Yaacobi Sees Long and Painful Road to Israel’s Economic Recovery
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Yaacobi Sees Long and Painful Road to Israel’s Economic Recovery

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Israel’s Minister of Economic Planning, Gad Yaacobi, expressed optimism last night that Israel will eventually resolve its economic crisis, but he warned that the road to recovery is long and painful.

Addressing a meeting of the Conference of Presidents of Major American Jewish Organizations, Yaacobi said that he believes that Israel “will have a balanced economy” two years from now. He said that the process of healing the economy has begun. He noted that the government has already taken austerity measures in that direction, including a cut of $600 million from the budget.

“We intend to cut the budget even further, despite all the risks militarily and socially,” Yaacobi said. But he added, however, that suggestions for a radical cut of the budget — by some $3 billion — are not acceptable.

“These suggestions are good for rats and mice but not for people,” Yaacobi stated, warning that a deep cut in the budget will bring mass unemployment, desertion of development towns and emigration of young Israelis. He said that out of a yearly budget of about $22 billion, Israel repays at least half in debts and interest. The budget cut must come, therefore, from the remaining $11 billion, half of which is for defense, Yaacobi said.

Claiming that the present government “inherited a very deep economic crisis” the Minister said three major factors contributed to the grave situation: The cost of the war in Lebanon, which amounts so far to $3 billion and continues to cost $200 million a year; the cost of the Camp David accords, about $6 billion, including the Sinai oil fields returned to Egypt and the redeployment of the Israeli forces in the Negev; and the 35 percent rise in personal consumption in Israel in the last five years compared to a marginal growth in production.

“The responsibility to solve the crisis is the responsibility of the State of Israel,” Yaacobi declared. But he added: “We are expecting the help of world Jewry and the government of the United States States.”

Yaacobi said that one of the burdens Israel’s economy is afflicted with is the burden of the tremendous foreign debts of $15.5 billion. But he said that despite the difficulties, Israel is going to pay all its debts. We are convinced we will pay everything on time, including the interest.”


Yaacobi noted that Israel exports goods for the yearly sum of over $11 billion. He predicted that Israel will reach “a zero deficit” in its balance of trade in four to five years.

The Minister said that Israel is looking now for “a new partnership” with world Jewry, with emphasix on increased investments by Jews in Israel’s economy. He called on American Jews to “invest, trade and aid Israel,” adding: “This is my scale of priorities.”

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