Procurement: Where Israel Is Preferable to China

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September 15, 2016: Israel has agreed to sell the Central Asian nation of Kazakhstan a manufacturing license for building unarmed surveillance UAVs similar to the one ton American Predator. Kazakhstan is already building other Israeli weapons (artillery and munitions) under license.

Israel has found many eager new customers in Central Asia since the Soviet Union dissolved in 1991. Kazakhstan was one of the first customers mainly because it had oil and was willing to sell some of that oil to Israel. This despite the fact that Kazakhstan is largely Moslem. Kazakhstan wanted Israeli tech in general and help in developing their economy. Kazakhstan was also, like most of the other 14 new nations created from the wreckage of the Soviet Union, technically a democracy but soon became a corrupt oligarchy. Israel was willing to work around all that to get the export orders it needed to survive.

Kazakhstan has been buying from Israel since 1995 even though there were some rough patches. In 2009 a Kazakh deputy defense minister was arrested for taking bribes to facilitate the $190 million sale of Israeli artillery and UAV equipment and technology. At the time arms exports (over $4 billion a year) were an important and segment of the Israeli economy. While the U.S. and India were the largest customers an equally large quantity of exports consists of many small deals to parts of the world (Africa, Latin America and Asia) where bribes are considered a traditional way to close the deal. The Israeli attitude is that the bribes are a cost of doing business or, as the accountants put it, "a sales expense." Israeli prosecutors rarely go after Israelis doing the bribing. But on the other end, the buyer nations sometimes regard these bribes as another form of corruption.

Since 2009 Israeli arms exports have more than doubled and Kazakhstan has remained a steady customer. Russia is already manufacturing Israeli UAVs under license and feels more comfortable with Israel, rather than China, exporting weapons (or anything else) to Central Asia.

 


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