USAID: Israel

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Israel

FY 2001 Program Description and Activity Data Sheets

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FY 2001 Program
The structure of the USAID program for Israel is atypical of other USAID assistance programs in that there is neither projectized assistance nor USAID staff in Israel for this program. Rather, the program supports the implementation of the historic Camp David accords and provides Israel with an annual cash transfer. Hence, there are no structured specific objectives.
The fundamental USAID objective in Israel is to reduce Israel's balance-of-payment pressures as it continues to pursue the economic reforms required for financial stability and structural adjustments needed for rapid sustainable growth. Though the U.S. cash transfer is not conditioned on economic policy reform, the ongoing U.S. State Department-chaired Joint Economic Development Group encourages Israeli reforms to: reduce government spending and deficits, improve tax and public wage structures, increase privatization, reform labor markets and continue to liberalize its trade regime. The cash transfer is used by Israel primarily for repayment of debt to the United States, including Foreign Military Sales debt, and purchases of goods and services from the United States.
By supporting and maintaining the peace process, the program encourages more investment and economic activity, thereby contributing to increased foreign exchange earnings. The GOI's resultant ability to forge new relationships with its neighbors provides further stimulus for exporting goods. Eased border crossings, another result of the peace process, also promise new sources of tourists and export markets.

ACTIVITY DATA SHEET
PROGRAM: Israel
TITLE AND NUMBER: Support Policy Reform for Financial Stability and Structural Adjustments Needed for Rapid Sustainable Growth, 271-001 (271-K-639)
STATUS: New
PLANNED FY 2000 OBLIGATION AND FUNDNG SOURCE: $949,056,000 ESF
PROPOSED FY 2001 OBLIGATION AND FUNDING SOURCE: $840,000,000 ESF
INITIAL OBLIGATION: FY 2001 ESTIMATED COMPLETION DATE: FY 2001
Summary: The purpose of the Israel Cash Transfer is to support policy reforms required for financial stability and structural adjustments needed for rapid sustainable growth. The overall goal of U.S. assistance to Israel is to support the furtherance of peace in the Middle East, initiated at Camp David when Egypt and Israel signed the Peace Accords. Israel remains the only fully democratic government in the region. Its political and economic stability, stressed by the recent absorption of vast numbers of immigrants, continues to be important in furthering U.S. foreign policy objectives in the Middle East.
Key Results: The fundamental USAID objective in Israel is to reduce Israel's balance-of-payment pressures as it continues to pursue the economic reforms required for financial stability and structural adjustments needed for rapid sustainable growth. Though the U.S. cash transfer is not conditioned on economic policy reform, the ongoing U.S. State Department-chaired, Joint Economic Development Group encourages Israeli efforts to reduce government spending and deficits, improve tax and public wage structures, increase privatization, reform labor markets and continue to liberalize its trade regime. Since 1993, export competitiveness has improved, and inflation has been reduced. Expanding business investment and governmental infrastructure investment, coupled with sustained export growth, are projected to help Israel reach its gross domestic product growth rate potential of about five percent.
Performance and Prospects: FY 2001 funds will be provided as a cash transfer and will be used by Israel primarily for repayment of debt to the United States, including Foreign Military Sales debt, and purchases of goods and services from the United States. The U.S. State Department will continue to encourage Israeli reform to reduce government spending and deficits, to improve tax and public wage structures, to increase privatization, to reform labor markets and to continue to liberalize its trade regime.
Possible Adjustments to Plans: None.
Other Donors Programs: The United States is the largest bilateral donor to Israel.
Principal Contractors, Grantees, or Agencies: The transfer is accomplished by a direct grant to the Government of Israel.
Selected Performance Measures: By supporting and maintaining the peace process, the program encourages more investment and economic activity, thereby resulting in increased foreign exchange earnings. The GOI's resultant ability to forge new relationships with its neighbors provides further stimulus for exporting goods. Eased border crossings, another result of the peace process, also promise new sources of tourists and export markets.
U.S. Finance Table (Microsoft Excel)

Last Updated on: November 17, 2000