Eshkol Outlines Harsh Economic Measures for Israelis; Cites Defects
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Eshkol Outlines Harsh Economic Measures for Israelis; Cites Defects

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Prime Minister Levi Eshkol called upon all of Israel tonight to take a fresh look at the economic facts of life, pull in its belt more tightly than ever, and work together in all sectors — public and private — toward the stabilization of the country’s economy, increasing productivity so that exports may rise, and thus giving employment to more workers.

The principal aims of the State of Israel, he stated, in a radio broadcast, are the same as they have been since the rebirth of Israel, “Peace with our neighbors; the fusion of the various communities in our land into one nation; moving our economy forward toward self-sufficiency.” The Prime Minister then turned his message to the nation into a somber lecture on the state of the economy, its shortcomings and its near future.

He said that, despite the nation’s affluence and well-being, and despite the fact that exports have risen by scores of millions of dollars yearly, the economy has been unable to provide enough productive employment. Productivity, he stated, has been low; management has been bad; organizational methods have been backward; high spending has been indulged in only to create impressions; staffs have been inflated; the wage demands of workers have been much too high.


“Maybe all of this could have continued for some years,” said the Premier, “It might even have increased the popularity of the Government. But the price we would have had to pay later would have been still higher. ” Since the Government’s call upon Israelis for self-restraint had gone unheeded, he declared, the Government has had to step in and make a number of decisions as follows: Prices will be held down rigidly; no new taxes will be imposed, except on increased capital gains; investments will be encouraged; services will be overhauled; expenditures will be cut drastically.

The Government, warned Mr. Eshkol, will take measures to prevent any tendency toward getting rich easily. Bank charges will be reduced. Exports will be encouraged by various administrative and fiscal means. Many workers, he said, will find themselves without jobs during the transition period between their dismissal from certain services and their placement in jobs in productive enterprises. “Hardships,” he warned, “may be caused to thousands, perhaps to tens of thousands.”

However, the Prime Minister concluded, it is up to all to make a common effort to face the situation — “up to all workers, managements, services, banks and the Government to work together toward stabilizing the economy and make it more productive, so that exports will increase and additional workers can be employed.”

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