JERUSALEM (Oct. 7)
A Stanford University professor is directing the drafting of Israel’s first overall five -year development plan, which it is hoped will raise Israel’s gross national product by eight to ten percent annually. The goal is to boost exports to compensate for the gradual decrease of capital imports which, by the end of the five-year period, may be $150,000,000 smaller than at present.
Prof. Hollis B. Chenery has been invited, through the United Nations Technical Assistance Program, by the Bank of Israel, the central state bank, to supervise the preparation of the plan which, it is hoped, would tide Israel through the 1960-1965 period, expected to be the toughest economically in the history of the 11-year-old nation.
The gap of Israel’s foreign trade now is about $350,000,000 a year. This deficit is made up by United States Government and private aid, sale of Israel bonds, West German reparations payments and individual restitution payments from Germany to Israel citizens, and private investments from abroad.
While Israel hopes that there will be no reduction in private aid, mainly through the United Jewish Appeal, and that private investment and Israel bond sales will increase, there is little doubt here that U.S. Government aid will be smaller, that there will be a decline in private restitution payments and it is noted that West German reparations will end completely when the Federal Republic completes fulfillment of its obligations under the Reparations Agreement.
Officials hope that the Five Year Plan will help Israel in facing the expected “lean years.” It is based on the assumption that the population will grow by about 50,000 persons a year, reaching 2,250,000 in 1965. The rate of increase in per capita consumption should be decreased to two to three percent per year, instead of the annual average increase of four percent during the past 11 years.