The aid package for Israel in the 2004 US draft budget is at least $2.776 billion. This sum includes US participation in the Arrow anti-ballistic missile system. Israel is continuing to receive the largest share of US foreign aid.
$136 million is budgeted for the Arrow, of which $66 million for improvements in the program, and $70 million for manufacturing of components in the US and Israel to meet Israel’s defense needs. Under the agreement with Israel Aircraft Industries, Boeing (NYSE:BA) will make most of the Arrow’s components.
Current aid to Israel will be $2.64 billion, including $2.16 billion in military aid and $480 million in civilian aid. Aid to Israel amounts to $2.9 billion in 2003.
Current aid to Israel is calculated under a formula prepared by Ministry of Finance director general Ohad Marani when he was Economics Minister in Washington, and then-Minister of Finance Yaakov Neeman, following a speech by then-Prime Minister Benjamin Netanyahu to Congress in which he committed to weaning Israel off US civilian aid.
Under the formula, $120 million is cut from the civilian aid each year and $60 million in added to the military aid. Civilian aid is scheduled to be eliminated in 2009 and military aid will total $2.4 billion a year.
The US 2004 draft budget does not include Israel’s request for $4 billion in special military aid and $8 billion in guarantees for loans taken from commercial banks. The Bush administration has only just begun discussing the request, and the process will take several months.
Congress has to approve all the items in the Israel aid package. Legislators may increase US participation in the Arrow or other weapons programs.
Published by Globes [online] - www.globes.co.il - on February 4, 2003