Israel’s top banker, Dr. Y. Foerder, chairman of the board of Bank Leumi Le-Israel, took the Israel Government to task today for its fiscal and economic policies and warned that unless the government mended its policies it would not be able to avert a major crisis in the next five years.
There is hardly another country in the world where government “intervenes so drastically” in the economy as in Israel, he charged. He said the government is “the greatest importer, the greatest industrialist and the greatest constructor.” Speaking to the Bank Leumi’s board, Dr, Foerder asserted that the government interference was undermining personal, private initiative. He demanded a revision of the tax structure and a cut in the income taxes, which he also held had stifled individual initiative.
Dr. Foerder asked an early increase in exports and a cut in imports, stressing the necessity of cutting the present annual trade deficit of $300, 000, 000 in half within the next four years. Other economies could be achieved, he said, by decreasing the size of the civil service staff.
Dr. Foerder underlined that by 1962 or 1963 individual indemnification and restitution payments from Germany would come to an end. This, he pointed out, would coincide with the time Israel must begin repaying the principal of the bonds it has sold abroad.
In addition to cutting the deficit in preparation for that day, the chairman of Israel’s leading bank continued, Israel must find new sources of capital. Having exhausted other sources of foreign capital, he stated, Israel must now concentrate on attracting private capital–from non-Jewish as well as Jewish sources. He asserted that while the climate in Israel has not been encouraging to private capital investments, the conditions which will bring in such investments must be sought out and created.
He praised the government for a number of moves designed to increase production, specifically of exportable items such as oranges, tourism and a number of industrial articles.
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