When To Say Yes To $3.7 Billion

May 12, 2016 § 2 Comments

Yom Ha’atzmaut (Israel’s Independence Day) is always a good time to celebrate Israel’s accomplishments, which are numerous. One of the most important of those accomplishments is independence itself. I do not mean independence in the obvious sense of having an independent state, but in the sense of not being influenced or controlled by anyone else. Israelis – and Israel – famously go their own way, and this is often reflected in Israeli policy. Whether it was ultimately counterproductive or not, Israel fought tooth and nail against the Iran deal despite the views of its Western allies and well beyond the point when it was clear that the deal was a fait accompli. Israel has not hesitated to act in its own best interest in the face of global opposition, such as with the strike on the Osirak nuclear reactor in Iraq in 1981 or the development of its own nuclear program. It is difficult to look at Israeli security or domestic policy and view it as being influenced or controlled by other states or world opinion, both for the good and the bad.

Of course, Independence Day is also a good time to reflect on the ways in which Israel’s survival is guaranteed precisely because of its relationships with others, since no country – including global superpowers – can ever truly survive by going it alone. The most important of these is of course the relationship with the United States, and it too is something to be celebrated as an accomplishment. The U.S. has seen Israel through different prisms over nearly seven decades, from Harry Truman’s sense of supporting Israel as biblically mandated to Richard Nixon’s view of Israel as a bulwark against Communism in the Middle East to Bill Clinton’s deep affinity for and identification with Israeli values and spirit. That Israel has through all of this maintained and institutionalized the connection to the U.S. across all levels of government, fostered bonds between American and Israeli society, intertwined the American and Israeli economies, and built a relationship with the U.S. that has withstood many trials and bumps and remained not only resilient but one of the strongest bilateral partnerships that exists is remarkable (and if you think this all exists solely because of a shadowy and nefarious lobbying campaign, you have some serious blind spots, to put it charitably).

One of the hallmarks of this relationship is currently in danger, and it is the annual military assistance that the U.S. provides to Israel. The current aid package is a ten year agreement that was signed in August 2007 and provides $3 billion per year, which is about 20% of Israel’s annual defense spending. While some, including Naftali Bennett and Elliott Abrams, have cogently argued that it would be best for Israel if military aid was to be reduced or even eliminated entirely, needless to say the defense assistance is currently a vital component of Israel’s security and contingency planning, and ensures Israel’s military primacy in the Middle East. Aside from shoring up the U.S.’s key military ally in the world’s most turbulent region, another benefit to the U.S. from this aid package is that the bulk of the funds are spent at home, providing an important stimulus to the American economy. As the current MOU is about to expire, the U.S. and Israel have been negotiating the next one and have run into a number of snags. While the two sides appear to be apart over the issue of the overall number – Israel was initially seeking as much as $4.5 billion annually and the U.S. is reportedly holding the line at $3.7 billion – the actual hang-up is in the details. The current MOU allows Israel to spend 26.3% of the funds on Israeli-made equipment rather than spending the entirety in the U.S., which is not a component of U.S. military assistance to any other country, and it also allows Israel to spend $400 million per year on gasoline. Reuters reported last week that the U.S. wants to eliminate both of these clauses going forward, and Israel so far has been reluctant to agree to these terms, arguing that to remove the nearly $800 million that is spent annually on the Israeli defense industry will fatally cripple it.

I have already made apparent my view that refusing to negotiate on the military aid package during the Iran deal debate, when Israel still had some leverage, was an epic strategic blunder on Prime Minister Netanyahu’s part, so there is no need to rehash the point. What is taking place now is also a bad misreading of the political environment, and Israel is again making a critical mistake. The reason for the 26.3% carve out in the last MOU was to give the Israeli defense industry a boost, as Israel has always viewed a strong homegrown defense technology and manufacturing sector as critical to Israeli security. The boost worked well; so well, in fact, that U.S. arms manufacturers are now competing with Israeli ones in the market for advanced weapons, particularly when it comes to drones and other aerial technology. It is now an election year in the U.S., at a time when people are worried about the uneven economic recovery and particularly about manufacturing jobs. Donald Trump and Bernie Sanders have both injected an enormous dose of economic populism into the national conversation, not to mention Trump’s ugly “America First” nationalism. Israel is already requesting a substantial increase in military assistance at a time when budget sequestration is still in effect in the U.S. and its own defense spending is being cut back. This seems like a particularly bad time to make a stand against American negotiators and members of Congress over an issue that will affect U.S. jobs, especially when it involves an industry where Israeli companies and American companies are directly competing. Imagine trying to convince a Republican congressman in Texas or South Carolina or Georgia that it is more important to maintain the 26.3% exception than it is to save jobs in his or her district, and you’ll see the limits of pro-Israel advocacy firsthand. This is also not an issue that will go away once the White House changes hands, as the fundamental disagreement here is not going to evaporate. It is entirely appropriate for Israel to make the case for higher levels of aid given the changed strategic regional environment it faces since the last agreement was negotiated, and this is particularly true when it comes to missile defense. The 26.3% carve out is, however, not quite as defensible, and Israel should not view it as a core benefit that is being taken away but as an added bonus that it enjoyed during a different economic era.

Israel’s security is not an issue that can be compromised. Were I advising the Israeli government, I would urge it to smile and say thank you to the American government for the generous and unprecedented offer on the table, and to find other ways to prop up Israeli defense firms. Whatever the final package turns out to be, make sure that it lives up to Israel’s security needs, and don’t spurn an offer hoping that a better one is around the corner. That mistake happened once before. It shouldn’t be repeated.

How To Lose Friends And Not Influence Anyone

February 18, 2016 § 4 Comments

Israel in the last week has presented two classic case studies on strategic blundering and on precisely how not to conduct a successful foreign policy. One of these cases resulted in little more than embarrassment, but the other will actually have tangible consequences for Israel’s security and long-term military planning. Let’s look at both to see if there are any lessons to be learned for Israel going forward.

The first is the fight with the European Union over labeling goods made in Jewish settlements in the West Bank. When the EU issued its labeling guidelines, the Israeli government’s response was to officially suspend diplomatic contacts with the EU on the topic of the Israeli-Palestinian conflict. This was not merely a cosmetic measure; it came on the heels of Israel withdrawing from bilateral forums with the EU and calling the EU ambassador to Israel on the carpet, and was seen as Israel’s harshest available punishment against the EU in response to the labeling initiative. The presumed intention behind this move was to force the EU to reconsider, admit that it had gone too far, and withdraw the decision. Israel wasn’t wrong; I think that Israel was largely in the right given the way the EU guidelines differentiate between Jewish goods and Palestinian goods (an element that the U.S. guidelines do not have). But Prime Minister Netanyahu, the cabinet, and politicians across the entire spectrum made a big deal over the limited suspension of diplomatic contacts, and played it up as Israel using its power to change EU policy.

So you can imagine just how embarrassed Netanyahu and the government must have been last week when the suspension of diplomatic contacts was halted despite the EU not withdrawing its labeling guidelines. Furthermore, during the conversation between Netanyahu and EU foreign policy chief Federica Mogherini in which Netanyahu agreed to end the diplomatic suspension, Mogherini specifically reiterated the EU’s view that labeling does not constitute a boycott and did not promise that no further measures would be forthcoming. In other words, Israel accomplished nothing but angering EU countries even further, and possibly shot itself in the foot by prompting the emerging French initiative for an international peace conference. The bluster and rage turned out to be irrelevant at best and counterproductive at worst.

The second case is still developing, but it is over the amount of annual U.S. military assistance to Israel. Close followers of this issue will recall that in the aftermath of the absolutely disastrous maneuver that was Netanyahu’s speech to Congress last March, Israel repeatedly deferred discussing the next ten year Memorandum of Understanding that would govern the amount and type of aid until after the Iran deal was either accepted or rejected by Congress – despite the fact that it was clear as day that the votes to reject it were not there – while Israeli officials anonymously expressed confidence that it wouldn’t matter. Except that now it turns out that rejecting repeated U.S. offers to negotiate did in fact matter, as Israel is unhappy with what is now being offered and Israeli officials now anonymously express that Israel would have received a deal more to their liking had they not waited until the Iran deal was concluded and implemented. My guess is that ultimately the aid package will be more than Israel is being offered right now but still less than Israeli officials were anticipating over the spring and summer when they were casually tossing out the number of $5 billion annually as if it was signed, sealed, delivered. Make no mistake though, this is a strategic failure of enormous magnitude, and is just the latest fallout from last March’s speech, which brought Israel not a single measurable benefit.

So what are the lessons from these two episodes for Israeli strategic engagement and diplomacy going forward? Some people will no doubt infer from both of them that the European Union and the Obama administration are out to get Israel and jumped at the chance to do so. I think, however, that there are more level-headed takeaways. First, leverage is paramount in any negotiation and Israel plunged headfirst into both when its leverage was about as weak as it could be. Jerusalem went hard after the EU after Netanyahu and the cabinet had spent over a year making it clear that they were not interested in any type of peace process and only a few days after Netanyahu had rejected separate U.S. and Quartet entreaties to take steps in the West Bank that would demonstrate a commitment to two states. Similarly, Israel purposely put off negotiations over the aid MOU until it had no cards left to play on the Iran deal and after the world had largely moved on. When the U.S. and other world powers were focused on mitigating the Iran threat, then Israel was in the best position to push for military assistance that would blunt that threat. But even in foreign policy, states and leaders have short attention spans, and now that the bandwidth is being consumed almost entirely by Syria and most American decision makers view the threat from Iran as having been temporarily rectified, Israel is not going to find itself with quite so receptive an audience.

Second is that Israel made the mistake of behaving like a global power rather than the regional power that it is. It is mind-boggling that Netanyahu or anyone else genuinely thought that suspending some diplomatic contacts with the EU was going to rattle it into changing its policies in fear of what might come next. It is mind-boggling that Netanyahu or anyone else genuinely thought that it could get anything and everything that it wanted from this administration or any administration (remember how President George W. Bush refused to give Israel bunker busters in 2008?) no matter the context. This isn’t a matter of states disrespecting the world’s only Jewish state. It is a matter of an ironclad law of international relations, which is that relative power matters. Israel too often acts as if it is dealing with equals when in fact it is the subordinate party when it comes to the EU and even more so the U.S.

Finally, as with Netanyahu’s speech to Congress, there is an element of hubris and a complete misreading of domestic politics involved. The settlement labeling initiative, which passed the European Parliament 525-70, isn’t even a close call in European politics; the idea that the Israeli government believed that it could downgrade relations with the EU and get a different result was hopelessly naïve. Truth be told, Israel’s response probably only reinforced for many European leaders that they were making the right move. On the U.S. side of things, following the Congressional speech debacle, months of intensive lobbying against President Obama’s signature foreign policy priority, and open statements and insinuations that the White House wasn’t smart or knowledgeable enough to know what it was doing, Israel expected none of these factors to impact at all on dealings going forward. To call this foolish is being charitable. This isn’t to say that Israel shouldn’t have taken these steps if it actually thought that they would affect the outcome of the Iran deal, but that it shouldn’t have done them without first thinking through the consequences and accepting the costs. These are all things that should be on the minds of Israel’s leaders going forward when they make decisions on which pitches to swing at and which pitches to take.

Domestic Politics Vs. International Politics In The Israeli Election

December 26, 2012 § 7 Comments

As regular O&Z readers know, if this blog has any sort of running theme it is that domestic politics is often decisive in determining foreign policy. When I wrote last week for The Atlantic about the rightwing political competition that is driving settlement activity, a close friend emailed, “So you’re saying it is local politics at work…#ImagineMySurprise.” I have pointed to domestic politics to argue that Israel and Turkey won’t be normalizing relations any time soon (and I’ll try and write about the recent NATO news tomorrow, but no, I don’t think it signals that anything is going to imminently change) and to predict that there was not going to be an Israeli strike on Iran last spring, summer, or fall. Does this mean that domestic politics is always decisive in every situation? Of course not. There are plenty of times in which other considerations are at work; the months-long push on the Turkish government’s to get NATO to intervene in Syria is one such instance. Nevertheless, I maintain that a lack of focus on domestic politics and the constraints it imposes leads to lots of shoddy analysis from both professionals and casual observers.

Over the next few months, Israel is going to be a great petri dish for watching these trends at work. On the one hand, influential and respected defense and security experts like Amos Yadlin are warning that Israel is losing its international support and status because of its footdragging on the peace process, Tzipi Livni has founded a new party devoted solely to reviving talks with the Palestinians, and there is chatter that the EU is losing so much patience that it is going to try and force Israel and the Palestinians into a deal. Last week the State Department issued a harsher than usual condemnation of Israeli settlement activity, as did the fourteen non-U.S. members of the Security Council. By any measure, Israel’s settlement policy and reticence on the creation of a Palestinian state is become increasingly costly. Looking at it from a black box perspective, you have a state living in a hostile neighborhood with an enormous qualitative military edge over its neighbors that is facing a dangerous potential dip in support from its main external allies and is facing increasing international isolation over the Palestinian statehood issue, which does not present an existential security threat by any means. The state is facing what it believes is an existential threat from Iran, and on that front it needs all the help it can get from its main allies. Given everything involved, you’d expect Israel in this situation to take moves to forestall its isolation and shore up its relationship with the U.S. and EU – which are its primary providers of military and economic aid and diplomatic support across the board – by making some serious concessions on the Palestinian front. After all, even if settlements in the West Bank are viewed as a security buffer, keeping them from a security perspective given Palestinian military capabilities pales in comparison to risking the cessation of purchases of military hardware and transfers of military technology, and enabling the risk of complete diplomatic isolation.

Given all of this, one might expect to see an Israeli coalition after the election that includes Livni’s Hatnua party and that undertakes serious initiatives on the Palestinian statehood and peace process fronts. Such a coalition would under no circumstances include Naftali Bennett and Habayit Hayehudi, as Bennett wants to annex Area C and does not support the creation of a Palestinian state. Indeed, there have been moves in that direction as far as keeping Bennett out is concerned, and there have also been reports that Netanyahu and Livni are exploring the possibility of Hatnua joining the coalition after the election, which would almost necessarily mean her return to the Foreign Ministry and a greater push for a negotiated settlement with the Palestinians.

On the other hand, taking domestic politics into account would point to a different path. As I wrote last week, the idea behind the joint Likud-Beiteinu list was to create a right-wing monolith that would put an electoral victory out of reach for Israel’s left and to also present rightwing voters without a real alternative. Netanyahu wanted to eliminate any challenges from his right flank by co-opting Lieberman, but it now turns out that he has to deal with Bennett on his right and a swift migration of voters (so far, at least) away from Likud and to Habayit Hayehudi. It is also the case that Israeli voters do not care about the Palestinians or the peace process, which is why Hatnua is stuck in single digits, Labor and Shelley Yachimovich barely mention anything other than social issues and the economy unless absolutely forced to, and Bennett is gaining a larger following based partly on a perception that Netanyahu is actually not hawkish enough. Taking all of this into account means a coalition that includes Bennett, continues to take a hardline on a Palestinian state, and bemoans the lack of support from European states rather than constructing a policy meant to change that reality.

So which will it be? Unsurprisingly, my money is on the second option, but the first one is certainly plausible. It really just depends on how much weight you place on the domestic political calculus. Netanyahu’s history is that he pays attention to his domestic political survival above all else, and I see no evidence that he has suddenly become a changed man. To my mind, Israel’s long term health necessitates the first path, while Netanyahu’s lies with the second. Let’s hope that events in 2013 prove me wrong.

What Does Obama’s Win Mean For Bibi?

November 7, 2012 § 5 Comments

As it became clear last night that President Obama was headed for an easy victory, a bunch of people on my twitter feed began speculating – or more accurately, making jokes – about what this would mean for Bibi Netanyahu. The joking actually turned into a serious conversation about whether Obama will somehow punish Netanyahu for his perceived support of Romney and clashes with the president, with some going so far as to speculate that he will tell Netanyahu that no help on Iran is forthcoming. It seems that Netanyahu is worried himself, as he is already clamping down on Likud members who are expressing negative reactions to Obama’s reelection out of fear that it will damage his standing with the White House even further.

Despite what is obviously not a great relationship between the two men, I don’t quite see how Obama’s reelection is going to have much of a negative effect on Netanyahu or the U.S.-Israel relationship at large. This is true for a few reasons. First, as Steven Cook persuasively argued last month, the relationship is institutionalized to the point that personal animosity between the countries’ leaders is not going to have much of an effect, if any. Let’s assume that Obama decides this morning that he wants to put the screws on Netanyahu – what precisely is he going to do? Aid to Israel is controlled by Congress, the joint military and intelligence cooperation is so deeply ingrained that it would take a long time to reverse, and there are deep ties between the two countries at all levels of government, business, and society. There are smaller things that Obama could do on the margins, but the immediate consequences are close to zero.

Second, and I cannot stress this enough, if you think that the myriad of ways in which Obama supported Israel during his first term was just a feint to win an election, then you are falling victim to the same delusion that said Nate Silver and all of the polls predicting an Obama win were deliberately skewing the evidence. Quite simply, there is absolutely nothing to suggest that all of a sudden funding for Iron Dome, joint military exercises, vetoing of anti-Israel UN resolutions, and other similar actions are going to stop now that Obama doesn’t have to worry about senior citizens’ votes in Florida. I will bet any amount of money that there is no drop-off in the administration’s support of Israel in the security and diplomatic spheres, and the folks who think otherwise have a large burden of proof to overcome that cannot be swept away merely by shouting “but he didn’t visit Israel” or “he left Netanyahu waiting while he ate dinner with his family.”

Third, Obama is not very popular among Israelis, and so even if he wanted to punish Netanyahu by trying to interfere in the Israeli election, it just wouldn’t work. Bill Clinton might have been able to sway Israelis when he was president, but Obama does not have the popularity, credibility, or familiarity with Israeli voters to pull of such a move. The fact that Obama was reelected is not going to factor into Israelis’ calculations when they go to the polls, as Brent Sasley helpfully pointed out previously. The idea that Netanyahu now has to be running scared because his hopes to have Romney elected did not pan out is a pretty flimsy one.

Finally, the suggestion that Obama is now going to tell Netanyahu that the U.S. has no interest in confronting Iran makes little sense to me based on previous U.S. actions and Obama’s long record of statements indicating that he views an Iranian nuclear bomb as a real problem. Aside from Stuxnet, crippling sanctions, and an increased carrier presence in the Gulf, Obama has made clear that preventing nuclear proliferation is perhaps the foreign policy issue that he holds most dear. The disagreement between he and Netanyahu over the red line of nuclear capability vs. nuclear weapons is still going to be there, but Obama has held firm to his own timeline so far and he is not going to now somehow make it even more firm because he has been reelected. The bottom line here is that Obama is worried about an Iranian nuclear weapon as well, and he is not going to drop his concerns just because he and Netanyahu do not get along very well.

P.S. For another argument on why the Obama revenge meme is an ill-informed one that focuses on different variables than mine, check out Peter Beinart this morning.

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