New Finance Minister Pledges to Cut Spending on Settlements
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New Finance Minister Pledges to Cut Spending on Settlements

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The new Israeli government’s commitment to restricting settlement activity in the administered territories was underscored here this week by Finance Minister Avraham Shohat during a meeting with a group of North American Jewish leaders.

Speaking on Sunday night to 250 participants in the Israel Bonds New Leadership mission, the newly appointed minister promised to “shift spending away from settlements in the territories toward the creation of jobs.”

Just hours after U.S. Secretary of State Baker arrived in Israel to meet with Prime Minister Rabin, Shohat said, “At this moment, the two are sitting together and discussing the political situation, the loan guarantees and the future relationship between Israel and the United States.

“Israel’s government,” he said, “is committed to shifting national priorities and the political situation in this country.”

The finance minister criticized the Shamir government’s settlement policy in the territories.

“With the last government, when the choice was between investing in housing in the territories or creating jobs and fighting unemployment in Israel, they chose to build houses in the West Bank and Gaza Strip,” he said.

“They thought that in order to reach a political solution, they had to dramatically in crease the number of Israelis in the territories. We have paid a high price for this policy.”

Shohat told the visiting delegation that the Rabin government “is going to stop building houses in such quantities.” He pointed out that three days earlier, he and Housing Minister Binyamin Ben-Eliezer had imposed a freeze on all new public housing starts throughout the country.

The freeze, which was immediately condemned by opposition factions and settlers groups in the territories, is seen as the first step toward diverting resources away from settlements in the West Bank and Gaza Strip.


According to the Housing Ministry, there are 14,000 units now under construction in the territories. As to the fate of these units, Shohat said, “We are doing a survey of housing now in progress. We want to stop whatever we can stop.”

Shohat appeared hopeful that the United States would grant the loan guarantees for immigrant absorption that Israel has long been seeking.

“I hope that the negotiations with Mr. Baker and Prime Minister Rabin’s upcoming visit to the U.S. will close this matter,” he said.”We need this money for the country’s infrastructure. We need this money to raise other money, from European countries and from commercial banks.”

Until now, he said, people have been reluctant to invest in Israel “because of the political situation and due to the feeling that there was no government policy dealing with the economy.”

The Rabin government, Shohat declared, “will put an end to these beliefs. We must work rapidly to reach an autonomy agreement with the Palestinians. We must also introduce an economic policy that will say to investors, ‘You have the chance to come to Israel and make a profit.’

“If we get the guarantees and grant autonomy to the Palestinians, Shohat said, “Israel will be a place where investors want to come.”

After the speech, Howard Goldstein, Bonds New Leadership chairman for North America, expressed hope that the United States would provide the loan guarantees.

But he added that as far as his group is concerned, “whether or not the guarantees come through, our agenda will not change.”

“Our main interest,” he said, “is to support the infrastructure of the State of Israel through bond purchases.”

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