Report: U.S. Offers Israel Additional $2 Billion in Loan Guarantees

WASHINGTON, August 6 (IslamOnline & News Agencies) - Since 1992, the U.S. has offered Israel an additional $2 billion in annual loan guarantees, said the Washington Report on Middle East Affairs (WRMEA), published Tuesday, August 6.

According to the report, congressional researchers have disclosed that between 1974 and 1989, $16.4 billion in U.S. military loans were converted to grants and that all past U.S. loans to Israel have eventually been forgiven by Congress.

It added that U.S. policy since 1984 has been that economic assistance to Israel must equal or exceed Israel's annual debt repayment to the United States. Unlike other countries, which receive aid in quarterly installments, aid to Israel since 1982 has been given in a lump sum at the beginning of the fiscal year, leaving the U.S. government to borrow from future revenues, it said.

In addition, there is the more than $1.5 billion in private U.S. funds that go to Israel annually in the form of $1 billion in private tax-deductible donations and $500 million in Israeli bonds, added the report.

The WRMEA said that total U.S. aid to Israel is approximately one-third of the American foreign-aid budget, even though Israel comprises just .001 percent of the world's population and already has one of the world's higher per capita incomes.

Indeed, Israel's GNP is higher than the combined GNP of Egypt, Lebanon, Syria, Jordan, the West Bank and Gaza. With a per capita income of about $14,000, Israel ranks as the sixteenth wealthiest country in the world; Israelis enjoy a higher per capita income than oil-rich Saudi Arabia and are only slightly less well-off than most Western European countries.

USAID, said the report, does not term economic aid to Israel as development assistance, but instead uses the term "economic support funding."

Given Israel's relative prosperity, U.S. aid to Israel is becoming increasingly controversial, said the report.

In 1994, Yossi Beilen, deputy foreign minister of Israel and a Knesset member, told the Women's International Zionist organization, "If our economic situation is better than in many of your countries, how can we go on asking for your charity?"

Most Americans are not aware how much of their tax revenue the U.S. government sends to Israel, the report added.

"The U.S. aid relationship with Israel is unlike any other in the world," said Stephen Zunes, an associate professor of Politics and chair of the Peace and Justice Studies Program at the University of San Francisco.

"In sheer volume, the amount is the most generous foreign aid program ever between any two countries," he added.

Zunes explored the strategic reasoning behind the aid, asserting that it parallels the "needs of American arms exporters" and the role "Israel could play in advancing U.S. strategic interests in the region."

Although Israel is an "advanced, industrialized, technologically sophisticated country," it "receives more U.S. aid per capita annually than the total annual [Gross Domestic Product] per capita of several Arab states," he said.

Approximately a third of the entire U.S. foreign aid budget goes to Israel, "even though Israel comprises just... one-thousandth of the world's total population, and already has one of the world's higher per capita incomes."

The Washington Report on Middle East Affairs is a 140-page magazine published 10 times per year in Washington, DC, that focuses on news and analysis from and about the Middle East and U.S. policy in that region.

The Washington Report is published by the American Educational Trust (AET), a non-profit foundation incorporated in Washington, DC by retired U.S. foreign service officers.

BENEFITS TO ISRAEL OF U.S. AID SINCE 1949 (AS OF NOVEMBER 1, 1997)