U.S.-Israeli Relations After the Cold War

The U.S.-Israeli relationship is almost universally described as special, and rightly so. In the economic sphere, for instance, Israel has long been the recipient of the single largest amount of American aid-for a country of only 5.5 million people. It is an aid relations~p with a twist, too. For most recipients, American aid is part loan and part grant, but U.S. aid to Israel-roughly $3 billion annually in recent years, of which $1.8 billion is military aid and $1.2 billion is economic aid-has been all grant since 1986. Also, in other U.S. aid relationships little money is actually transferred abroad. Instead, the country receives a credit for services, rendered largely by American companies. But since the early 1980s, Israel’s aid has been direct money provided near the beginning of the fiscal year for use as Israel sees fit, even though much of the economic aid is used to pay off old military loans. Also, oddly enough, the first free-trade zone established by the United States was with Israel, a small country six thousand miles away,

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