Is the massive US defense aid really worth it for Israel? Apparently, no one can disparage a gift of $3.8 billion per year. Nevertheless, the case outlined below might raise some questions.
The US currently exerts serious pressure on the Swiss government to prevent it from acquiring a David's Sling missile defense system by Rafael of Israel. The American interest is obvious: to sell US-made systems to Switzerland. The direct loss incurred by Rafael, a government-owned company, is not less than $1.5 billion, and this has not been the first time such things happened. The US had already compelled Poland to acquire US-made systems instead of Rafael's David's Sling system.
A Fly in the Ointment
How can the US prevent the exportation of a primary Israeli system? Meet the US Aid mechanism. According to a 10-year agreement signed near the end of Barack Obama's presidency, Israel receives $3.8 billion per year in US defense aid. This is a massive amount, $200 million per year higher than the previous agreement, but the increase involved the revocation of the option the Israeli defense establishment had, of changing nearly one billion dollars a year to ILS for direct procurement from Israel's defense industries.
Now, the US Aid funds can be used only to acquire products and systems manufactured on US soil. The only exception to the rule involves $500 million out of the annual $3.8 billion, intended for two joint US-Israeli projects: the Arrow-3 project and the David's Sling project. The two countries share the expenditure on these projects.
The Arrow missile defense system is developed by IAI and manufactured by Boeing. The David's Sling project is a joint effort of Rafael and Raytheon. Conversely, the Iron Dome short-range missile defense system is developed in Israel by Rafael, which is the prime contractor, and manufactured jointly in Israel and the US (Barack Obama had decided, magnanimously, to finance Israel's acquisition of seven Iron Dome batteries).
Click here for the full story, on the ID website.
(EDITOR’S NOTE: While the report is interesting, and provides some interesting insights in the Israeli-US defense relationship, noting backs up the author’s central claim – that Switzerland, Poland and others would have bought David’s Sling SAM system if the US had not interfered.)