Jewish Agency Hit by Cash Shortage Caused by High Cost of Soviet Aliyah

The Jewish Agency for Israel has stopped paying many of its bills as a result of the huge operating deficit run up by the enormous cost of the Soviet aliyah.

“A lot of people are screaming now for their money,” said an agency official who requested anonymity, “but we have to take care of the immigrants before we pay our suppliers.”

The agency pays the cost of transporting the immigrants and their luggage to Israel, as well as 25 percent of the absorption grant they receive during their first year in Israel.

Officials say that many regular Jewish Agency programs that are not connected to the Soviet aliyah, such as Project Renewal, are grinding to a halt because of the cash shortage.

The agency, which depends on a steady flow of contributions from Diaspora Jews to maintain its programs, now lacks $120 million to cover the cost of programs approved for this year’s budget. In addition, it has run up a $40 million overdraft to pay bills that cannot be put off.

“The main problem,” according to Neale Katz, head of the Israel office of the United Israel Appeal, “is that there have been many more Soviet immigrants than anticipated.

“The problem is not due to a poor cash flow from the campaigns,” Katz explained. “The United Jewish Appeal has sent the cash to the agency that it promised from Operation Exodus, and contributions from the regular campaign are about what they should be this time of year.”

UJA, which funnels its funds through the United Israel Appeal, is the Jewish Agency’s chief source of income. Its second largest source is Keren Hayesod, which raises funds from Jews in Diaspora communities outside the United States.

The agency’s initial budget was based on a projected Soviet aliyah of 70,000 for the 1990-9 fiscal year, but now some 220,000 immigrants are expected. It was known months ago that the aliyah would exceed initial projections, but little action was taken to cut regular agency programs to free up more cash for the immigrants.

Agency officials say that major cuts will have to be made in its regular programs for next year, including rural settlement and youth aliyah They say it also will be necessary for the agency to take out more loans. The agency’s long-term debt now stands at $450 million.

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