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Who’s Dependent? Israel or the Palestinians?

I have a piece in the New York Post today that suggests only a liar or an insane person would deny that Israel benefits from a political culture far healthier than the corrupted and diseased culture of the Palestinian polities. You can read it here. Mitt Romney pointed out the wild disparity in GDP in the areas controlled by the Palestinians and those under Israeli dominion. Someone on Twitter commented that Israel is a “welfare state” living off the U.S. and we should see what would happen if it were cut off.

Well, let’s see. U.S. aid to Israel has remained steady around $3 billion a year since the signing of the Camp David Accords in 1979. It was set that high in part because Israel surrendered functional oil fields to Egypt when it gave back the Sinai and lost a significant source of income. In 1980, that aid was enormously important to Israel’s general health. It constituted something like one-seventh of the nation’s overall GDP ($22.8 billion). Flash forward to 2011. Israel’s GDP was $245 billion. U.S. aid constituted 1/81st of Israel’s GDP.

What’s more, almost all that aid is in the form of military assistance, much of it in the form of support for Israel’s Iron Dome missile-defense efforts, which have direct R&D implications for the United States. In other words, Israel is testing, under real-world conditions, equipment the U.S. may need to use later.

And the Palestinians? A 2012 report from the World Bank explains that its economic growth since 2006 is almost entirely in the form of money garnered from abroad, which goes to fund government activities. “most of the recent economic growth can be attributed to the large inflow of aid, which has funded government expenditures. This has skewed the economy towards the public sector and non-tradables. Public administration, defense and other mostly public services such as health, education, electricity and water grew from less than 20 percent of GDP in 1994 to more than 27 percent in 2010….The importance of aid cannot be overstated and by 2008 current transfers had risen to about US$3.4 billion, double what they were in 2006.”

The World Bank blames Israeli actions in the wake of the Second Intifada for this, but those Israeli actions came as the result of terrorist aggression and the need for self-defense against Yasser Arafat’s insane war and Hamas’s murderous rocketry attacks. Which only strengthens Romney’s point about culture mattering when it comes to understanding Israel’s success and the dire condition of the Palestinians. And that the line about Israel being a welfare dependent of the United States is about as current as an Atari game system.

 



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