Export-import Bank Official Says Israel Uses Dollar Loans “wisely”; Cites Achievements

The belief that “Israel will succeed in her economic program” was expressed here by Sidney Sherwood, secretary of the export Import Bank of Washington, speaking on economic problems in the Middle East before the Institute for Israel and the Middle East at Dropsie College.

Few of the 40 countries of the world that have borrowed from the United States, “have used their loan dollars more wisely or meticulously” than Israel, Mr. Sherwood said. He warned, however, that “one basic fact” continues to challenge Israel.” Even with the phenomenal progress made thus far in increasing the output of farm and factory, the increase in Israel’s productive capacity is not keeping pace with the increase in her population,” he emphasized. “Until this gap is closed, Israel will continue to maintain her balance of payments only in precarious equilibrium through foreign contributions and investments,” he added.

Discussing the $135,000,000 loaned to Israel by the Export-Import Bank, Mr. Sherwood reported that $70,000,000 was used for the establishment of new farms, equipping and expanding old farms and the construction of fertilizer plants; $20,000,000 for expansion of existing industries and establishment of new ones; $20,000,000 for transportation and telecommunications; and $25,000,000 for housing and community facilities.

The secretary of the Export-Import Bank pointed out that in the two years which have elapsed since the first credit of $35,000,000 for agricultural development, Israel has invested twice that amount or the equivalent of over $70,000,000. “These funds,” he said, “have been used for the development or expansion of about 20,000 farms. Israel’s food supply has increased approximately 50 percent in the two years since the beginning of the Export-Import Bank program.”

SAYS EMBARGO ON TRADE WITH ISRAEL IS HURTING ARAB LANDS

Mr. Sherwood also revealed that more than 300 separate Israeli firms, large and small, have received loans under the $20,000,000 allocated from the credit for industry. The total invested capital of these firms is four times the amount of the loans, he stressed. “Out of the Export-Import Bank funds, the port of Haifa has been enlarged and equipped with cranes and other handling equipment which increased its capacity by reducing the turn-around time of ships which formerly had to lie at anchor for long periods awaiting a berth at the pier,” he reported.

The Export-Import Bank official, who is considered one of the foremost American experts on the Middle East, said that the existence of a large number of Arab refugees is a bar to permanent security for both Israel and the Arab countries. “Their integration into the life of the area,” he declared, “is as essential for the security and economic development in Israel as it is for the surrounding Arab countries.” He emphasized that the Arabs are economically dependent on the Israelis and the Israelis on the Arabs.

Mr. Sherwood said that the embargo on trade with Israel is hurting and holding back the economies of the Arab countries as much as it is harming Israel. He cited a number of cases indicating how Jordan, Syria, Lebanon and Iraq are affected by the economic boycott which they maintain against Israel. Pointing out that “nowhere is the adverse effect of the embargo more striking than in the case of potash from the Dead Sea, “he declared:

“Here lies a great potential resource which, with the coming of real peace in the Middle East, can become one of the principal sources of foreign exchange for both Jordan and Israel. Until these arbitrary restrictions on normal commercial intercourse between the countries of the area are removed by agreement, economic development will be restricted in the Middle East.”