U.S. Aid to Israel Totals $233.7b Over Six Decades

Moshe Arens: Generous assistance reflects common strategic interests and values, rather than lobbying pressure.

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The United States has provided Israel with $233.7 billion in aid ‏(after adjusting for inflation‏) since the state was formed in 1948 through the end of last year, research by TheMarker has found.

In nominal terms, total American aid was $112 billion over the years, according to data that appears on the website of the U.S. Congress.

The impression created is that the partnership between the two countries results from pressure by the pro-Israeli lobby in Washington, which expressed itself particularly strongly in last year’s U.S. elections. But the U.S. government has a clear strategic interest in strong ties with Israel, which is the largest single recipient of American foreign aid, says Moshe Arens, a former foreign minister, defense minister and ambassador to Washington.

“In the world we live in, a partnership of ideals and values takes precedence over common interests,” he says. “As a democratic country, the U.S. has good relations with other democratic countries, which have economic and military importance. In the past, during the Cold War period, Israel sided with the United States and today Israel is the best partner American has in the war on terror.”

Israel received the most aid in the 1970s between the 1973 Yom Kippur War and the 1979 peace agreement with Egypt. For signing the accord with Egypt, Israel received its largest-ever amount of aid for a single ear − some $15.7 billion in grants and loans after adjusting for inflation ‏(it was $4.7 billion at the time‏), which was used to fund the transfer of army bases in the Sinai Peninsula back into Israel.

Other years that saw particularly high levels of American assistance to Israel were in 1974, when the United States helped Israel reestablish its military standing after the losses it suffered in the Yom Kippur War. That year, in inflation-adjusted terms, Israel received $12.4 billion ‏($2.6 billion in nominal terms‏). In 1976, Israel received $9.6 billion ‏($2.3 billion in nominal terms‏).

Value of aid declined

The figures do not include loan guarantees amounting to about $19 billion that Washington has granted Israel in recent years to make it easier for it to borrow overseas. It also doesn’t include the transfer of surplus military equipment to Israel.

The value of the aid has declined as well, both because it is less extensive than in the past and because the Israeli economy has grown. Since 2004, its value has been equal to less than 2% of Israel’s gross domestic product and last year was about 1.2%. This year it is likely to fall slightly due to fiscal pressures in the United States.

The first U.S. aid to Israel arrived in 1949 and was used for such basic purposes as buying food and absorbing Jewish refugees. It began to expand a decade later with the first military aid. It grew gradually from a base of $100 million ‏(in nominal terms‏) in 1949, before taking off after the Yom Kippur War and the signing of the Camp David agreements.

Since then, U.S. aid has been about $3 billion annually, of which $1.8 billion is military assistance with the rest for civilian purposes. In 1998 Benjamin Netanyahu, in his first term as prime minister, led a drive to convert the civilian portion to military aid, totaling $2.5 billion to $3 billion a year.

Some 70% of the aid is designated for Israeli purchases of military equipment from American companies.

‘It’s a gift’

“It’s a gift, but not entirely a gift, because part of it has to be spent in the U.S.,” says Arens. “That has led to a debate and to problems for Israeli industry, which feels discriminated against. [But] to those who claim that aid to Israel makes us reliant on American goodwill, I say that’s simply wrong.”

Arens says that in the 1960s, aid was granted to encourage countries to buy

Prime Minister Benjamin Netanyahu speaks during a joint meeting of Congress at the U.S. Capitol in Washington, D.C., May 24, 2011.Credit: AFP
U.S. aid as a percentage of Israel GDP.

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