A total of $89,400,000 in U.S. governmental aid was received by Israel in the 1958 fiscal year, and $52,400,000 are budgeted in 1959, the American-Israel Chamber of Commerce and Industry reported totally.
This brings the overall total thus far received to $614,300,000 since the first Export-Import Bank loan was granted to Israel in 1949, the report says. It emphasizes that the figures do not include the so-called “counterpart funds,” which are the Israel pounds generated from the sale of commodities bought in the United States with grant dollars. These pounds are deposited by the Israel Government in a special account, and then released to finance projects agreed upon by both governments.
“During the past year America’s relations with Israel continued to be marked by the same degree of sympathy and understanding which prevailed during the decade preceding it,” the report stresses. “Both public and private aid from the United States, which in the past financed more than two-thirds of Israel’s $2.5 billion import surplus, continued to help Israel absorb her growing population and at the same time make progress toward a self-supporting economy.”
The United States continued to be Israel’s primary partner in trade; the U.S. is the number one supplier of imports to Israel, and the second largest customer for her exports, the American-Israel Chamber of Commerce emphasizes in its report. It points out that during the past year, outright grants-in-aid from the U.S. Government were down to slightly more than one-tenth of the $72 million Israel received in 1952. Official explanations given in Washington was that this rapid reduction mirrored the confidence of American policy-makers that Israel was in an increasingly better position to do without massive outright governmental gifts.
ISRAEL TO RECEIVE $38,300,000 IN U. S. SURPLUS COMMODITIES IN 1959
“Instead, the tendency now is to make available more agricultural surplus commodities, which are sold to the Israel Government against pounds at well below cost,” the report states. “The bulk of the pounds thus received are then loaned out for the implementation of projects agreed upon by both governments. The program of surplus sales began in 1955 with a $13 million allocation and reached $41 million in 1958. In the 1959 fiscal year, $38.3 million of this type of assistance was earmarked for Israel,” the report reveals.
Israel was also among the beneficiaries of the new Development Loan Fund set up by Congress to assist underdeveloped countries. The $15,000,000 received from the Fund so far, and an additional $5,000,000 becoming available in 1959, are also repayable in Israel pounds.
“The American Technical Aid Program, for which $1,700,000 was spent in 1958 and $1,600,000 is budgeted for this year, continued to depend on Israel for initiative and leadership, with the U. S. confining its role to assistance and guidance,” the report asserts. “Projects are specialized, as a rule, to do special jobs and to fill gaps in existing knowledge,” it explains.
U. S. JEWISH PHILANTHROPIC AID AMOUNTED TO $60,000,000 IN 1958
The report estimates that, in 1958, Israel received about $60,000,000 from the United Jewish Appeal and other American Jewish appeals for Israel. It indicates that income, from the sale of Israel bonds during the 1958-59 fiscal year amounted to $47,000,000. Israel also received a new $24,200,000 loan earmarked for water development from the Export-Import Bank in 1958, having repaid some $40,000,000 of the earlier loans to the Bank.
“Israel’s normal trade financing in the U. S. makes it the recipient of short-term loans by banking institutions and through regular trade credit channels,” the report points out. “These are supplemented also by lending on the part of special financial corporations engaged in trade with Israel, notably the trading arms of the Palestine Economic Corporation and AMPAL, on behalf of the Histadrut. Credit of this type is backed by commodities.”
American private investment in 1958 amounted to about $15,000,000, as compared to an average of $10,000,000 for the first eight years of the State. “While this figure may not seem spectacular, it must be viewed in the total perspective of private American investment abroad in the post-war years, which was decidedly on a minor scale. During the four-year period from 1949-1953, Israel ranked third among foreign countries which attracted investment funds from the U.S., if oil producing areas are excepted,” the report states.
“With a greatly improved investment climate now prevailing in Israel, there is every reason to expect that investment by private American citizens and companies will play an increasingly larger role in the country’s economy,” the report concludes.
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