Israel Calls for $13 Billion More in Aid from the United States

By Frank Collins

Israel lost no time in making fresh demands for money from the United States following the outbreak of the Gulf war. The new demand was made to US Deputy Secretary of State Lawrence S. Eagleburger, during his visit to Israel less than one week after the war began.

The $13 billion aid that Israel wants would be on top of the $3 billion annual grant that Israel has been receiving over the past several years. Of the $13 billion, $3 billion would be in grants to reimburse Israel for its losses arising from the Gulf war, and $10 billion would be in grants and loan guarantees for the resettlement of Soviet Jewish immigrants. Israeli Finance Minister Yitzhak Modai warned that more would be required to cover Israeli losses if the war continued beyond mid-February. The $10 billion would be a down payment on the $40 billion that Prime Minister Yitzhak Shamir earlier had said ultimately would be required to settle the flood of Soviet immigrants.

Staggering Demands

These staggering demands on the United States, coming at the time of a deepening recession and the Gulf war with its unpredictable costs, would have wide economic, political and diplomatic ramifications striking at the heart of US policies in the conduct of the Gulf war. If the United States accedes to these demands, Arab allies would be alienated and the Arab, European and Far Eastern countries that are financially supporting the war would question the wisdom of their support if their money seemed to be simply funneled to Israel.

The total of $16 billion demanded by Israel for next year would amount to per capita assistance in the amount of $3,770 for each and every Israeli. This amounts to $18,850 for every Israeli family of five, awesome even by US standards and staggering for the Middle East. The per capita gross national product of Egypt, a crucial ally in the Gulf war, was only $490 in 1988, the latest quoted figure available, and is possibly even lower today. The per capita income of a number of Arab states is not much greater. It requires little imagination to see that the disparity between US help to Israel for staying out of the Gulf war, and US aid to poor Middle East countries for joining us, would be intolerable both to radical Arab and fundamentalist Islamic circles. It would thus be threatening to national stability, not only in Egypt, but in all other moderate Arab states.

The $13 billion demanded by Israel, in amount, ranks among the pledges that have been made by those American allies that are making contributions to the cost of the Gulf war. These pledges are being made with some reluctance, in most cases because of internal politics, particularly in the cases of Japan and Germany.

Reluctant Pledges

For example, Japan pledged $4 billion last September, and an additional pledge of $9 billion is under consideration, for a total of $13 billion. However, there is considerable opposition in the bitterly divided Japanese Diet to the ratification of this pledge, with the outcome far from certain.

Germany contributed $2.2 billion last fall to be divided among the US, Egypt, Turkey and Jordan. Another $5.5 billion is in prospect, for a total of $7.7 billion. In Germany, with a strong pacifist movement, the granting of money for this purpose is a divisive political issue.

Saudi Arabia's contribution has been mainly in billions of dollars' worth of fuel and supplies, plus $760 million in cash so far contributed. Saudi Arabia is technically at war with Israel and opposition to Israel runs deep, even in the ruling class. It is fear of this kind of reaction in Arab countries that has caused the US to sideline Israel in the war.

There can be no question that Israel desperately needs the money. Between 300,000 and 400,000 Russian immigrants have flooded into Israel during the past several years and are without housing or jobs. Immigration is continuing on a somewhat reduced scale in spite of the war. In the background is an economy overburdened with debt, and an inflated military establishment kept afloat only by American largess. These considerations indicate that Israel and the American Israel Public Affairs Committee (AIPAC), Israel's US lobby, will be extraordinarily persistent in pressuring Congress to fund the requested $16 billion assistance package.

Frank Collins is a free-lance journalist specializing in the Middle East.