Aid to Israel: The Story in Numbers

David Hazony
Contentions/Commentary
12 January '10

While everyone over here in Israel is tittering over the question of whether George Mitchell did or did not threaten to cut back on American aid to Israel if there is no progress in peace talks, it might be worth getting a little perspective on what those numbers actually look like, both for Israelis and for Americans.

In 1985, the year Israel started receiving such high levels of American aid, U.S. taxpayers gave Israel about $3.4 billion in economic and military grants. That year, Israel’s GDP stood at about $24.1 billion in current dollars. American aid constituted about 14 percent of Israel’s GDP — an enormous amount of support for a country struggling with both a severe economic crisis and an ongoing war in Lebanon.

In 1996, the year Prime Minister Netanyahu addressed a joint session of Congress and declared his aim of ending Israel’s dependence on American aid, total grants came to $3.1 billion, while Israel’s GDP stood at $105 billion. U.S. aid was then only about 3 percent of Israel’s GDP.

In 2008, U.S. aid was down to about $2.4 billion, while Israel’s GDP was up to $199 billion. We’re talking about 1.2 percent of Israel’s GDP.

So whereas nobody would consider $2.4 billion a trivial amount of money, the economic significance of that aid has dropped dramatically, as far as Israelis are concerned. Israel’s “dependence” on American aid is not zero, but it’s heading there.

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