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Is Israel a Viable State Without U.S. Aid?

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When Mu‘ti Algarissi moved to Kadim (a settlement in the occupied West Bank) in 1987, his red-roofed house and small garden cost him the equivalent of 5,000 U.S. dollars today.

The Israeli government had already informed the settlers that they could expect compensation from up to 100,000 U.S. dollars, the equivalent cost of an average three-bedroom apartment in Israel. The question is: who financed building 192 settlements in the occupied territories?

Although Israel is an “advanced, industrialised, technologically sophisticated country,” it “receives more U.S. aid per capita annually than the total annual [Gross Domestic Product] per capita of several Arab states.” Total U.S. aid to Israel is approximately one-third of the American foreign-aid budget, even though Israel comprises just .001 percent of the world’s population and already has one of the world’s higher per capita incomes. Indeed, Israel’s G.N.P. is higher than the combined G.N.P. of Egypt, Lebanon, Syria, Jordan, the West Bank and Gaza.

With a per capita income of about $14,000, Israel ranks as the sixteenth wealthiest country in the world; Israelis enjoy a higher per capita income than oil-rich Saudi Arabia and are only slightly less well-off than most Western European countries. In fact, Israel’s 1995 per capita gross domestic product was $15,800. That put it below Britain at $19,500 and Italy at $18,700 and just above Ireland at $15,400 and Spain at $14,300.

Since World War II and soon after the establishment of “Israel” and right after Harry Truman recognised the Jewish state in 1948, the U.S. Congress approved an aid package in the form of $135 million. Until 1973, this aid was made up of military, economic and export-import bank loans.After the 1973 war, the aid to Israel constituted largely of military and economic grants to strengthen the Israeli army. The aid included $12-80 million annual grant used in building Jewish settlements.

Most Americans are not aware how much of their tax revenue their government sends to Israel. For the fiscal year ending in September 30, 1997, the U.S. has given Israel $6.72 billion: $6.194 billion falls under Israel’s foreign aid allotment and $526 million comes from agencies such as the Department of Commerce, the U.S. Information Agency and the Pentagon. The $6.72 billion figure does not include loan guarantees and annual compound interest totaling $3.122 billion the U.S. pays on money borrowed to give to Israel. It does not include the cost to U.S. taxpayers of I.R.S. tax exemptions that donors can claim when they donate money to Israeli charities.

The results “of the short-term thinking behind U.S. policy are tragic,” not just for the “immediate victims” but “eventually [for] Israel itself” and “American interests in the region.” The U.S. is sending enormous amounts of aid to the Middle East, and yet “we are less secure than ever”-both in terms of U.S. interests abroad and for individual Americans. Zunes referred to a “growing and increasing hostility [of] the average Arab toward the United States.” In the long term, said Zunes, “Peace and stability and cooperation with the vast Arab world are far more important for U.S. interests than this alliance with Israel.”

This is not only an issue for those who are working for Palestinian rights, but it also “jeopardises the entire agenda of those of us concerned about human rights, concerned about arms control, concerned about international law.” Zunes sees significant potential in “building a broad-based movement around it.”

The same applies to the president, the secretary of state, and the foreign aid administrator. They all submit a budget that includes aid for Israel, which Congress approves, or increases, but never cuts. But no one in the executive branch mentions that of the few remaining U.S. aid recipients worldwide, all of the others are developing nations which either make their military bases available to the U.S., are key members of international alliances in which the U.S. participates, or have suffered some crippling blow of nature to their abilities to feed their people such as earthquakes, floods or droughts.

The lobby that Israel and its supporters have built in the United States to make all this aid happen, and to ban discussion of it from the national dialogue, goes far beyond A.I.P.A.C., with its $15 million budget, its 150 employees, and its five or six registered lobbyists who manage to visit every member of Congress individually once or twice a year.

A.I.P.A.C., in turn, can draw upon the resources of the Conference of Presidents of Major American Jewish Organisations, a roof group set up solely to coordinate the efforts of some 52 national Jewish organisations on behalf of Israel.

Among them are Hadassah, the Zionist women’s organisation, which organises steady stream of American Jewish visitors to Israel; the American Jewish Congress, which mobilises support for Israel among members of the traditionally left-of-center Jewish mainstream; and the American Jewish Committee, which plays the same role within the growing middle-of-the-road and right-of-center Jewish community. The American Jewish Committee also publishes Commentary, one of the Israel lobby’s principal national publications.

Perhaps the most controversial of these groups is B’nai B’rith’s Anti-Defamation League. Its original highly commendable purpose was to protect the civil rights of American Jews. Over the past generation, however, the A.D.L. has regressed into a conspiratorial and, with a $45 million budget, extremely well-funded hate group.

But that’s not quite all. Receiving its annual foreign aid appropriation during the first month of the fiscal year, instead of in quarterly installments as do other recipients, is just another special privilege Congress has voted for Israel. It enables Israel to invest the money in U.S. Treasury notes. That means that the U.S., which has to borrow the money it gives to Israel, pays interest on the money it has granted to Israel in advance, while at the same time Israel is collecting interest on the money. That interest to Israel from advance payments adds another $1.650 billion to the total, making it $84,854,827,200.That’s the number you should write down for total aid to Israel. And that’s $14,346 each for each man, woman and child in Israel.

It’s worth noting that that figure does not include U.S. government loan guarantees to Israel, of which Israel has drawn $9.8 billion to date. They greatly reduce the interest rate the Israeli government pays on commercial loans, and they place additional burdens on U.S. taxpayers, especially if the Israeli government should default on any of them. But since neither the savings to Israel nor the costs to U.S. taxpayers can be accurately quantified, they are excluded from consideration here.

Further, friends of Israel never tire of saying that Israel has never defaulted on repayment of a U.S. government loan. It would be equally accurate to say Israel has never been required to repay a U.S. government loan. The truth of the matter is complex, and designed to be so by those who seek to conceal it from the U.S. taxpayer.

Most U.S. loans to Israel are forgiven, and many were made with the explicit understanding that they would be forgiven before Israel was required to repay them. By disguising as loans what in fact were grants, cooperating members of Congress exempted Israel from the U.S. oversight that would have accompanied grants. On other loans, Israel was expected to pay the interest and eventually to begin repaying the principal. But the so-called Cranston Amendment, which has been attached by Congress to every foreign aid appropriation since 1983, provides that economic aid to Israel will never dip below the amount Israel is required to pay on its outstanding loans. In short, whether U.S. aid is extended as grants or loans to Israel, it never returns to the Treasury.

Israel enjoys other privileges. While most countries receiving U.S. military aid funds are expected to use them for U.S. arms, ammunition and training, Israel can spend part of these funds on weapons made by Israeli manufacturers. Also, when it spends its U.S. military aid money on U.S. products, Israel frequently requires the U.S. vendor to buy components or materials from Israeli manufacturers. Thus, though Israeli politicians say that their own manufacturers and exporters are making them progressively less dependent upon U.S. aid, in fact those Israeli manufacturers and exporters are heavily subsidised by U.S. aid.

Since 1949 (as of November 1, 1997), the U.S. has given Israel a total of $84,854,827,200. The interest costs borne by U.S. tax payers on behalf of Israel are $49.936,680,000, thus making the total amount of aid given to Israel since 1949  $134,791,507,200. According to Steve Cohen, a Jewish lawyer and activist, the amount could exceed 178 billion dollars. This means that the U.S. government has given more federal aid to the average Israeli citizen in a given year than it has given to the average American citizen.

According to Stephen Zunes, “U.S. government officials argue that this money is necessary for “moral” reasons- some even say that Israel is a “democracy battling for its very survival.” If that were the real reason, however, aid should have been highest during Israel’s early years, and would have declined as Israel grew stronger.

Yet “the pattern…has been just the opposite.” According to Zunes, “99 percent of all U.S. aid to Israel took place after the June 1967 war, when Israel found itself more powerful than any combination of Arab armies….”

The real reasons that U.S. supports Israel to serve as “a surrogate for American interests in this vital strategic region” are that “Israel has helped defeat radical nationalist movements” and has been a “testing ground for U.S. made weaponry.” Moreover, the intelligence agencies of both countries have “collaborated,” and “Israel has funneled U.S. arms to third countries that the U.S. [could] not send arms to directly…like South Africa, like the Contras, Guatemala under the military junta...” Zunes cited an Israeli analyst who said: “’It’s like Israel has just become another federal agency when it’s convenient to use and you want something done quietly.”’ Although the strategic relationship between the United States and the Gulf Arab states in the region has been strengthening in recent years, these states “do not have the political stability, the technological sophistication, [or] the number of higher-trained armed forces personnel” as does Israel.

The Israeli paper Yediot Aharonot described Israel as “’the godfather’s messenger’ since [Israel] undertake[s] the ‘dirty work’ of a godfather who ‘always tries to appear to be the owner of some large, respectable business.”’ Israeli satirist B. Michael refers to U.S. aid this way: “’My master gives me food to eat and I bite those whom he tells me to bite. It’s called strategic cooperation.” ‘To challenge this strategic relationship, one cannot focus solely on the Israeli lobby but must also examine these “broader forces as well.” “Until we tackle this issue head-on,” it will be “very difficult to win” in other areas relating to Palestine.


References:
- Tom Malthaner. “U.S. Aid to Israel: What U.S. Taxpayer Should Know,” Washington Report on Middle East Affairs (W.R.M.E.A.).
- Richard H. Curtiss. “The Cost of Israel to U.S. Taxpayers: True Lies About U.S. Aid to Israel,” Washington Report on Middle East Affairs (W.R.M.E.A.).
- Stephen Zunes.”THE STRATEGIC FUNCTIONS OF U.S. AID TO ISRAEL,” Washington Report on Middle East Affairs (W.R.M.E.A.).
- Stephen Zune. “U.S. Aid to Israel: Interpreting the ‘Strategic Relationship,”’ Washington Report on Middle East Affairs (W.R.M.E.A.).

 

Saadeh Khalil -

Dr. Saadeh A. Khalil [Sa‘aadah ’Kaleel] has a Ph.D. in education for Oregon University, USA.Read More >>

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Last Updated on Saturday, 23 December 2006 15:10  

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