JERUSALEM (Nov. 4)
The Israeli public Is bracing itself for tough new economic measures which the government is expected to announce after the next Cabinet meeting this Thursday. The initial reaction has been a buying spree to stock up on everything from basic food commodities to imported luxury items before their prices soar out of reach for the average consumer
Officials say the measures are urgently needed to stem the balance of payments deficit which is mounting to crisis proportions. Higher pries and higher duties are expected to curtail demand and thus slow down inflation. Economic pundits are predicting, among other things, a steep rise In the price of oil, already the highest in the world in Israel.
At the same time, the government is expected to impose measures that will force the public to reduce its consumption of oil. including the reinstatement of careless” days, a fuel conservation measure taken right after the Yom Kippur War. Also under consideration is a cut in the government’s subsidies of basic items such as sugar. This will drive up prices but the government intends to reimburse poor families with larger welfare checks.
EXPECTED CUTBACKS AND BANS
The government is also expected to cut back on public services though which ones will be affected is not yet known. Added import surcharges are expected to be coupled with greater incentives for exporters in an effort to rebuild Israel’s sagging trade balance. Some economists predict a ban on some luxury imports and a cut in the foreign currency allowance for Israelis traveling abroad. Officials insist that there is no plan to devalue the Israeli pound at this time. But such assurances have met with skepticism. The dollar rate has soared on both the regular money market and the black marked.
Long queues were seen today outside shops selling imported electrical appliances, furniture and other items from abroad. Goods in stock are being sold at current prices but no prices are being quoted on goods that must be ordered. Purchasers are required to sign an agreement to pay the new price however high it may be.
Importers are lining up at the Customs offices in an effort to clear as many goods as they can before the new surtaxes or higher duties are imposed. Many Israelis who plan to go abroad later In the year are buying their tickets now and taking the $450 foreign currency allowance while they can get it.
Histadrut apparently is going along with the government’s belt-tightening measures. But Histadrut Secretary General Yeruham Meshel made it clear at an emergency meeting last night that the trade union organization expects to be consulted by the government prior to the imposition of any new restrictions. Meshel said that labor would “do its share.” But, he added, the government must not reduce the living standards of low-income families. “We shall not lend our hand to s slow-down in the economy,” Meshel said, warning that a slow-down may bring unemployment and generally difficult times for the workers.