Saturday, September 13, 2008

Israel and USA-Business Partners

Some people have claimed that about 8 billion dollars per year are going to Israel. Some people think that the USA has always given Israel billions of dollars without expecting repayment. The United States and Israel are not stupid business partners.

US was giving Israel economic grants, but they ended in 1959. From then till 1984, the U.S. loaned money, which Israel repaid. The USA also had surplus commodities that Israel bought.

Israel began buying arms from the USA in 1962. They didn't receive any grant military assistance until after the 1973 Yom Kippur War. That war caused Israel to be in great debt to finance its economic development and in buying arms.

In 1972 Israel received a $50 million grant of economic assistance. Aid to Israel became grants in 1985. The amount of this economic assistance is about equal to the interest Israel has to repay on loans from earlier years (more than $1 billion annually).

The 1985 decision to become grants was based on Congress's decision that to have a strong Israel was important and war in the Middle East would happen faster without Israel's strong presence. They decided that the U.S. would have to spend more money if Israel was not strong.

In 1989 more than 400,000 Jews from Russia were allowed to emigrate. Actually, it was starting in 1980 when I made aliyah. Israel had to provide these new immigrants, including myself, food, shelter, employment and training such as schooling in Hebrew. The United States helped secure freedom for these Russian Jews. Since 1972, Congress helped with appropriated funds. Israel had figured it would cost them $50 billion. In 1990 US approved $400 million in loan guarantees. Guarantees are not grants. Not one penny of US government funds were transferred to Israel. The US just cosigned loans for Israel that allowed it to get better financing from private American banks. They have no impact on US taxpayers unless Israel were to default on its loans, something that has never happened. One has to remember that much of the money Israel borrows is spent in the United States to purchase American goods.

No US foreign assistance to Israel can be used beyond Israel's pre-1967 borders. Israel adheres strictly to these guidlines and each year give a full, detailed report on the expenditure of all US assistance.

Israel gives the US written assurances that it would not direct or settle Soviet Jews in the territories. According to a 1991 State Department report, only 1.2% of Soviet Jews chose to live there. I met a lot of these Russian Jews. Most were from large cities like Moscow and wanted the advantages of living in large cities because of music and the arts. Many that I knew decided to remain in absorption centers, which were like tiny closets to live in, to be able to find a position in Tel Aviv or Jerusalem. I had gone to Israel to live and to teach English. These Russians that I met were also English teachers in Russia. Sadly, I couldn[t understand them, though they may have thought they were speaking English. They had a lot to learn.

Israel has developed many things that are now being shared with the United States. I hope that Americans can see the value of helping the fledgling state of Israel, the only democracy in the Middle East, if not for moral reasons, at least for monetary ones. The investment has been paying off in many ways.

Reference: Myths and Facts: a concise record of the Arab-Israeli conflict by Mitchell G. Bard and Joel Himelfarb 1992.
Post a Comment