Israeli perspective on foreign aid

Alex Tabarrok writes:

Shimon Peres gave a press conference . . . When asked about foreign aid, specifically foreign aid to some Arab regimes he had this to say (again a paraphrase from my notes, the clever lines are his, the order may have changed somewhat and this is incomplete).

Look, the West can’t help everyone and the regimes would be insulted if we tried. But they don’t need our help. The greatest poverty in our time has been in China and India. Did these countries reduce poverty because of our help? No. They did it themselves.

Giving is problematic. We take money from poor people in rich countries and give it to rich people in poor countries. Aid sometimes creates corruption.

The part of this that puzzles me is the line, “they don’t need our help.” I always thought that Israel was a net recipient of foreign aid, not a net donor. So shouldn’t Peres be saying, “we don’t need your help”?

Or maybe there’s something I’m missing here. According to the Congressional Research Service, “Israel is the largest cumulative recipient of U.S. foreign assistance since World War II. From 1976-2004, Israel was the largest annual recipient of U.S. foreign assistance, having since been supplanted by Iraq. Since 1985, the United States has provided nearly $3 billion in grants annually to Israel.” But I can’t so easily find a number for how much Israel gives to other countries.

12 Responses to Israeli perspective on foreign aid

  1. Matthew Stevens June 23, 2011 at 3:35 pm #

    I’m no expert, but Israel’s seems to have an ambivalent attitude to its US aid. I’ve heard right-wing Israelis tell me that the US is forcing Israel to accept the money, something I find very hard to believe, but the feeling seems genuine.

  2. Yair June 23, 2011 at 3:52 pm #

    Makes sense to me, in context. I suspect Peres means economic/civilian aid can be problematic as he describes. But unlike most US foreign aid, 100% of aid to Israel today is military and 75%+ of this funding is then pumped back into the US economy as a condition of the aid. [A superb AP piece (a sad rarity on Middle East topics) once detailed all this – it’s highly recommended reading: As is well known, Israel doesn’t need help building or bolstering its burgeoning economy. In that sense, Peres is indeed saying “we don’t need your help.”

    Another point: it’s possible that Peres – with his reference to corruption-via-aid – is referring to bankrolling autocracies and other non-democratic entities who may misuse and abuse foreign funds for the betterment of corrupt elites, unlike democracies which are accountable to their people.

    Thus, all in all, none of Peres’s criticisms of foreign aid would really apply to Israel (of course, one wouldn’t expect them to!).

  3. Tyson June 23, 2011 at 4:10 pm #

    I looked for data on Israeli outgoing aid and couldn’t find any (here is an OECD profile, for example – the foreign aid spending column is just dots: ). But I know Israel does development projects in Africa, etc. I think when he says “we” he means the West, and I think when he says aid he means development aid and not military aid. I think pretty much all of our aid to Israel is in the form of military aid: (but I think we give indirect aid in other ways – I remember Bush Sr. holding up guarantees for loans for housing). Israel benefits from that but so do we, by having a loyal (although sometimes frustrating) ally in the region. We also are paying for more than our share of NATO, so one could argue we are giving military aid to Western Europe.

    But it’s a good point, nonetheless. Somewhat similar to the point that bankers sound funny when they complain about government handouts to the poor.

  4. Tyson June 23, 2011 at 4:18 pm #

    I was typing when Yair’s post went up so didn’t see that he already made the point about the aid being military aid. The US also ties some of its development aid, requiring that a percentage be spent on American goods and services.

    Here is an article about the loan guarantees the US awards to Israel. They have to pay the loans back to third party lenders but we are helping them get lower interest rates, so this is sort of similar to development aid but doesn’t show up on the books as aid.

  5. Tyson June 23, 2011 at 4:25 pm #

    Here is a webpage about MASHAV (Israel’s foreign aid agency) if anyone wants to look for disbursement data. It didn’t jump out at me.

    • Ed Marshall June 23, 2011 at 7:55 pm #

      I do remember seeing a pamphlet out at an informational session for International Refugee Day entitled “Who Cares about Refugees” and it detailed how the Israeli government was doing something for Burmese refugees.

      I’m sort of surprised that they had the balls to try that but I shouldn’t have.

  6. Gnash Equilibrium June 23, 2011 at 5:26 pm #

    What’s the difference between military and civilian aid? Money is fungible.

  7. Joshua June 23, 2011 at 8:01 pm #

    If you look at the MASHAV website, as well as sift through news stories regarding the recent string of natural disasters, you get a sense that Israeli aid is given far more through the donation of manpower, technology, education, medical and food aid rather than cash. This makes sense for a few reasons. First, if one takes a look at the list of nations that do not have diplomatic relations with/still claim belligerency status against Israel ( one can see included a large amount of the countries one would expect to recieve foreign aid. In many of these countries, as well as others who would like to maintain decent relations with OPEC (a not so Israel-friendly organization), accepting cash from Israel would be politically damaging. Instead, Israel offers humanitarian aid, both because there is a greater chance of it being accepted and so that it can make political inroads without being accused of bankrolling a corrupt government. Frankly, it’s doesn’t sound like a bad strategy. Also, if one subscribes to the theory that foreign aid is a means to buy policy concessions, the ones that Israel would most seek would be from its neighbors, and even the U.S. isn’t able to buy all of their support. Also, if I’m not mistaken, the U.S. military aid to Israel is conditional upon Israel spending it on U.S. military goods. Hence Israel still uses primarily the M16, despite the fact that they have come up with their own Tavor rifle, which is supposed to perform better for their purposes.

    • Ed Marshall June 23, 2011 at 8:25 pm #

      I got through reading the financial statements for the programs they are touting and none of them receive any funds from the government. They are “Israeli” as in, they are Israeli NGOs, and poking through the books they appear to be self-supporting. Maybe they are just too humble to put any figures out there and send out checks on the condition of remaining anonymous, but it seems rather….um, completely unlikely. It would also move them out of being smart foreign aid donors into insane ones who are just so altruistic they don’t want anyone to know.

      • Ed Marshall June 23, 2011 at 8:38 pm #

        and more odd, I haven’t seen a cash donation from any Israeli yet. All the money comes from individual donors in the United States and Canada.

        • Ed Marshall June 23, 2011 at 8:50 pm #

          and wow, Save a Child is about a huge scam. All the expenditures are to send doctors somewhere to examine children’s hearts. Year after year, there are never any expenditures on actually bringing anyone to their facility in Holon, the last time they actually used the facility was 2002. It has just been sitting there since somehow depreciating in value according to the financials at the tune of tens of thousands of dollars a year.

  8. tequila June 24, 2011 at 8:01 pm #

    Israel is the only country in the world that receives U.S. military aid that can use part of this money to instead fund its own defense industry, which is why the Israelis are also major weapons exporters.

    We subsidize roughly 20% of Israel’s defense budget.