Shamir’s Economic Advisor Named to Top Finance Ministry Post

Recent ferment in the Treasury over what critics call “election economics,” emerged today with the surprise announcement that the Cabinet has appointed Nissim Baruch, Premier Yitzhak Shamir’s economic adviser, as the new Director General of the Finance Ministry.

He will replace Dr. Emanuel Sharon who resigned suddenly over policy differences with Finance Minister Yigal Cohen-Orgad. Sharon joined the Ministry only a few months ago. Treasury sources said he quit because he was unable to adapt himself to Cohen-Orgad’s “disorderly work habits.”

It was Sharon who leveled the charge of “election economics” and his criticism is said to be shared by other Treasury officials who are disturbed by what they perceive to be deviations from tough economic policies by the government in order to appease voters in the upcoming Knesset elections. Cohen-Orgad, who replaced Finance Minister Yoram Aridor earlier this year, undertook an austerity program to fight Israel’s soaring inflation rate, its widening balance of payments deficit and dwindling foreign currency reserves.

So far this year, inflation has been rising at an alarming rate. Nevertheless, the government has recently taken decisions that the budget division considers costly.

Immediately after today’s Cabinet session, Shamir met with Cohen-Orgad and the new Director General of his Ministry to discuss economic policy in light of the election campaign. The voting is little more than a month away and Cohen-Orgad has already promised to submit a bill in the Knesset to ban a proposed economy move that would affect personal savings.

Nevertheless, most observers are convinced that after the elections, should the Likud government still be in power, it will have to initiate drastic measures to avoid an economic catastrophe.