Israel’s Knesset worried that U.S’s $3.8 billion aid hurts local defense industry

By Middle East Affairs

The Knesset Finance Committee is worried that a 10-year military aid package from the U.S that goes into effect in 2019 could put the country’s defense in jeopardy and cost 22,000 Israeli their jobs.

The committee wants Israel to open talks with the U.S. Moshe Gafni, the chairman of the committee says “We have to have a discussion with the United States. It’s our friend. It’s interested in what’s happening here. We have to provide a solution for these people.”

The new agreement which was signed into law in 2016, would increase Israel’s annual aid to $3.8 billion. Israel currently spends 26.3% of its aid, which translates into $815 million of its aid to purchase equipment and services from the local defense industry. It also spends 13% of its aid from the U.S on jet fuel for Israel’s warplanes, in 2019 it will no longer be allowed to purchase fuel with its aid money.

Knesset, Israel’s legislative branch of its government is adamant that the new agreements of the $3.8 billion aid package could have the human cost of job losses and damage Israel’s defense industry, one of the largest in the world.

However, Knesset is very happy for the new administration in Washington, MK Mickey Levy says that “The administration in the United States today is different from the previous one, so we can act on a diplomatic level.”

Knesset thinks that Trump would be willing to reconsider its terms of the deal, but an economist at the Defense Ministry, Zeev Zilber is unsure of Trump’s willingness to discuss. Zilber said “The current government is tough about its preference for American industry. This is a dramatic change.”

Levy said that the conditions of the aid package would endanger 130 factories and it’s 9,000 workers in areas of the country where employment is already lower than the national average.

Gafni, the chairman of the committee said, “Ensuring employment in the periphery is no less important than the issue of defense. It means that society will crumble if tens of thousands are fired. We cannot stand idly by in such a situation.”

MK Eyal Ben-Reuven a member of the opposition Zionist Union believes that Israel’ is in danger of losing its technological edge. He is also worried that the $3.8 billion in aid would cost the national equipment industry of its local contracts such as the Iron Dome anti-missile system.

Ben-Reuven explained his point, “Another problem is the technology [growth] engine. Small companies are the source of many ideas used by larger ones.” We’re told that we will have six years, that [the impact] will be spread out, but the biggest companies are already on their way to the United States.”

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