Israel’s New Finance Minister Sees Absorption As a National Emergency

Yitzhak Moda’i, the finance minister in the new Likud-led coalition government, believes the Israeli public can be counted on to rally in a national emergency.

According to Moda’i, the emergency facing Israel now is the mass absorption of immigrants, mainly from the Soviet Union.

While he says he has no plans for harsh economic measures to help cover the costs of integrating the newcomers, he expects Israelis and overseas Jews to contribute to it in the form of a voluntary loan.

The public will be asked to show its “gratitude for the miracle of mass immigration,” Moda’i said.

Moda’i is no newcomer to the Treasury. He served as finance minister in the Labor-Likud unity government set up in 1984.

Working with then Prime Minister Shimon Peres, he reduced Israel’s triple-digit inflation to an annual rate of 20 percent. He held office until 1988, when he was ousted in a personal dispute with Peres.

Israel’s new finance minister holds a degree in chemical engineering from the Technion-Israel Institute of Technology in Haifa and a law degree from the Hebrew University. He was general manager of the Revlon company in Israel before entering politics.

Given his background as a businessman with conservative ideas, he is expected to propose economic measures that will put him in conflict with Histadrut, Israel’s giant trade union federation, which is dominated by the Labor Party.

Moda’i is expected to seek lower taxes for industrialists, reduced government spending and the sale of government enterprises.

The most controversial measure at the moment is a 5 percent devaluation of the shekel sought by manufacturers and industrialists.

Reports that devaluation was imminent have been denied, convincing financial circles they are indeed true. But a decision reportedly has been postponed until after the Cabinet is sworn in.