Israelis Encouraged to Invest in Administered Territories

The ministerial economic committee decided last night to encourage Investment in the administered territories by offering Israeli Investors the same Incentives that apply to Investments In development areas In Israel proper. The move was viewed as having political significance for the future of the territories.

The decision followed a warning by Finance Minister Pinhas Sapir on an Israel Army Radio Interview Saturday that the continued occupation of Arab territories threatened both Israeli security and moral image. Sapir said he feared that if Israel keeps the populated territories, almost half of the combined population of Israel and the territories will be Arab.

“In another 25 years there will be in Israel and the administered areas a total of 10 million inhabitants, four million of them Arabs,” he said. The Finance Minister Indicated that his Ministry never interfered with Israelis who wanted to invest In the territories. “I am of the opinion that so long as we remain there it is up to us to aid the inhabitants of the areas in building the economy,” he said. But Sapir added that investments in the territories must be controlled so that Israel is not limited in its eventual negotiations with the Arabs.

According to the plan approved last night, the territories will hereafter be classified as priority development areas eligible for the same economic incentives that apply to border settlements such as Kiryat Shemona or outlying development regions like Eilat. The incentives include special low interest loans and grants for the construction of buildings, working capital and Job training for the inhabitants. Business enterprises in the area will qualify for loans up to 50 percent of the needed working capital at the low annual interest rate of nine percent. Only 20 percent of the capital will have to be provided by the investor.