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Issue #1501      18 May 2011

Israel – living and killing on United States aid

Over the past decade the USA has attempted to promote itself as a mediator in the Middle East conflict and sought to impose a peace process on the region. Yet despite sponsoring initiatives to try to resolve the Palestinian Problem, the US has repeatedly exposed its bias by again and again blocking any criticism off and measures against Israel at the UN. This support of Israeli policies has allowed Israel to continue to defy with impunity long standing UN resolutions that demand Israel withdraw from occupied Palestinian territories, stop the construction of illegal Israeli settlements on conquered Palestinian land and permit the return of Palestinian refugees.

In February this year the US repeated this pattern of talking peace, but shielding Israel from justified censure. On February18, the US vetoed a Security Council resolution condemning all Israeli settlements established since 1967 in the Palestinian territories as illegal. The resolution was co-sponsored by over 120 of the UN’s 192 member states and the other 14 members of the Security Council.

Right from the start, the creation of the state of Israel was a project of the USA. In November 1947 the US used extraordinary diplomatic, political and economic pressure on various countries to support a policy of partitioning Palestine into Jewish and Arab states. The US exerted the most intense force on Haiti, Liberia, the Philippines, China, Ethiopia, Greece and France among others to get them to vote for partition. The United Nations voted on November 29 and the partition plan was approved by 33 votes to 13, with 10 abstentions. The United States was the leading champion of partition, and exerted the full weight of its influence, so that the resolution was passed.

The practical effect of the US policy on Palestine, with the UN’s wealthiest and most powerful member state putting extraordinary pressure on other countries, was to have the Palestinians lose over 60 percent of their country in terms of area, including their only port, Haifa, Bethlehem and their greatest treasure Jerusalem. Following the partition resolution Arab protests and rebellion broke out in Palestine. Due in large part to American policies, the Palestine Arabs, were about to go through their ordeal of exile and dispossession. The Palestinian population were left to face the merciless power of a strong, well-armed military and paramilitary force of the Zionist state.

The reality is that the USA remains Israel’s staunchest ally and the support that Israel receives from the US is not just political and diplomatic, but the US also provides extensive military and economic assistance. In fact the US contributes massive economic and military aid an estimated US$5 billion annually to Israel in various diverse forms.

Direct military and economic foreign aid to Israel is over US$3 billion a year. In addition the US provides Israel with about another US$3 billion in indirect military and economic aid. Israel receives about one third, over 30 percent of the US foreign aid budget. In recent years the amount of economic assistance has decreased and military aid increased. Each year the total level of aid rises, in 2010 US direct aid rose by US$225 million. And Israel was permitted to spend up to 25 percent of the over US$3 billion for military purchases from Israeli manufacturers with the remaining 75 percent to be spent on military hardware made in the US. An innovative way the US helps its own armaments industry.

It is this huge supply of US armaments, technology and finance which plays a vital role in giving Israel the capacity to maintain the occupation of the Palestinian territories, continue to build and expand Israeli settlements on Palestinian land and repress the Palestinian people’s struggle. This assistance also gives Israel the ability to launch military attacks against the Palestinian Resistance in the Palestinian territories, and in Lebanon.

Almost half the official aid to Israel consists of special grants or instantaneously forgiven loans. Military transactions constitute two thirds of this assistance. The economic lifeline between the US and Israel is indispensable in providing at no cash cost the weapons Israel could not buy elsewhere. When it comes to debt servicing these military “sales” Israel can service this debt only in the formal sense that these instalments are paid when due. But in reality these instalments are funded through new US aid supplied each year.

Israel also receives funds through the US Defence Budget. For instance, Israel was provided with over US$I billion in grants since 1986 for joint military projects like the Arrow Missile project. The US also gave further funds for other projects in Israel, including US$53 million for the Boost Phase Intercept program and US$139 million for the Tactical High Energy Laser program.

In addition special consideration is given to Israel in other areas. Discount and dispensation aid is another tier of economic assistance. Some weapons transferred to Israel are deliberately under-invoiced at special discount prices. Also there is extensive support for Israeli universities and research institutions funded by the US Department of Education and other US agencies, which total almost US$100 million per year. The US also helps out with export concessions, as Israel is designated as a “developing country” by the US, despite its high per capita income, which accords Israel reduced or non-existent tariffs on exports to the USA. Consequently, 96 percent of Israel’s US$1 billion exports to the USA enter free of tariffs.

As well there is a more informal type of aid, a network of Jewish fund raising groups in the US send substantial financial donations to Israel. With the exception of Israel Development Bonds, most of these funds are considered charitable donations and are fully tax deductible in the US. The IMF reports such unofficial aid at about $I billion per year.

There are other forms of US aid to Israel that are difficult to track. In 1976 the US Congress created a special financing method, called the Arms Export Control Act, to conceal of some of this aid and to so hinder criticism of the exact amount of assistance given to Israel.

The USA’s backing of Israel is principally due to the US need for a western military outpost in the region. Israel faithfully serves US strategic interests by providing a reliable and useful ally to help the US maintain control of the region and to guard the oil resources and supply lines of the Middle East.

In summary, Israel is the largest recipient of US foreign aid in US history. And US aid to Israel approximates almost one half of Israel’s national income. The huge extent of the military and economic assistance given to Israel makes the state very dependent on US support.

The amount of aid to Israel was relatively small in 1949, but in the late 1960s this assistance increased considerably, climbing to US$2.6 billion in 1974 and growing each year since. From 1949 to 2007, Israel received more than US$156 billion in US aid. This support has made Israel one of the top five arms exporters in the world and the Israeli army the fourth most powerful in the world.

This US aid funds the ongoing illegal occupation of Palestine, the increasing expansion of Israeli settlements and the gross human rights violations against the Palestinian people. If there was ever a case of foreign aid sustaining occupation and oppression and funding invasions and mass killings, then this is it. Israel’s colonial settlement projects in the occupied territories could not be built without this essential US assistance.

So, despite the USA asserting that it wants to mediate to help resolve the Palestine conflict, its huge sponsorship of Israel clearly exposes its deceit and utter hypocrisy on this issue. It is consequently the USA that is the real obstacle to ending the occupation and achieving peace and a just solution to the Palestinian tragedy.  

Next article – Culture & Life – Rebates and Royals

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