The Biggest Israel Aid Deal in History Will Bolster Occupation and the U.S. Defense Industry

A U.S. $38 billion aid package to Israel continues a special relationship of war profiteering.

Max Ajl

U.S. Defense Secretary Ash Carter is greeted by Israeli Prime Minister Benjamin Netanyahu. The U.S. has promised $38 billion in military aid to Israel over the next 10 years. (Carolyn Kaster/Getty Images)

The White House has described the recent $38 bil­lion promised aid pack­age to Israel, appor­tioned each year as $3.3 bil­lion in For­eign Mil­i­tary Financ­ing and $500 mil­lion in mis­sile defense assis­tance over the course of 10 years, as an unshak­able com­mit­ment to Israel’s secu­ri­ty.” A bet­ter descrip­tion would have been the White House’s unshak­able com­mit­ment to Boe­ing and Lock­heed Martin’s quar­ter­ly earnings.

Occupation and expansionary violence created a constant rightward shift in Israeli politics. It also created a perpetual need for increased military spending.

U.S. mil­i­tary assis­tance,” more accu­rate­ly under­stood as a cir­cu­lar flow through which U.S. weapons firms prof­it off the col­o­niza­tion of Pales­tin­ian land and Israeli desta­bi­liza­tion of the sur­round­ing states, is a long-term struc­tur­ing ele­ment of the U.S.-Israel spe­cial relationship.”

Large U.S. mil­i­tary loans start­ed arriv­ing in Israel in 1971, as the Nixon admin­is­tra­tion reject­ed plans for a so-called peace­ful set­tle­ment of the Pales­tine ques­tion and went the path of aid­ing Israel’s deci­sion to armor itself for per­pet­u­al war, the reward to the Israeli mil­i­tary elite for their ham­mer­ing of Egypt and Syr­ia in the 1967 war.

In Novem­ber 1971, the Nixon admin­is­tra­tion signed a qui­et Mem­o­ran­dum of Under­stand­ing (MOU) with Israel to build up its domes­tic indus­tri­al-arms sec­tor through tech­ni­cal and man­u­fac­tur­ing assis­tance. As the New York Times char­ac­ter­ized White House thinking,

Offi­cials said the Admin­is­tra­tion was will­ing to help Israel become less depen­dent on the Unit­ed States for arms for a num­ber of reasons.

To the extent that Israel could build tanks and planes and oth­er advanced weapons, they point out, there would be less occa­sion for out­cry in the Arab world over ship­ment of Unit­ed States arms to Israel.

Grants start­ed to replace loans in 1974. The U.S. gov­ern­ment short­ly after­wards start­ed to per­mit Israel to spend twen­ty-six per­cent of the annu­al mil­i­tary grant on pur­chas­es in Israel — a unique arrange­ment, since by law recip­i­ent coun­tries must spend all of their For­eign Mil­i­tary Financ­ing in the Unit­ed States. The result of this has been the build-up of a large Israeli mil­i­tary indus­try. This indus­try often relies on U.S. tech­no­log­i­cal inputs, and the Unit­ed States for­bids Israel from man­u­fac­tur­ing cru­cial heavy weapon­ry, such as fight­er jets, in order to main­tain con­trol over Israel.

It trusts Israel — a set­tler-colo­nial state — with its own weapons indus­try since the chances of a peo­ples’ revolt amongst the dom­i­nant Jew­ish sec­tor of the Israeli pop­u­la­tion is slim-to-none; the weapons will not be turned against the Israeli elite, let alone the Unit­ed States, as they might one day in Arab coun­tries where revolt is more like­ly. But it trusts the Israeli elite only so far — for that rea­son it main­tains a monop­oly on many of the pro­duc­tion lines the Israeli army needs, in order to main­tain a veto over Israeli for­eign policy.

Fur­ther­more, as the Times sug­gests, pub­lic U.S. mil­i­tary aid can be embar­rass­ing for the Arab states. Sev­er­al of these states have pre­tend­ed to be at war with Israel even while main­tain­ing friend­ly terms with the Unit­ed States, Israel’s main patron. Although this dynam­ic was less of an issue after the Camp David Accords with the Anwar Sadat dic­ta­tor­ship in Egypt in the 70s, the 1994 peace treaty with Jor­dan and increas­ing ties between Israel and the Gulf States, Israel’s colo­nial repres­sion of the Pales­tini­ans con­tin­ues to be an issue for the sur­round­ing Arab pop­u­la­tions. Hence the need for some sub­terfuge as to who’s actu­al­ly build­ing Israel’s weapons, and indeed for the Unit­ed States’ com­mit­ment to the peace process — a shad­ow-play meant main­ly for the con­sump­tion of the Arab pop­u­lar classes.

Ear­li­er U.S. mil­i­tary grants, in the 1970s, often went to sub­sidiaries of U.S. cor­po­ra­tions based in Israel, which devot­ed a sig­nif­i­cant por­tion of its bud­get to devel­op­ing a trained and edu­cat­ed work-force, capa­ble of aid­ing in tech­no­log­i­cal devel­op­ment and work­ing in high­ly-skilled posi­tions in the arms industry.

Lat­er U.S. mil­i­tary grants to Israel were often a quid pro quo, as Israel increas­ing­ly took on the work for which the Unit­ed States could not pub­licly take respon­si­bil­i­ty, giv­en pop­u­lar unease in the States over aid to fas­cist dic­ta­tor­ships. As the Inter­na­tion­al Jew­ish Anti-Zion­ist Net­work note in their well cit­ed report, Israel’s World­wide Role in Repres­sion,

In the 1970s, Israel armed the bru­tal mil­i­tary régime of the Argen­tin­ian Jun­ta that imposed sev­en years of state ter­ror­ism on the pop­u­la­tion, includ­ing the tor­ture and dis­ap­pear­ance” of an esti­mat­ed 22,00030,000 left-wing activists, trade union­ists, stu­dents, jour­nal­ists and oth­er alleged anti-régime civilians.

Of those dead, 10 to 15 per­cent were Jews, while the over­all pop­u­la­tion was just two per­cent Jew­ish. Israel also pro­vid­ed most of the arms that Nicaraguan dic­ta­tor Somoza used in the last year of his dic­ta­tor­ship to oppose the rev­o­lu­tion, a con­flict that killed tens of thou­sands of Nicaraguans. It also trained the Cen­tral Amer­i­can tor­ture states in pop­u­la­tion dis­place­ment. And lat­er, it would cir­cum­vent the 1977 arms ban against apartheid South Africa.

In return for this mer­ce­nary work for the Unit­ed States, a domes­tic elite in Israel grew rich­er, pulling in its cut from the mil­i­tary grants while also prof­it­ing from the per­pet­u­al state of war­fare ensured by the colo­nial occu­pa­tion and Israel’s deci­sion to treat those states across its north­ern armistice lines as ene­mies to be con­trolled and desta­bi­lized rather than neigh­bors with whom to trade and live.

Such con­stant war­fare and mil­i­ta­riza­tion cre­at­ed a cir­cu­lar pat­tern. On the one hand, occu­pa­tion and expan­sion­ary vio­lence, such as the occu­pa­tion of Lebanon, cre­at­ed a con­stant right­ward shift in Israeli pol­i­tics. It also cre­at­ed a per­pet­u­al need for increased mil­i­tary spend­ing, there­by jus­ti­fy­ing an unusu­al­ly high por­tion of the state GDP spent on the mil­i­tary. With Israel hos­tile to the sur­round­ing states, it devel­oped an umbil­i­cal rela­tion­ship with its pri­ma­ry patron and fun­der — the Unit­ed States. In turn the Unit­ed States ben­e­fit­ed con­tin­u­al­ly not just from the Israeli desta­bi­liza­tion of the sur­round­ing region, but the over­all state of hos­til­i­ty induced with all Arab states.

By the 2000s, the U.S. intra­venous feed of funds to the Israeli mil­i­tary-indus­tri­al com­plex had pro­duced an indus­try capa­ble of com­pet­ing in small-arms and high-end secu­ri­ty tech­nol­o­gy on a world-scale. Israel start­ed to export the exper­tise acquired, sharp­ened, and refined through high-tech­nol­o­gy colo­nial polic­ing of the Pales­tin­ian pop­u­la­tion, espe­cial­ly in the Gaza Strip and the West Bank. Up to 150,000 Israeli house­holds rely eco­nom­i­cal­ly on the arms and secu­ri­ty industry.

The new MOU comes amidst a shift­ing geopo­lit­i­cal envi­ron­ment, both with­in the Unit­ed States and abroad. First, there is a shift inter­nal to the MOU. It will slow­ly phase out the pro­vi­sions for Off Shore Pro­cure­ment, through which Israel could spend up to 26.3 per­cent of its fund­ing pack­age with­in Israel. The White House is broad­cast­ing this shift as mean­ing that Israel will spend more fund­ing, as much as $1.2 bil­lion per year, on the advanced mil­i­tary capa­bil­i­ties that only the Unit­ed States can provide.”

It is prob­a­bly most­ly show. Already mul­ti­ple Israeli mil­i­tary-tech­nol­o­gy firms have sub­sidiaries in the Unit­ed States. Elbit Sys­tems, for exam­ple, has one in Fort Worth, Texas. Oth­ers will like­ly fol­low suit: The big con­trac­tors in Israel will fol­low Elbit’s meth­ods and estab­lish U.S. sub­sidiaries to work through,” said Liran Lublin, an ana­lyst who cov­ers Elbit for Israel Bro­ker­age and Investments.

Fur­ther­more, por­tions of the Israeli high-tech indus­try are the prop­er­ty of U.S.-based entre­pre­neurs and cap­i­tal­ists. In fact, his­tor­i­cal­ly Israel has not been the alba­tross” it is often called by many in the U.S. who are uncom­fort­able with so much sup­port and rap­port with the so-called Jew­ish state” Since at least 1967, Israel has not mere­ly received invest­ments and gifts from the Unit­ed States but has con­tin­u­ous­ly sent back prof­its and div­i­dends to for­eign investors.

The MOU is specif­i­cal­ly for Israel to update the lion’s share of its fight­er air­craft fleet” — a direct grant to the U.S. mil­i­tary-indus­tri­al com­plex, giv­en that fight­er-jet fac­to­ries are exclu­sive­ly based in the Unit­ed States.

The firm estab­lish­ment of Israel’s Qual­i­ta­tive Mil­i­tary Edge also pro­vides an excuse to sell ever-more-sophis­ti­cat­ed weapons to oth­er region­al U.S. allies, espe­cial­ly Sau­di Ara­bia. So long as Israel has the lat­est” U.S. tech­nol­o­gy, oth­er coun­tries can buy old­er mod­els, again to the great prof­it of the U.S. defense-indus­tri­al base. Israel thus is the spark­plug for an entire region-wide weapons bazaar, which not only diverts mon­ey that could oth­er­wise go to social needs for the poor in coun­tries like Iraq and Sau­di Ara­bia, but also pro­vides such coun­tries the means to destroy and dis­man­tle even poor­er coun­tries like Yemen. This keeps the entire region aflame, oppressed and des­per­ate, and thus unlike­ly to upset hier­ar­chi­cal region­al and inter­na­tion­al social structures.

The quan­ti­ty of fund­ing, fur­ther­more, when infla­tion-adjust­ed, is not all that much greater than the pre­vi­ous ten-year pack­age. Pre­vi­ous­ly the Unit­ed States had promised Israel $3.1 bil­lion in annu­al aid; the new­er pack­age is $3.3 bil­lion. The pri­ma­ry dif­fer­ence is that this MOU locks in $500 mil­lion annu­al­ly for mis­sile defense, an amount that used to be the object of annu­al negotiations.

Per­haps one rea­son the Unit­ed States has wished to push through this MOU before Oba­ma leaves office is the ris­ing dis­con­tent with­in the U.S. pop­u­la­tion over ongo­ing sup­port for the Israeli col­o­niza­tion of Pales­tine. Many Pales­tin­ian lives will be stunt­ed, in Pales­tine and else­where, and U.S.-based activists (espe­cial­ly Arabs) will be bru­tal­ized and maligned, but the Boy­cott, Divest­ment, and Sanc­tion (BDS) Move­ment will not eas­i­ly be stopped. This MOU cre­ates facts on the ground.” Much like the Israeli col­o­niza­tion project, such facts are only as strong as the polit­i­cal forces which can defend them. How much strength and endurance these forces have remain to be seen.

Max Ajl is a doc­tor­al stu­dent in devel­op­ment soci­ol­o­gy at Cor­nell Uni­ver­si­ty and an edi­tor at Jadaliyyah.
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