Not long ago right-wing Israel backer William Safire wrote in his column in the New York Times that the Palestinians had to recognize that their “100 million-plus [dollars] annual financial support from the European Union had ties to mutual movement” in the Oslo process. [1] On a certain level of abstraction he is correct. Significant international backing, whether financial or political, should imply commensurate adherence to international norms, whether in international human rights law, respect for the sovereignty of neighboring countries, fulfillment of United Nations resolutions or implementation of internationally backed treaties.

But such international norms are not applied to all cases. Perhaps the case most immune to such norms is Israel’s long-standing access to US aid dollars. (Given Israel’s advanced industrial economy one can no longer describe it as financially dependent on that aid.) It is no surprise that Safire did not issue a parallel challenge to the Israeli side, calling on Binyamin Netanyahu, for example, to recognize Tel Aviv’s international obligation to fulfill the terms of the Oslo accords, let alone implement the UN resolutions it refuses even to acknowledge, in return for over $3.5 billion a year in direct US economic and military aid.

In fact, the limits of Washington’s current willingness to discuss the issue were better exemplified in the Times’ lead editorial just a few days later. Commenting on Madeleine Albright”s failed London round of talks with Yasser Arafat and Netanyahu, the newspaper of record deemed her carrot-and-stick approach — dangling a White House summit with President Clinton if the two sides reached agreement on the disputed second Israeli redeployment by May 11 — as “a reasonable course” for US diplomacy. But in case anyone might be considering a challenge to conventional wisdom, the editorialists went on to remind their readers that “it would not be reasonable to go further by suspending some portion of American aid to Israel, an approach privately championed by some American officials.” [2]

The bottom line is that neither the turmoil of post-Gulf war politics in the region, nor the transfer from the allegedly tough-on-Tel Aviv Bush-Baker team to the more overtly pro-Israeli Clinton administration, nor the new configuration of pro-Israeli lobbying that is replacing liberal Jews with the Christian right, nor even the end of the Cold War itself, have altered Washington’s consensus on aid to Israel. With only small fluctuations — in particular a significant increase during Desert Storm — that aid has remained remarkably constant from 1990 to 1998. The same period, of course, was marked by major cuts in foreign policy spending overall and especially in foreign aid allocations everywhere else in the world.

Aside from the amount of aid, other factors remain constant as well. Although all other countries are required to spend their military aid on US defense products, Israel is allowed to spend a significant percentage of its military aid on domestic military production and/or military research. Since 1991, Tel Aviv’s military grants have included language stating that of the $1.8 billion in Foreign Military Sales (FMS) grants (the number has remained constant), $475 million of the package “shall be available only for procurement in Israel of defense articles and defense services, including research and development.” [3]

In a similar development, some US defense contractors providing military equipment to Israel have agreed to purchase components for their Israel-bound material from Israeli companies themselves, thereby funneling additional FMS funds out of the US defense industry’s own coffers. [4] One result of these practices is the sharpened competitive edge of Israel’s homegrown R&D industry In a recent interview focusing on economic development, Netanyahu bragged that “we have a perpetual motion machine, called the defense establishment, that is increasingly high tech and exceptionally sophisticated in the areas of communication, encryption, decoding, lasers, computer simulators and robotics. In this way the curse of maintaining a national defense has turned into an economic blessing. Each year, as thousands of people leave the military for the marketplace, they become part of the growing phenomenon which is Israel’s Silicon Valley. In the last five years, we’ve had over 3,000 startup companies in the high-tech industry, which is more than any other country in the world, except the United States.” [5]

Exceptional benefits are also granted Israel in the unique terms of its $1.2+ billion in economic assistance and $1.8 billion in military aid. Since 1982 for the economic aid and 1990 for the military assistance, funds have been provided in a lump sum at the beginning of each fiscal year. Other countries receive their (far smaller) amounts of aid in quarterly installments. With the full amount immediately reinvested in interest-bearing US Treasury notes, Washington pays an additional $150 million in interest on the military aid alone. [6]

There is, then, a massive disparity between Israel’s minimal financial need, and its access to US largesse. One example of that incongruity was visible in the initial US media responses to India’s recent nuclear testing. Pointing to the 1994 Nuclear Proliferation Prevention Act requiring a cutoff in aid as a result of the nuclear weapons test, analysts noted that New Delhi faces a complete cutoff of US government aid, private loans from American banks, US opposition to IMF and World Bank aid, and more. How much does India, the second most populous country in the world and one facing severe poverty, risk losing in US funds? According to the New York Times, “direct United States assistance to India has not exceeded several hundred million dollars annually in recent years. This year, it included…$51 million in development aid.” [7] Fifty-one million dollars amounts to less than $200 per Indian per year. Similarly, aid to sub-Saharan Africa, the most impoverished region of the world, amounts to less than $1 per person per year.

Washington’s aid to Israel (excluding the $82 billion in annual loan guarantees), on the other hand, amounts to more than $640 per Israeli per year. This is an absurdly high figure, given the relative strength and sophistication of the Israeli economy. Israel is now generally rated the sixteenth wealthiest country in the world. Indeed, whatever the veracity of his claim, it is telling that Netanyahu has taken to boasting that “increasingly, as Israel’s GDP per capita rises — it has now passed the Western European average — Israel will begin to have immigration from the West. It’s already beginning to happen from England. Immigration is a potential from any place in the West where the per capita income is less than Israel’s current $17,000 GDP per capita. As Israel’s growth rate continues, and it will, I expect the day not to be too far off when people in North America will immigrate to Israel for economic reasons. It sounds incredible, it sounds far-fetched, but it’s going to happen. And it’ll take about 12 to 15 years, but if we continue to advance economically through a combination of free-market principles and abundant high technology, we will make Israel one of the richest societies on earth.” [8] Given that US domestic federal spending in recent years has averaged less than $400 per American per year and is still dropping, if he is correct, Netanyahu’s prediction may come true even before 12 to 15 years from now.


[1] New York Times, May 4, 1998.
[2] New York Times, May 6, 1998.
[3] Cited in Shawn L. Twing “A Comprehensive Guide to US Aid to Israel,” Washington Report on Middle East Affairs, April 1996.
[4] Richard Curtiss, “US Aid to Israel: The Subject No One Mentions,” The Link, January 1998.
[5] “Taking Stock in Peace,” Leaders Magazine, April-May-June 1998.
[6] Curtiss, op cit.
[7] Tim Weiner, “Indians Risk Invoking US Law Imposing Big Economic Penalties,” New York Times, May 12, 1998.
[8] “Taking Stock,” op cit.

How to cite this article:

Phyllis Bennis "US Aid to Israel," Middle East Report 207 (Summer 1998).

For 50 years, MERIP has published critical analysis of Middle Eastern politics, history, and social justice not available in other publications. Our articles have debunked pernicious myths, exposed the human costs of war and conflict, and highlighted the suppression of basic human rights. After many years behind a paywall, our content is now open-access and free to anyone, anywhere in the world. Your donation ensures that MERIP can continue to remain an invaluable resource for everyone.


Pin It on Pinterest

Share This