U.S. Plans for Aid to Israel Outlined; Reduced Scale Proposed

The Foreign Operations Administration’s proposals for the Mutual Security program for the fiscal year 1956 indicate that half of the development assistance funds for Israel will be made available on terms of repayment and that approximately half of the assistance will be in the form of surplus agricultural commodities. It is also proposed that technical cooperation projects be continued at the same levels and that a few new projects in industry and mining be undertaken.

The FOA report said “While a precise and final determination of the level of aid to Israel in fiscal year 1956 cannot be made at this time it is clear that Israel’s continued economic progress will permit the level of aid to be further reduced. In the peak year of 1953, aid to Israel under Mutual Security legislation totaled $70,2 million for economic development and $2,6 million for technical cooperation in 1954 the totals were $52 million and $1,5 million respectively, in 1955 development assistance is programmed at $40 million of which $20 million will be on a repayment basis, and $1,4 million is programmed for technical cooperation. It is proposed that the economic aid program be continued on a reduced scale during fiscal year 1956 with, however, some increase in technical cooperation.”

The report stresses that Israel’s economic progress has been “substantial” and that the success of the U.S. program to date can only be measured in terms of total Israel progress. The report indicates that Israel’s agricultural output has increased nearly #8 percent and industrial production nearly 20 percent in 1954. The annual excess of imports over exports has been reduced by about $130 million in the past three years. Exports increased by 35 percent in 1953 and by another 48 percent in 1954. The share of Israel’s foreign exchange requirements which it earned itself rose in the past two budget years to 23 percent, then 32 percent, and may reach 40 percent in 1955, the report predicts.

“The key element in this program has been the U.S. development assistance program which has supplied an essential portion not only of the development goods but also of consumer requirements such as surplus agricultural commodities which in turn makes possible a total capital investment program at a level necessary for an approach to viability.” the FOA report declares.

It adds that under the technical cooperation program. United States technicians have been instrumental in achieving a number of improvements in Israel. Among the improvements the report lists substantial shifts into kinds of crops most likely to contribute to early self-support range management work making possible a new start of the livestock industry, mineral exploration and commercial exploitation and many more.