We just read an article by Will Blesch titled, “Should Israel do without US financial aid?” which led us to review some of the things we have stated on this subject. The subtitle taking a line from the article start with, “If Israel could manage without US financial aid,” which is a question we have addressed previously always reaching an answer which was a resounding affirmation. For reference, here are just some of our writings from over the years on this subject which include, “Israeli Decision Refusing US Iron Dome Aid a Great Start” from August 8, 2013, “Time Come for Divorce of Israel and United States?” from May 22, 2014, “I Worry for Israel and Her Future” from June 14, 2017, and “America Can be a Fickle Friend” from September 21, 2018. Should people read these articles they will notice that our position has steadily been for Israel to wean herself from the reliance on American largess, otherwise known as aid. We understand that the aid which the United States provides the Israeli militarily comes with some heavy ropes attached, not just a few strings here and there. First, anything the United States underwrites becomes technology which the United States will benefit in its adoption if it is deemed desirable. Second, almost all military aid monies are required to be spent on procuring American arms made in the United States even should there be Israeli modifications plus the United States retains the right to implement these modifications on their own versions. So, we have no illusions about American aid as it is largely to provide an additional customer for the United States arms manufacturers, predominantly the aircraft manufacturers. It was over aircraft that the entire United States aid began as Israel was about to go into production of the Lavi fighter jet (photo below), a direct challenger to the F-16 built by the United States. The United States decided it was wise to cut down on the number of new fighters going into production and offered Israel such a deal which they could not refuse as it included F-16’s in numbers commensurate to the expected Israeli production of the Lavi plus additional wings of F-15’s to augment the Israeli Air Force. The United States also promised to provide Israel with air superiority into the future forever. Well, we have recently passed forever as Saudi Arabia and Egypt have received or will be receiving F-35’s and currently Turkey will not be receiving them though it had been planned to provide them to Turkey. Still, the numbers between Egypt and Saudi Arabia provide them parity if not superiority over Israel, pilots not included. From this little deal everything mushroomed.
Lavi the Lost Dream
Returning to the original question; Should Israel do without US financial aid? Before answering too quickly and just jumping straight to, “Yes,” perhaps we should answer a more necessary question which should precede this one, Could Israel do without US financial aid? This question will require covering some of the ground from our previous articles and their graphs and other graphics as well. The first item which must be determined is how much aid is the United States aid set at, is it rising or static and if changing, by how much and which way. Well, the truth is revealed in the graph below which also signals some other vital information. The graph below indicates that United States aid to Israel, excepting some resupply years after military engagements, has settled at approximately three billion dollars per year. The graph also makes another reality obvious; the United States has not been the closest ally upon whom Israel has depended for their weaponry since her inception in 1948. Truth be told, after President Harry S. Truman recognized Israel, he then obliged his State Department and the Defense Department and placed an arms embargo on the entirety of the Middle East during the initial war between the six Arab nations, Saudi Arabia, Iraq, Lebanon, Syria, Jordan and Egypt, and Israel which was an Arab initiated war intending to erase the Jewish State. President Eisenhower continued the arms embargo on Israel and acted to force Israel to return the Sinai Peninsula after Egypt initiated hostilities by closing the Straits of Tiran to Israeli shipping as well as the Suez Canal to European shipping. The Israeli action in 1956 was in concert with the British and French who instead of holding up their end of the military engagement to free the shipping lanes, continued to talk to the Egyptians, they claim into a deal without any assist from Israel, despite Israel gaining hold of the eastern banks of the Suez Canal basically forcing Egypt to capitulate. Aid to Israel was first started as a trickle after the Six Day War victory of 1967, which showed the United States that Israel could become a favorable ally in the Middle East due to which President Lyndon Baines Johnson began to provide aid. The acceleration of aid came under President Richard Nixon initially in response to the Yom Kippur War of 1973, after which came the F-16’s along with F-15’s to prevent the manufacture of the Lavi which presented the jump in aid amounts. Since the late 1970’s and early 1980’s, the aid package to Israel has stood steady at around three billion dollars each year.
United States Israel Aid (Military)
Great, that is the aid side of the equation. The other side of the equation is Israeli GDP from which we can ascertain what percentage of GDP the aid represents. Israeli GDP is shown from 1960 through 2016 in the graph below which is in billions of US Dollars. Taking samples, we will start with 1980, in which Israeli GDP was around twenty-seven billion dollars. This would make the United States aid equivalent to approximately eleven percent of GDP. In 1985, Israeli GDP had climbed to forty-one billion dollars making the United States aid to approximately seven and one half percent of GDP. In 1990, Israeli GDP reached sixty billion dollars making the aid approximately five percent of GDP. In 1995, Israeli GDP equaled ninety-three billion dollars reducing the aid to three and one quarter percent of GDP. In 2000, GDP broke one hundred reaching one-hundred-thirty-one billion dollars bringing aid to two and one quarter of GDP. In 2005, GDP reached one-hundred-sixty-two billion dollars making the aid at under two percent of GDP. In 2010 GDP attained two-hundred-twenty-one billion dollars placing aid at just over one and one and one third of GDP. In 2015 Israeli GDP climbed to two-hundred-eighty-five billion dollars again reducing aid to barely over one percent of GDP. In 2017 the GDP was three-hundred-sixteen and a half billion dollars making the aid at just under one percent of GDP. What this long set of calculations depicts clearly is that Israel and the United States need to renegotiate any agreements which under current economic conditions, Israel could have the United States retain the three-billion dollars of aid and free Israel to choose whatever aircraft which she deems to be the best applicable for her needs. For the ensuing few years, it is obvious that Israel will remain with the F-35 JSF as the mainstay of her Air Force as she has already received the first squadrons. Beyond these fifth-generation fighters, Israel may desire to rely on her own industries to produce her sixth-generation fighters and perhaps the United States will purchase their fighters from Israel.
Israeli GDP Billions $
When Israel was younger and dependent upon a mostly agrarian economy, the American aid was irreplaceable and one could make the case that it was actually necessary. The Israel of the 1970’s is now long passed history and she has become a high-tech nation with the GDP to match. Israel may not be in the top twenty nations economically, but when one considers her size and population, her economic picture clearly is vastly improved in the last half of a century. On an even brighter note, the Israeli economy continues to climb though quite a bit slower as one would expect. A nation can only keep up such sweeping improvements while their economy moves from dependent on agriculture and some industrial components into an industrial economy and now an information-based economy. Israel also has an impressive medical research industry, a leading agricultural industry which has provided the world with drip irrigation and crops which are suited to a desert climate and some which use partially desalinated water or treated waste waters. These advances can help numerous nations increase their crop outputs. Israel has also provided advanced medical systems and assisted with crop and irrigation for many remote African communities as well as providing electricity and communication equipment which has connected these remote places with the world and provided Internet access. Israel also has one of the best emergency response teams replete with an entire field hospital which is capable of providing almost any nature of medical aid a nation in distress might require as well as more normal medical assistance such as a maternity ward and others (see video below). Israel has become a nation with a rather diverse economy, especially when considering the small size of Israel, her being approximately the size of New Jersey. (For some maps depicting the size of Israel compared to the United States, India, Australia and Great Britain, go here) Israel recently sent a spacecraft to the Moon, though a rocket failure had it land going far too fast, making her the fourth nation to actually succeed in hitting the moon. The little craft Beresheet made a valiant effort and was a private venture by Israel Aerospace Industries (IAI) and SpaceIL. The two companies have stated their intent to attempt another Moon lander and perhaps the Israeli government might provide some funding.
Israel today is a modern nation and as such should not be dependent, even on the United States, or other countries to provide her defense of her people and her land. Further, Israel is entering a time of undefined dangers and threats some of which are not of her doing. One example is Iran who had threatened and promised that should the United States take any actions against Iran they will decimate Israel. Theirs is not an empty threat as they have organizational control of Hezballah in Lebanon and Syria, Islamic Jihad and Hamas in Gaza, and their own forces consisting of mostly IRGC and al-Quds Force, the first being their terrorist outreach branch of the military equal if not superior to the Iranian national armed forces, and the other a group of fanatical fighters sworn to the capture of Jerusalem (al-Quds) and the destruction of the Zionist entity (Israel). Make no mistake, these Iranian threats are real and should not be cast aside in the belief that Iran would be incapable of fulfilling their threats. According to the GFP Index of Countries, Iran is ranked as the fourteenth in military strength while Israel is ranked sixteenth in military strength with the United States ranked an obvious first in military strength and China considered third with Russia taking second. Interestingly, should Israel attack Iran, Iran has promised to strike Israel and said nothing about striking the United States under either scenario. The reality obviously is that should anybody attack Iran, they will strike Israel and for the most part ignore their actual attacker. We can assure you that this is not comforting for Israelis, but we hold to the Alfred E. Newman philosophy which went beyond just, “What, me worry?” He was often alluded to have added, “Ninety-five-percent of what we worry about never happens and the other five percent happens whether we worry or not, so why worry.” Perhaps this explains why despite all the things threatening Israel, she is still the eleventh happiest nation on the planet. In the end, Israel could and should present the United States with the deal that they cannot refuse, namely, keep your money and let’s be friends and just go along to get along. It would provide a new industry and many well-paying jobs which just might make up for the loss of revenues simply through taxes and increased GDP. Such a deal could make both nations more happy and have less friction as neither will be living off the other nation’s revenues.
Beyond the Cusp
Beyond the Cusp 