Jan 13 2011
An analyst for a top Jerusalem think tank has concluded that US financial aid is a detriment to the Jewish state, both politically and economically, and should be dropped like a bad habit.
Israel Today—Many Israelis and many supporters of Israel in the US have long argued that while America is clearly Israel’s best friend in the world (not anymore though), Washington uses the $3 billion it provides Israel every year as diplomatic leverage. While Israel is ostensibly receiving necessary financial backing, it is paying for it in political and diplomatic maneuverability.
Yarden Gazit of the Jerusalem Institute for Market Studies says Israel is actually paying a pretty steep financial price for that aid, too.
Gazit’s study noted that the bulk of the US aid to Israel is for defense purposes, and that according to the stipulations of that aid, Israel must spend 75 percent of the money on US-made weapons and defense systems.
The American aid is also part of a bundle that includes military aid to Egypt, Jordan and Saudi Arabia, countries over which Israel must maintain a qualitative military edge. So, the US provides Israel with the funds to keep its military on top, but at the same time constantly upgrades the surrounding Arab armies to make sure Israel must continuously buy new American weapons.
Gazit explained that the money from the US is not enough to cover that expense. For example, “every dollar granted to Egypt requires Israel to spend between 1.6 and 2.1 dollars to maintain the balance of power. As a result, every dollar granted to Israel costs Israel between 1.06 and 1.39 dollars.”
By forcing Israel to buy most of its military equipment in the US, Washington is also saddling the Israeli defense industry with an annual loss of $750 million. And because Israel doesn’t buy the systems made by its own defense industry, that hurts the ability of those Israeli contractors to sell their wares abroad.
Who wants to buy defense systems from a guy that can’t even get his own government to buy them?
All this despite the fact that Israel often produces equal or superior defense systems that cost less than their American counterparts. In light of that, the $3 billion in US aid can almost be seen as a bribe to keep one of the US defense industry’s main competitors out of the market.