Israel is paying through the nose for US aid and would better off without it, says a researcher for the Jerusalem Institute for Market Studies (JIMS).American aid to Israel to the tune of $3 billion a year has been maligned by many U.S. conservatives and by the Arab world, but Israel actually loses more than it receives, according to JIMS analyst Yarden Gazit.
“U.S. aid is a net loss for Israel and Israel would be better off without it,” he concluded in his report, released on Wednesday.
Gazit explained that the conditions for the military assistance are designed to help the American military-industrial complex at the expense of the Israeli defense industry.
One condition of the American aid to Israel is that three-quarters of the grant be spent in the United States. “The ‘buy US’ requirement causes Israel to buy defense products at a high price, sometimes even products Israel may not need,” Gazit wrote. He calculated the loss to the Israeli defense industry at $600-750 million per year.
The use of American materials instead of those from Israel also hurts competitiveness in Israel and on the world market, according to JIMS. Not using domestic materials for the IDF “hurts Israeli industry’s reputation on the international market and may cause a loss of sales,” the report added.
JIMS forecasts that if Israel does not forfeit the American aid, it risks losing out on the growing Chinese and Indian market for Israeli products. Those countries will be under pressure to shop in the United States in light of American economic problems and its bloated federal budget.
Gazit also pointed out that Israel is forced spend more than $3 billion a year to retain a qualitative edge over Saudi Arabia, Egypt and Jordan, which also receives massive aid from the United States.
Every dollar granted to Egypt requires Israel to spend between $1.60 and $2.10 to maintain the balance of power, according to JIMS.
though Israeli industry is capable of producing cheaper products, which
better fit the IDF’s demands. JIMS estimates the direct loss faced by
Israeli industry at $600-750 million per year.
2. The Defense Ministry often requires Israeli companies to purchase expensive
raw materials in the US in order to use up available grant money. This raises
the cost of the final products sold by Israeli industry and hurts its
competitiveness in Israel and on the world market.
3. Since the Israeli army purchases so much in the US, some locally produced
4. The industry loses valuable potential contracts because of US-imposed
restrictions on Israeli defense exports.
JIMS forecasts that as a result of the economic crisis in the US and its ever-increasing
budget deficits, along with the rise of new powers such as India and China, which are
interested in Israeli products, the economic and strategic damage of US aid will
increase in the coming years. JIMS recommends that the Israeli government initiate
an end to US government grants.
Chinese Stealth J-XX #2
Don’t be surprised to learn in the future of a close Israeli connection with this planes and technology.
We gave or sold the Chinese our Lavie fighter they call the J-10.