Tuesday, January 15, 2013

Does Israel Need US Dole?

I admit, economy is not my forte.

But I can read English and this appears quite interesting.  To a certain extent, it follows Ezra Sohar's book, "A Concubine in the Middle East: American-Israeli Relations".

...let’s dispense with the myth that, but for the grace of the U.S. government, Israel could never have survived against its much more populous and better-armed enemies. In the first decades following Israel’s creation in 1948, the U.S was less friend than foe, generally siding with Israel’s Arab neighbours, whom the U.S courted for their oil wealth and to keep them out of the Soviet sphere. The U.S. not only gave Israel little economic and no military aid in the early years — the first military grant wouldn’t come until 1974, a quarter century after Israel’s founding — it refused to even sell arms to help the fledgling state defend itself.  Meanwhile, the U.S. not only sold arms to Israel’s enemies, it also lavished them with economic and military aid through a Marshall-type plan for the Middle East.
Worse, the U.S. used the full force of its diplomacy to undermine Israel’s ability to defend itself. In 1956, after Egypt blockaded shipping into Israel and seized the Suez Canal, an international waterway owned by the U.K. and France, the three countries jointly invaded Egypt to restore their rights...Eisenhower threatened to financially cripple it...Eisenhower threatened Israel with expulsion from the UN, adding gravitas to his demands by making them in a radio and television address to the American people from the White House.
[after the change] from Israel’s perspective the U.S. aid often amounted to compensation, to persuade Israel to act in what would otherwise have been against its own interests.

[after the Yom Kippur War] large military grants were also tied to Israel’s agreement to serve some U.S. geopolitical interest.
In recent decades the...U.S. military aid to Israel has grown to its current $3-billion per year level (Israel now receives no economic aid). But the common view by Israel’s supporters and haters alike that Israel needs a $3-billion handout for its survival is nonsense. Israel has a powerhouse economy — the best performing in the developed world — that could easily absorb a $3-billion hit, which amounts to about 1% of its GDP. When Israel was poor, its military absorbed a whopping one-third of its GDP. As Israel became affluent and its military more efficient over the decades, the cost steadily dropped to 25% of GDP, then 20%, then 10%, then 7.5% and now approximately 6.5% of GDP...
...With Egypt and the Palestinians shorn of U.S. arms, Israel would be able to shrug off much of its defence burden, which today remains more than three times the Western world’s average. Israel’s defence spending would also drop because it wouldn’t be as reliant on expensive U.S. arms — under terms of its military aid agreement with the U.S., about $2.25-billion of the $3-billion must be spent on U.S. arms suppliers, whose merchandise often needs to be retrofitted to meet Israeli needs.
...Israel’s arms industry is one of the world’s largest, it has been thwarted on numerous occasions by the U.S., which blocked Israeli arms sales to China and Russia, and stopped Israel from building military jets that could compete with America’s. A freed Israeli military economy, the single biggest factor in Israel’s phenomenal economic growth, would only propel its economy to new heights.

That sounds logical.

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