News Analysis: Moda’i Turnabout on Absorption a Sign of Growing Desperation

Finance Minister Yitzhak Moda’i’s dramatic announcement last week that the laissez-faire policy of “direct absorption” should be scrapped in favor of greater government intervention is a sign of his growing desperation over the impact Soviet aliyah is having on Israeli society.

In an attempt to meet the critical need for immigrant housing and jobs, the Finance Ministry reportedly has been secretly preparing a plan to build six new communities in the Negev, with housing and “industrial parks” for 400,000 people, most of them new immigrants.

The immigrants would be sent there by the government and employed in building their own housing and in other public service work, until the industrial parks are ready.

The finance minister gave no indication that there are any investors lined up to create what some see as an Israeli version of “Silicon Valley,” made up mainly of high-tech industries.

Moda’i said the shift from direct absorption to what he called “planned absorption” would take two to three years.

The Finance Ministry plan has not been discussed by the ministerial committee on immigrant absorption, the body composed of government and Jewish Agency leaders that is supposed to make absorption policy. Moda’i has made a point of avoiding most meetings of this body.

The vast majority of the 250,000 immigrants who have come to Israel since the beginning of 1990 have followed the route of direct absorption: They received a “basket” of services and cash grants from the government during their first year and were supposed to find housing and jobs on their own.

The direct absorption policy was introduced in 1988 for immigrants from “countries of distress,” over a year before the mass aliyah began. The aim was to let immigrants decide for themselves where they wanted to live and work, instead of having these decisions made by government officials.

Because of the government’s failure to plan adequately for the mass aliyah, which had been predicted by government experts on Soviet Jewry, the flood of immigrants has had a severe impact on the housing and job markets.

PLAN ALREADY CRITICIZED

Apartment rentals have risen by 30 to 50 percent in many areas, forcing immigrant families to share living quarters with one or two other families and pushing young Israeli couples into make-shift tent camps. Some of the immigrants whose initial absorption grants have run out now find themselves without jobs and in tents.

Each month, thousands of new immigrants join the ranks of the unemployed, which has risen to the unprecedented level of more than 10 percent. The number of job-seekers at the State Employment Service rose from 124,000 in March to 140,000 in April.

The Moda’i plan is apparently intended to relieve some or most of the pressure from the job and housing markets by sending new immigrants to vast camps in the Negev. There, under government care, they would be given temporary housing and public works jobs.

Modai’s announcement stirred up considerable initial criticism, especially from politicians of the opposition Labor Party.

Absorption Minister Yitzhak Peretz, an independent, dismissed the plan as irrelevant as long as there are no jobs to direct the immigrants to.

There has been no official reaction from Housing Minister Ariel Sharon, who chairs the ministerial absorption committee.

The cooperation of the Housing and Absorption ministries would be essential in implementing the shift from direct absorption to “planned absorption,” as Moda’i calls it.

In New York, the chairman of the Jewish Agency Board of Governors, Mendel Kaplan, also expressed concern with the plan, saying he is opposed to greater government intervention in the absorption process. The agency works in partnership with the government to resettle immigrants.

(JTA staff writer Aliza Marcus in New York contributed to this report.)