Israel's rapidly expanding pharmaceutical industry produces drugs at a 40% or greater profit margin. The country has a proven capacity, for producing goods that find overseas markets. Were the country left to its own devices its Gross Per Capita Product would be $32,000 and not $16,000, as at present.
Israel unfortunately, is being pushed continuously to accelerate the development and production of defense weaponry. Since its inception, it has been in the throes of a war economy ande since 1948 it has endured a state of war. Never at peace with its neighbors and always under the threat of military or terror attack it always falls short of reaching its true potential.
The need for defense weaponry has always existed. Early in its existence it was dependent for weapons on the USA, France and Britain. Until 1967 France almost exclusively, supplied airplanes. Dependence on foreign suppliers left Israel in dire straits when France refused to supply arms to Israel as "punishment" for its victory against the seven aggressor Arab nations, in the Six Day War in 1967.
In the 20 years after that war, it continued on a course of building its domestic arms industries. A few years later, it proved its abilities when it produced a fighter jet, though its production was discouraged by the US. Rafael, the Arms Development Research Authority, began to develop missiles that were intended to protect Israel, but subsequently found eager takers overseas.
In 2004 and likely in the years that follow Israel will become a major defense supplier. Its Phalcom Early Warning platform, the Arrow Anti-Ballistic Missile System, its smart missiles and electronics along with others should reach a $5.0 billion annual sales level.
The Home Front Security requirements in the United States, have given birth to a rapidly upward moving industry in this country.
Many countries are envious, as Israel continues to receive military orders from Turkey, India and China, all of whom consider Israel as a trusted, quality supplier.
However, the economic margins from defense sales are small. Offsetting transactions are often demanded. Israel's water supply has improved over the past two years, but the Government has explained that its purchase of massive amounts of drinking water from Turkey was connected to defense sales.
Kenneth Galbraith and other economists, have pointed out that war economies are economically counter productive as they divert resources from those sectors of the economy that need the greatest support.
Defense manufacture denies its people of the fruits of productive labor wherein the market and not defense considerations dictate what will be produced. There is no weapons system whose profit margin can match that of the Negev flower or smell as sweet.
Until peace comes to this region we shall write more and more about the sophistication of the weapons industry, though we would prefer reporting about flowers and robots that can automatically pick water melons.
The export sales price for one flower stem grown in Israel's Negev wilderness is five times the cost it takes to grow one. Leora, a young flower farmer assisted by only by a few laborers, produces no fewer than 3,000,000 flowers a year. These include new species of flowers and flower bulbs grown with fresh, brackish and hot water, all under plastic cover. Israel has attracted attention to its flower growing activities as it is the world's leader in flower exports to Europe, according to statistics provided by the Flowers Growers Association. Flower exports gross about $1.5 billion, which is about 30% of all flowers imported by Europe. Leora has been selling flowers to Europe for many years, and though located very far from her markets, she also ships flowers to Boston florists on three-day notice.