The Israeli Government intends to lower the cost of living by 25 percent within the next few months, Eliezar Kaplan, Minister of Finance; told the Knesset last night. He emphasized that the high cost of living is frightening away investors and constitutes an obstacle to development of the country.
The Israeli Minister estimated that the Jewish state will this year have to import $180,000,000 worth of goods, including $100,000,000 for essential commodities. It is therefore imperative to restrict the import of non-essential goods and to develop Israeli exports to the largest possible degree, he declared.
The chief problem facing Israel, he pointed out, is the need for increasing production in order to halt the inflationary trend in the country. Schemes for the use of savings which will be accumulated through the reduced cost of living are now being formulated, he said. The government is planning to increase production and encourage foreign investment by lowering import duties on building materials, cement, and on certain types of machinery.
Mr. Kaplan emphasized that the budget of $111,000,000 submitted yesterday to the Knesset for approval was only tentative, since Israeli policy oh foreign trade was fluid and the fight against inflation had only just begun. He told the Israeli parliament that it was imperative to float additional credits for purposes of launching various development and income-producing projects. He warned, however, that current state expenses could not be absorbed by these loans and would have to be met by taxes.
The Israeli Minister stated that utmost efforts are being made by the government to raise funds within the country for the increased budget and to consolidate the economy of the country. The additional proposed taxes, he declared, may give the government a revenue of about 37,000,000 pounds.
Samuel Koffer, special adviser to the U.S. State Department’s Near East and African Affairs Division, last night called at the Israeli Foreign Ministry, accompanied by the counselor of the American embassy here. Mr. Koffer, who proceeded to Jerusalem today, was received by the chief of the Ministry’s North American section.
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