JERUSALEM (Oct. 4)
The Cabinet gave its formal approval today to Premier Shimon Peres’ visit to Washington next week. He leaves Saturday night and has already made it clear that he will seek aid “in renewing Israel’s economic growth” rather than stop-gap measures to alleviate the immediate economic crisis.
In briefing the Knesset’s Foreign Affairs and Security Committee yesterday, Peres also stressed that he would turn to the American Jewish community as well as the Administration for the help Israel needs.
He said he was not going to Washington “hat in hand” to “beg” for aid. Solving the economic crisis “is a purely Israeli task,” the Premier said. But he does want American support “for investment opportunities and for a resumption of (economic) growth.”
The Cabinet convened in special session today for a discussion of Peres’ trip to the U.S. Cabinet Secretary Yossi Beilin said Peres advised the other ministers that he will not ask for any specific amount of U.S. aid but would speak with Administration officials in general terms about his country’s economic future, the importance of investments and the government’s overall economic plan.
WILL NOT ASK FOR MORE MONEY
Gideon Patt, the Minister of Science and Technology who held the Commerce and Industry portfolio in the last Likud-led government, explained later that Peres was not going to Washington seeking more money. He will be asking for some kind of “re-arrangement” of the $2.6 billion in grants which the Administration and Congress approved for Israel for fiscal year 1985.
The new fiscal year began October I and, according to officials here Peres hopes the Americans will agree to transfer the approved amount to Israel in a lump sum early in the fiscal year rather than in installments spread out over the entire year. In addition, the Premier hopes for a general but firm statement of confidence by the Administration in the Israeli government’s emergency economic program.
Such a statement of confidence will boost Israel’s sagging credit rating on the world money market, Peres believes. While in Washington, he will describe to American officials in detail the measures his government has taken and plans to take to renew economic growth and increase productivity.
Peres believes that the starting point should be a firm wage-price freeze yet to be finalized by the government with labor and management. If such a measure is taken now, it would help convince the Administration that Israel is following the right course and increased economic aid will follow at a later stage, according to officials.
According to Simcha Dinitz, a former Ambassador to the U.S. and now a Labor MK, Peres will receive a sympathetic hearing in Washington, but with Presidential elections little more than a month away, the Administration cannot be expected to commit itself to long-term undertakings.
Dinitz suggested in a radio interview today, that substantive decisions will have to wait until after the inauguration of the next President in January and the convening of the new Congress.
Dinitz believes Peres’ visit to Washington is important, quite apart from the economic crisis. It will be his first visit as Prime Minister and he can expect a declaration by the President to the effect that the U.S. continues to be committed to the economic stability and prosperity of Israel.
Dinitz observed that Israel has always had moral justification to ask for American aid because it is an asset to the West in the Middle East. But Israel has no moral right to make demands simply to raise its living standards. “Much to my regret, in recent years, some of those ideas have been confused,” Dinitz said. “I am happy that we return to the basic notion that American aid is not intended to preserve our standard of living, but rather to help stabilize Israel economically.”
EFFORTS TO REDUCE INFLATION RATE
Finance Minister Yitzhak Modai said in a television interview that he hoped a package deal could be worked out among the various economic constituencies that would start to bring down the high inflation rate “within three months.” He said inflation has reached an annual rate of 800 percent.
He made it clear that the package he has in mind is a wage-price-tax freeze and if it cannot be negotiated between government, labor and management it should be imposed by various laws and ordinances. Peres himself has rejected an imposed deal and hopes a package can be achieved by mutual agreement of all parties. Modai said the government would try its best to avoid unemployment but he conceded that joblessness would grow to a certain degree.
EXPLAINING IMPORT BAN TO TRADING PARTNERS
Meanwhile, Israel is engaged in explaining its six-month import ban order to its overseas trading partners and has elicited general understanding and sympathy. The Director General of the Ministry of Commerce and Industry met today with the economic attaches of 25 countries to brief them on the measure and hear their comments.
Most of the attaches expressed understanding but some stressed that Israel must come up with a comprehensive economic plan before asking for foreign aid. The attaches of the 10 European Economic Community (EEC) member states promised that their countries would not react to Israel’s import ban with countermeasures.
Peres will be travelling to Washington with a small party of advisors, among them Cabinet Secretary Beilin and the Director General of the Prime Ministers Office, Gen, (Res.) Abrasha Tamir. He will also be accompanied by 27 Israel-based foreign journalists and television crews.
Peres told the Knesset Foreign Affairs and Security Committee that apart from economic matters he would discuss regional developments with the American officials. He said Lebanon, Syria, Jordan and Egypt were all subjects he wanted to raise in Washington in order to clarify Israel’s positions. In his briefing to the Committee, Peres rejected complaints by some Likud members that his repeated assertion that Israel is determined to withdraw from south Lebanon weakened its negotiating position with respect to Syria. Peres has said several times in recent day that a Cabinet decision on withdrawal could be pected “within a few weeks” and once decided the withdrawal process would take 6-9 months.