Reality check: cutting off American aid to Israel won’t make much difference


5:47 pm - July 24th 2014

by Sunny Hundal    


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If I had a penny for every time someone said this to me on Twitter, I’d have bought myself a min-island in the Bermuda by now.

Yes, the United States supports Israel with military aid every year. It also licenses American companies to sell Israel military equipment every year.

But Israel won’t collapse tomorrow if the US cut off their aid. Let’s just go over the numbers to explain.

The United States gave approximately $3.2 Billion to Israel last year. Here’s the breakdown

That includes a sum of $3.1 billion as military aid.
It provides another $504 million in funding: for Israel’s Iron Dome anti-rocket system ($235 million) and the joint US-Israel missile defense systems David’s Sling ($149.7 million)
And there are a few other systems that amount to around $100m. There’s a breakdown here (PDF)

As a proportion of Israeli spending that used to mean a lot – sometimes as much as a quarter of Israel’s defense budget.

It doesn’t any more, primarily because Israel has had a healthy and growing economy. In 2000, Israel GDP was $124.9 Billion. Last year it was more than double that – $291.3 Billion. In comparison, Egypt has a smaller GDP ($271 BN) even though it has 10x the population (more comparison: India’s GDP: $1.8 Trillion; UK $2.5 TR; USA $16.8 TR).

In other words, US military aid to Israel is now worth merely 1% of its GDP. It’s a bonus, not essential money.

The country is doing so well it has more cash than needs, thanks to the recent discovery of gas reserves. It is discussing setting up a sovereign fund and discussing where to invest that surplus.

In fact, this situation has even led some pro-Israelis to call for the military aid to be cut to Israel, on the basis that Israel would then have to rely even less on its ally. They don’t want Israel to be seen as subservient to US interests and clearly think Israel will do just fine without American money.

The point is, US military aid to Israel has largely become an irrelevant factor in this war or the future. Cutting it off won’t hobble Israel. If America abruptly withdraws it over illegal Israeli action, then it may force a change in behaviour but that is a highly unlikely scenario.

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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Story Filed Under: Blog ,Foreign affairs ,Middle East

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Reader comments


1. Lewis MacKenzie

I think it’s more the signal it would send though, right?


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