The Iron Dome defense system was the most influential factor in shaping Israel’s latest war in Gaza, protecting Israeli civilians from hundreds of rocket barrages from Gaza. But how much does it cost Israel, and how much does it save?
The system was developed after then Minister of Defense, Amir Peretz, pushed for it in 2006-2007, as a response to rockets being fired at Israeli civilian areas around Gaza. In 2011 the first silo was deployed, with a success rate of 75%. The rate was later improved, and now stands at approximately 90%.
The last round of violence saw a dramatic increase in the number of rockets fired into Israel, which resulted in a higher number of casualties. In the 2014 flare-up, only six Israeli civilians were killed over the course of 49 days, whereas in this round, 11 civilians lost their lives in just nine days.
Although each Iron Dome missile costs considerably more than the cost of the rocket it intercepts, gauging its economic effect is a more complex issue.
The development costs of the system are estimated at 4 billion shekels, with much of the funding coming from Washington D.C. But this has been offset slightly by exports of components of the systems to other countries. Some of these components have been sold in the U.S., Canada, South Korea, Slovakia, the Czech Republic, India and Finland. This has resulted in approximately 2 billion dollars in income to the Israeli government.
Israel has at least 10 silos deployed at the moment, with a collective value of between 600 million and 1 billion dollars. Maintenance is cheap, and most of the additional cost comes from replacing fired missiles.
The Iron Dome’s most obvious benefit is the defense it provides to Israeli citizens, which obviously does not carry a price tag, although the loss of life does carry financial consequences. It also allows for fewer Palestinian casualties by reducing the damage done by Hamas’s rockets. A higher level of threat posed by the rockets would force the IDF to respond far more forcefully.
A single Iron Dome missile costs approximately 60 thousand dollars. The Palestinian organizations shot approximately 3,300 rockets into Israel during the recent fighting, out of an estimated arsenal of 17,000. According to the IDF, 661 of these rockets were intercepted by Iron Dome, or 85% of all missiles shot at residential targets. Using a rough calculation, this would amount to 80 million dollars worth of Iron Dome missiles fired during the fighting.
During the 2014 operation, the Israeli government paid 1.5 billion shekels in compensation to civilians who suffered hits from the rockets, about 150 million of these for direct damages. If the Iron Dome manages to intercept 90% of the rockets fired into Israel, damages would have cost about a billion shekels. According to the Israeli government, damage to Israeli property stands at about 200 million shekels, which would mean that the Iron Dome has saved at least a few hundreds of million shekels.