Israel Ministers Discuss Means to Readjust Country’s Economy

An urgent meeting of the Israel Cabinet Ministers responsible for economic affairs was held in the Premier’s Office today under the chairmanship of Mr. Ben Gurion. Culminating a day of consultations among the various Ministers, the meeting was devoted to ways and means of readjusting Israel’s economy, particularly its foreign currency budget, to the new situation created by the State Department’s suspension of economic aid to Israel.

It is understood that the Ministers decided that since funds expected from U.S. grants cannot be replaced, Israel must find some of the funds elsewhere and must tighten its belt to the extent substitute funds cannot be found. For additional funds the Israel Government will have to look to the United Jewish Appeal and the sale of Israel Bonds, economic circles said.

In the belt tightening process, various developmental schemes will have to be cut back, it was pointed out, with consequent increase in unemployment and the possible imposition of controls on imported products which have been decontrolled in the past year, However, it was noted, Israel’s supply of such goods is better this year than it was last year. It will also be necessary to increase Israel’s agricultural and industrial output immediately, the Ministers stressed in their discussions.

Circles close to the government emphasized that while the suspension of American aid was unexpected at this time, the Israel Government had been looking to the time when American foreign aid grants would be drastically reduced or completely eliminated.

These circles asserted that the American action underlines the fact that Israel cannot rely on foreign aid and must bend every effort toward the achievement of economic independence in the shortest possible time. Israelis must be ready to suffer as part of their struggle for political sovereignty and their right to follow any policy which they consider correct, these circles declared.