U.S. Military Aid To Israel

In July I wrote a small article on the unique relationship between Israel and the U.S. in the trade in arms. There is a deep misunderstanding of that relationship in the media and, in the light of the immediacy of U.S. aid to Israel after the Hamas raid, perhaps I can take the liberty of repeating it.

Israel And U.S. Military Aid

Dr. Gary K. Busch 19/7/23

One of the most enduring fantasies in international relations is the notion that the U.S. is spending billions of dollars in in sending military support to Israel as foreign aid. As a reaction to the rough and brutal military response by Israel to the Palestinians (not to mention Syrians and Iranians) there are many who question the ‘moral stature’ of the U.S. in delivering such aid. Congressional complaints were raised in the U.S. at the recently approved $735m in weapons sales from the U.S. to Israel. Under a security assistance agreement spanning 2019-2028, the US has agreed - subject to congressional approval - to give Israel $3.8bn annually in foreign military financing, most of which it must spend on US-made weapons. That is around 20 percent of Israel's defence budget, and almost three-fifths of US foreign military financing worldwide. But the US also sometimes gives additional funds, on top of its annual contribution. It has given an extra $1.6bn since 2011 for Israel's Iron Dome anti-missile system, with parts that are made in the US. The long list of private US companies involved in supplying Israel with arms includes Lockheed Martin, Boeing; Northrop Grumman, General Dynamics, Ametek, UTC Aerospace, and Raytheon. The market demand for weaponry as a result of the Russian attack on the Ukraine has heightened the demands of the Twitterati to US support of Israel. There were complaints as well in Europe and Asia about supplying weapons to Israel whose IDF uses them its periodic episodes of internal violence. The second-biggest exporter of weapons to Israel is Germany. Germany issued licences for arms sales to Israel worth 1.6 billion euros ($1.93bn) from 2013-2017. The third largest supplier is Italy, which delivered €476m ($581m) worth of arms to Israel in the same period. The United Kingdom and Canada are not far behind.

Critics moan about the power of “the Israeli lobby” in American politics; a common article of faith that is shared by Israel’s loudest critics and most fervent supporters—namely, that U.S. military aid forms the cornerstone of the “special relationship” between the two nations, and that this aid is a gift that powerfully benefits Israel. Cutting off Israel’s D.C. cash pipeline, it’s assumed, would dramatically alter the balance of power in the Middle East: in one scenario by endangering Israel’s security, and in another by forcing its recalcitrant leaders to accept the enlightened proposals of Western policymakers. Cutting off Israel’s D.C. cash pipeline, it’s assumed, would dramatically alter the balance of power in the Middle East: in one scenario by endangering Israel’s security, and in another by forcing its recalcitrant leaders to accept the enlightened proposals of Western policymakers.[i]

What this public outrage about arms supplies to Israel demonstrates is that the public have no idea why Israel is so enmeshed in the trade in arms. The simple reason is that the sophisticated Israeli arms industry, (Raphael, Elbit, IAI and others) is the R&D section of many, if not most, of the world’s weapons system. The formative work on UAVs, targeting systems, airborne radar, cyber systems, and a host of other technologies were discovered, perfected and adapted in Israeli companies and think-tanks. Israeli innovation of aircraft, missiles and the like grew out of necessity and attracted the interest of the international community. Israeli labs may produce and refine the technologies but are in no shape to produce, let alone mass-produce, the weapons in its own small country. Even worse, where would they store the products? It is a dangerous neighbourhood in which they live; far too dangerous to store modern weapons of war.

The large U.S. German, British and Canadian corporations have a long-term deal with Israel. Israel does the research and development of military systems and the US, Germans, British and Canadian manufacturers do the manufacturing, storage and delivery, plus any adaptations for their own theatres of conflict on license from the Israelis. They pay for this with fees for the research and in the products which their joint work produces. A substantial part of the arms sales to Israel of sophisticated machinery and systems is a notional sales deal which involves massive offsets at its heart, reflecting the Israeli contribution and licensing fees from the West to Israel for their R&D work. In fact, Israel ends up sacrificing far more value in return for the nearly $4 billion it annually receives from Washington. That’s because nearly all military aid to Israel—other than loan guarantees, which cost Washington nothing, the U.S. gives Israel no other kind of aid—consists of credits that go directly from the Pentagon to U.S. weapons manufacturers.

To a large extent, this structure allows the US to use the Israeli defence industry as a solid base for the diverting of US funds to the US military-industrial complex. It also provides Congress and the White House with a tool to leverage influence over a key strategic ally. The Israeli military, often ranked as the fourth-most powerful in the world, has become an adjunct to American power in a crucial region in which the U.S. has lost the appetite for projecting military force. Israeli intelligence functions as America’s eyes and ears, not just in the Middle East but in other key strategic theatres like Russia and Central Asia and even parts of Latin America. Controlling access to the output of Israel’s powerful high-tech sector is a strategic advantage for the U.S. that alone is worth many multiples of the credits Israel receives. Meanwhile, the optics of bringing the snarling Israeli attack dog to heel helps credential the U.S. as a global power that plays fair—but must also be feared.[ii] The arrangement with Israel is the biggest bargain on the DoD books.

The President of Israel is visiting Washington this week, amid a period of turmoil inside Israel with the return of Netanyahu to power, propped up in his policies by the Jewish Taliban trying to change the rules on the judiciary and the Settlements. The internal battle inside Israel is reaching a turning point; one which might see the final ouster of Netanyahu. However, Netanyahu has firmly supported this symbiosis of Israeli military technology of the current system and the US is reluctant to tamper with the thought of assisting Netanyahu’s enemies (the Israeli populace). There is an Israeli story which illustrates the dilemma.

At a lavish international reception for leading world politicians a beautiful young lady descended the steps to the party. All the other women gathered around her. They were interested in the lovely ring worn by the lady. It was a large blue brilliant-cut diamond surrounded by a bezel of other diamonds set in a platinum setting. One of the women asked her, “What a fantastic diamond. What is it called?”. She answered, “This is the famous Lipschitz Diamond, 42 carats and deep blue.” The woman replied, “You are very lucky to have such a ring.” The lady replied “Yes, but like many of these famous diamonds there is a curse which goes with it.” The woman asks, “And what is the curse?”. The lady answers “Mr. Lipschitz”.

The diamond represents the Israeli defence industry and its prominent role in the world’s defence arsenal. It is strange that, outside the world’s suppliers of arms and military systems, the key role played by Israeli companies in the worldwide industry, is not understood. What is circulated in the world press after attacks like that against Gaza, are rebukes to the nations of the world for selling sophisticated arms to Israel.

So, in short, the Lipschitz Diamond is crucial to the technical development of the world’s defence industries. Banning arms sales to Israel is self-destructive and foolish. The loss of Netanyahu may make it easier to present a gentler appearance to a vital, deadly and important trade.

[i] Jacob Siegel and Liel Leibovitz, "End U.S. Aid to Israel", Tablet, 16/7/23

[ii] Ibid