U.S. Aid to Israel Since 1948, Mainly Credits, is $2.4 Billion

Israel’s master of finance, Pinhas Sapir, was credited with saying a year ago or so that every Israeli child started life owing foreigners about one thousand American dollars. Today, the Lithuanian-born Finance Minister could say each newly born Israeli’s share has risen to $1,200. Close to half of that–at least $500–is in obligations to the US government.

An independent study by the Jewish Telegraphic Agency shows that Israel’s external debt, shouldered by fewer than three million Israelis, is edging over $3.5 billion. Of that total, more than $1.5 billion–three of every seven dollars–are owed to the US government. Most of this is in direct government loans but some is in guarantees of borrowings from private American financial institutions like the 200 savings and loan associations that made up the loan of $50 million in mid-February to finance Israel’s construction of 11,000 housing units.

About another $1 billion is in Israeli bonds. Virtually all of them are bought by Jews in the non-Communist world. The remainder, approximately another billion, was supplied by international organizations like the World Bank group, foreign governments–mainly West Germany and, to a smaller extent, by Canada, England and others–and by non-governmental investment banks. The highest per capita foreign indebtedness by any country, other than Israel’s $1,200, is less than $300. This means that Israel is burdening itself at the ratio of four dollars per person from borrowings abroad compared to one dollar by the next highest debtor nation.

It also means that foreign governments, private banks and millions of individuals overseas are confident that Israel, although beleaguered by enormous hardships from hostilities and its needs for internal development, is a good credit risk and will repay her debts and the interest on them that she is accumulating at the rate of $2 million every day. Imposing as these figures must be to Americans, they are astronomic to Israelis whose wages average about $3,000 a year.

CLASSIFIED AMOUNT ‘SUBSTANTIAL’

JTA’s study involved Israeli and American government sources. The data included statistics of the US Departments of Defense and Agriculture, the Export-Import Bank, and the State Department’s Agency for International Development (AID) and its predecessor organizations going back to the Marshall Plan period (1949-1952). Since Israel became a nation in 1948, the US government has “obligated” or “authorized” for its credits, loans, loan guarantees and grants totaling $2,400 million.

Grants amount to $441 million, about a fifth of that total. Israel’s repayments on loans and interest aggregated $458 million–a similar fraction. Thus, Israel at present owes us about $1.5 billion, apart from the “classified military credit assistance” during the last 18 months of the Johnson Administration and the first 18 months of the Nixon Presidency. A competent Israeli source described this “classified” amount as “substantial.”

A clue to the “classified” figures is that the credit of $500 million brought about by Democratic Senator Henry M, Jackson’s amendment of 1970 “covered obligations arising” over the two year period from July 1, 1969, through June 30, 1971, according to US sources. But the last full fiscal year under President Johnson remains secret. In the last several years the US government assistance has been overwhelmingly for military procurement. Of the $1,087 million earmarked in the last two years ending next June 30, at least $845 million are in credits for direct military purchases.

Another $50 million is a grant to bolster Israel’s economy as a result of the military strain. The economic side is $192 million. This comprises $103 million in credits for agricultural commodities, $30 million in loans for industrial needs (which may rise to $80 or $90 million if pending negotiations are completed). $50 million in the aforementioned guarantee of loans to finance housing, and slightly more than $9 million in grants for American schools and hospitals in Israel. Amounts in the bills pending in Congress to aid Israel absorb Soviet Jewish emigres are not included in this survey. Authorized aid for Israel in the first Nixon year which ended June 30,1970, totaled less than $64 million.

Regarding “military supply” a footnote on a US data sheet provided JTA said: “US sales supplement Israel’s arms purchases from other countries and Israel’s own growing domestic armaments production. Although details of US arms supply are largely classified, the US did make public in 1968 its intentions to supply 50 F-4 Phantom aircraft during the period covering the end of 1969 and 1970. The US has kept all of its commitments to the government of Israel with respect to the delivery of military equipment.”

NOT A PENNY FOR MILITARY EQUIPMENT

Apart from the three-year period of the classified military credit assistance which is curiously excluded from public data, American government fiscal support authorized for Israel during the Nixon Administration almost equals that of the Truman-Eisenhower-Kennedy-Johnson Administrations combined. Part of this high figure is accountable by inflation of the dollar and part to the prodding and encouragement from both Republicans and Democrats in the Congress–witness the Jackson amendment and the bi-partisan Senate resolutions on Phantoms.

Nevertheless, the fact remains that under President Nixon, the US has authorized $1,151 million for Israel–close to half of all publicly disclosed American aid to Israel in its 23-year history. Preponderantly military, the aid has come partly as a result of the continuing tensions between Israelis and Arabs but, perhaps now, much more importantly in America’s own interests in view of the Soviet penetrations into the Levant as Nixon’s recent Foreign Policy Report clearly implies.

The assistance from previous administrations, however, has been nearly all economic. That came when Israel was building its national foundations and needed food for its immigrants. Thus, between July 1, 1948, (Truman) and June 30, 1969 (last Johnson budget) US economic aid to Israel totaled $1,225 million. Military support (classified data excluded) aggregated below $24 million of which less than $18 million came in 1964-65 when Nasser’s threats alarmed both Jerusalem and Washington.

Until June 30, 1969, loans authorized for Israel totaled $880 million and grants $369 million. In the Nixon period, loans authorized totaled $1,046 million and grants $105 million. It must be stressed that in all the 23 years, Israel has not received a penny in grants for military equipment. Seeking to credit each US Administration with its precise support can be hazardous since the data is based on “net obligations and loan authorizations” and, of course, the secret figures.

When and how much of the budgeted funds actually were made available by the administrations which made the budgets could not be pinpointed. As already indicated, Johnson, for instance, pledged 50 Phantom but many of them were delivered after Nixon’s inauguration and with his approval. It is to be expected that much more will be heard about aid to Israel from both Republicans and Democrats until the first Tuesday after the first Monday next November.