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Ehrlich Says Sadat’s Visit Improved Climate for Investments in Israel

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Finance Minister Simcha Ehrlich said last night that the visit of President Anwar Sadat of Egypt improved the climate for investments in Israel by lessening tension in the region. He also forecast full employment and less government spending during the year ahead, in a detailed economic survey given at a meeting of the Liberal Party Executive here.

Ehrlich, whose new economic program instituted last month sent prices soaring and raised fears of unemployment, said there was actually a surplus of 20,000 unfilled jobs in Israel. He said the increase in the country’s foreign currency reserves gave further assurances that no one would go jobless. Although some factories and workshops may be forced to close as a result of the new economic program their workers will be absorbed easily by other enterprises seeking more man-power, the Finance Minister said.

He said the government will abide by its decision to freeze hiring for two years and predicted that the number of public employees will decrease by 15 percent even though 800 more policemen will have to be recruited. Ehrlich defended the IL 182 billion 1978-79 budget approved by the Cabinet this week but criticized by many economists who claimed it was inflationary. He said it was not possible at this time to make major changes in the budget structure inherited from the previous government.

Ehrlich said that one-third of the budget–IL 60 billion–is earmarked for debt servicing and another IL 60 billion for defense, which is irreducible. Only the remainder is subject to maneuvering by the government, he said.

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