Finance Minister Pinhas Sapir said today that the government can and is taking steps to curb inflation. But he said it could not do much to eliminate its three basic causes–immigrant absorption, defense costs and the higher price of goods Israel imports from abroad. Sapir discussed inflation–Israel’s No. 1 domestic problem–with delegates to the Jewish Agency’s second annual General Assembly, some of whom expressed concern that their contributions to Israel were being eaten up by an inflated economy.
Sapir noted that immigrant absorption was a cardinal principle of the State. He said Israel could not control the price of goods abroad and, in the area of defense, “We will probably have to spend as much in the next ten years as we are spending now.” He said that even if Israel signed a peace treaty with the Arabs soon, it would still have to maintain a high level of defense spending. Israel, he stated, had to be strong enough so that any peace treaty it may sign “will not be just a piece of paper.”
Sapir answered implied criticism that the Israel government wasn’t doing enough to attract immigrants, especially from the affluent Western countries, and to keep them in Israel. “I think we did more than we had to,” he said. “I can’t explain why part of them (Western immigrants) went back. You’d better ask Louis Pincus (Chairman of the Jewish Agency Executive) or (Minister of Absorption) Natan Peled.”
The Finance Minister said he favored permitting wealthy Westerners to build homes in Israel. Such building is not at the expense of general housing needs, he said. Moreover, he asked “how can you ask someone to contribute to the United Jewish Appeal and Israel Bonds and then not let him build a home in Israel?” There is always the chance that he or his children might settle permanently in Israel eventually, Sapir said.
Asked if he agreed that fund-raising efforts only scratched the surface of Israel’s needs, Sapir said that not enough was being done. But he noted that no one ever expected the record-breaking contributions of 1967 to be duplicated, yet they have been exceeded in recent years. Asked why Israel was not building more pre-fabricated homes to ease the housing shortage, Sapir spoke of plans to buy 800 mobile homes on an experimental basis. But, he added, the reaction of Israelis and especially of the press to such plans was likely to be negative.
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