J.D.B. News Letter

(By our London correspondent)

–Starting almost from zero Palestinian industry has now reached a point at which it already plays an important part in the economic life of the country, states the report of the Jewish Agency Commission, published here in pamphlet form. As elsewhere, where cheap factors of production are absent, there develops the natural tendency to rely upon the local market and the adjoining countries for distribution of the product. There is no escape from such a reliance and in itself the process is not harmful. This is particularly important in view of the growth of small industrial undertakings, each epecializing in the production of some article for which sufficient demand is found or anticipated. It is a development closely approximating that of industry in Poland before the war. This type of development rather than large scale enterprise is becoming characteristic of Palestine. There is, however, a much narrower limit set to expansion on these lines than was the case in Poland, for the Palestine market is not protected by a high tariff wall. The Customs policy of the Government, which is not yet finally laid down, creates an atmosphere of uncertainty for Palestine industries.

It should always be remembered that Palestine is a small country, with a comparatively low purchasing power. Undoubtedly, industries, such as the cement work in Haifa, the Shemen Oil Works, and similar industries, could with slight extension of plant and personnel, meet all local needs for their products in the near future, whether these needs be Jewish or Arab. This is cited to emphasize the fact that the small area of Palestine will necessarily mean a limited maximum production. If therefore industry is to develop on a larger scale, the possibilities of export must be given consideration. Today the balance of trade is decidedly adverse. Export products presuppose native raw materials and cheap factors of production so that shipments can be sent out of the country in raw or manufactured form at a price which will compete favorably with similar produes of other countries. There is the other possibility of importing raw material and organizing by means of a skilled industry the export of manufactured products to other countries which, by reason of contiguity. etc., offer favorable conditions for profitable ventures. Palestine textiles made under modern English or American methods should be able to compete in the neighboring markets with those of any other country by reason of the shorter haul and the great experience of Jews in that branch of industry. There is practically no textile industry in the Orient and the textiles are imported from abroad.

The hinterland for the industrial Palestine are Egypt, Syria. Iraq and Hejaz. The export from Palestine to these countries is now insignificant for the simple reason that the Palestinian in dustry is very small but it is worth while to note that even this small industry is succeeding in exporting a large part of its production.

With respect to the possibilities of industrial development through the use of native raw materils the fact should be stressed here that Palestine definitely lacks certain basic raw materials such as coal iron and other metals.

While Palestine lacks certain basic raw materials, it is unique in its possession of the Dead Sea. Investigation must still determine what opportunities exist for the exploitation of its chemicals. The Dead Sea is 1,200 feet below sea-level so that problems of transportation temperature, etc., will be vital factors. To what extent Jewish labor can be employed must be determined.

An important part in the industrial development of Palestine is already being played and a still more important part is likely to be played in the future by the Hyydro-Electric schemes associated with the name of Mr. Pinchas Rutenberg. The eventual effect of the project when completed will be to make an abundant supply of cheay electric power available throughout the country thus creating entirely new and much more favourable conditions for the development both of industry and agriculture.

From various statistical records it would appear that of the 30.000 Jewish workers in Palestine about 15 per cent represent unskilled labor while the building clerical and professional classes are comparatively overcrowded. There is a pronounced r##adistribution of the Jewish working population of Palestine. The organization of labor into trade unions in Palestine is much more thorough than in most countries.The question of the Jewish and Arab standards of living and work are of fundamental importance for the future settlement of Palestine. The Arab is able to exist on an income that appears impossible to the ordinary Jewish workman, added to which he gives a much longer working day, there being no labor restrictions As a result, for some time there were striking disparities between Jewish and Arab wage rates. However, by the end of 1927 these disparties had been appreciably lessened, especially amongst skilled workers, the chief difference both in wages and hours remaining in the heavy work of unskilled labor. It is generally acknowledged that in skill and adaptability Jewish labor is superfor to Arab; hence it is more productive and much can be saved in the cost of supervision by employing Jewish workmen notwithstanding the difference in wage.

In industry, work is organized on similar lines to those prevailing in western countries, but in outdoor work, such as road building, there appears to be lack of organization as a factor for reducing costs. This is gradually disappearing and the competitive advantages of Arab over Jewish labor are not of suificient importance to retard Jewish development. Arab labor will. however, continue to be a serious competitor and this can only be mitigated by improved standards of living of the total population.