Israeli Finance Minister Discusses Foreign Aid Issue with U.S. Officials

In a series of meetings with Clinton administration officials and members of Congress this week, Israeli Finance Minister Avraham Shohat discussed the touchy issues of foreign aid and U.S. loan guarantees to Israel.

Shohat’s visit is being played out against a backdrop of questions relating to U.S. foreign aid practices. And the meetings came at a time when Israel is about to receive the first installment of the once-controversial package of U.S. loan guarantees for $10 billion.

The finance minister met with a wide variety of American officials, including Treasury Secretary Lloyd Bentsen, Commerce Secretary Ron Brown, Trade Representative Mickey Kantor and Deputy Secretary of State Clifton Wharton.

In addition, he met with members of Congress, including Sen. Patrick Leahy (D-Vt.), chairman of the Senate Appropriations subcommittee on foreign operations, which appropriates foreign aid money.

The Israeli Embassy here had little to say about the meetings. An embassy spokesperson said Shohat emerged from the meetings feeling the administration “understood the importance of foreign aid to Israel, especially in light of the peace process.”

While Secretary of State Warren Christopher this week reiterated the Clinton administration’s position that U.S. aid to Israel should be maintained for next year at its current level of $3 billion annually, he would not say how much aid the administration would request from Congress in future years.

At a news conference Wednesday inviting the various Middle East parties to return to the peace talks April 20, Christopher said it is hoped that progress in both the peace talks and economic reform in these countries will lessen the need for American aid.

Shohat’s visit comes at a time when American officials are less likely to look favorably on a continuation of the current system of granting U.S. foreign aid. In a political climate where Americans are being asked to make financial sacrifices, foreign aid is an unpopular topic.

In over two hours of testimony to the House Appropriations subcommittee on foreign operations Monday, Assistant Secretary of State Edward Djerejian was grilled about U.S. foreign aid by the panel’s chairman, Rep. David Obey (D-Wis.).

Obey pressed Djerejian on the issue of continuing aid to Israel and Egypt at their current levels, observing that the countries had economic problems not being quickly resolved.

Djerejian spoke positively about Israel’s efforts to improve its economy, but he said that a “serious question” exists about “moving up the pace of economic reforms in Israel.”