened country like Israel, exports are essential for sustaining our industrial base, keeping the IDF strong, and last but not least, for fortifying diplomatic ties through defense trade and security cooperation.” (Source: Defence News 28/3/11 possibly behind paywall)
Israeli arms exports new orders have risen from $3.5 billion in 2005 to $7.4 billion in 2009, a doubling in four years.
Barbara Opall-Rome, writing in Defense News, notes that Israeli officials fear that exports may have peaked, owing to the drawdown of the Israeli and Afghan conflicts, increasing competition in the Indian market, friction with Turkey, and other factors.
Also significant in reducing Israeli arm exports may be the international activist effort to discredit Israel over its occupation of Palestinian territories. Opall-Rome also quotes Israeli Defense Minister Ehud Barak, speaking at Tel Aviv University’s Israeli Institute for National Security Studies as saying:
“This tsunami … is liable to expand from governments to other parts, to companies and to various international fora, with [anti-Israel international] activists achieving their goal of gradually pushing us into a similar corner that marked the beginning of the downward spiral of the former South Africa.” (Defense News 28/3/11 possibly behind paywall).
Quite clearly, Israeli ties to international military alliances, international scientific agreements, universities, etc. are vital to maintaining it high tech defense initiatives. Without these ties, Israel could not maintain its dominance in certain defense spheres, like drones, and surveillance. Without this dominance Israeli exports would fail and its ability to research and develop new arms technology would flag. Forced to rely on arms imports, its attitude of impunity in international relations would wither.