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Special Interview Impact of Boycott on Israel

April 25, 1975
See Original Daily Bulletin From This Date

The man in charge of Israel’s campaign to counter the Arab boycott believes the boycott has done only marginal damage to Israel’s economy so far, that “it is a certain nuisance but…does not really hurt us” and has “never slowed down the rapid development of Israel, not before the Yom Kippur War and not after it.”

For that and other reasons, according to Dan Halperin, advisor to Finance Minister Yehoshua Rabinowitz, the counter-boycott campaign is relatively limited. Among the other reasons is the limited resources and manpower the State can spare for the anti-boycott campaign, Halperin told the Jewish Telegraphic Agency in an exclusive interview.

Halperin also noted that Israel was working in tandem with Jewish organizations abroad, especially in the United States, to counter the boycott. He chided some of these organizations for focussing on companies that have done and still do business with Israel while disregarding others that have never had any ties with this country.

The issue of the boycott-and-its-effects on Israel’s economy, particularly the decline of foreign investments here, arose from the fact that no American businessmen have been found yet who are willing to be named members of the joint U.S.-Israel Trade and Investment Council, a body proposed by U.S. Treasury Secretary William E. Simon during his visit to Jerusalem last year. Simon told reporters at the time that the purpose of the Council would be to draw the attention of the American business community to the fact that investments in Israel are in the common interests of both the U.S. and Israel.

Halperin said he didn’t know “what efforts the U.S. government has made to recruit” American businessmen for the joint Investment and Trade Council and conceded that any reservations about engaging in economic activities in Israel were damaging to Israel’s economy because it depended so heavily on foreign investments.


According to reliable sources, the problem was to recruit at least 10 American businessmen not previously involved with Israel. But “We find it very difficult to find ten men with guts,” the sources said, indicating that the businessmen approached feared Arab reprisals.

On the other hand, the sources pointed out, a U.S.-Egyptian joint investment committee, similar to the one Simon proposed with Israel, has already been set up under the chairmanship of David Rockefeller, president of the Chase Manhattan Bank, Avraham Shavit, deputy chairman of the Israel Manufacturers Association, stated that Israel is running out of new investments and the effects of such a trend would be felt in two years.

Halperin conceded that foreign investments have dropped by an estimated 50 percent since the Yom Kippur War. But he said it was impossible to tell how much of that can be attributed to the military situation, how much to the general economic slowdown or how much to Arab pressure, He said that in the past, certain foreign companies, such as the French Renault auto company, cut their ties with Israel and announced publicly that they did so because of Arab pressure.

But he also noted that many foreign companies on the Arab blacklist continue to do business in Israel and in the Arab world–such as the Hilton, Sheraton and Intercontinental hotel chains and the Hertz auto rental system, which operates in both Israel and Egypt. He added that the Ford and Leyland motor companies have assembly plants in Israel despite continuous Arab pressure. (According to reports last year, the British Leyland Co, is phasing out its operations in Israel.)

Halperin observed that when their own economic interests are threatened, “the Arabs managed easily to bend (their boycott) and this must be made clear to the world’s economic community.”


Although he maintained that the boycott is a “paper tiger,” Halperin said “the danger is that world business firms will not realize that it is not a strong body and will therefore give in to it….It is more of a potential danger than an immediate one.”

Halperin explained that Israel and Jewish organizations abroad, in a parallel campaign, deal with organizations that had contacts with Israel in the past but showed signs of giving in to Arab pressure. He noted that the B’nai B’rith Anti-Defamation League published a list of such companies in New York last February, accusing, among others, the Chase Manhattan Bank of surrendering to Arab pressures because it was not willing to, open a branch in Israel.

However, Halperin asked, what about banks and other economic enterprises of the same size that have never had any ties at all with Israel, unlike Chase Manhattan which acts as a financial agent for the Israel Government (Bonds) in the U.S.? What kind of campaign can be directed against them when they can refute Israeli charges by simply saying that Israel is not interesting enough business wise? Halperin asked.

The counter-boycott campaign, therefore, is directed only at these economic enterprises against which Israel and the Jewish economic community have a clear and justified case, that can be proven, Halperin said, Thus, a large economic body that never had any economic connections with Israel must be ignored, he said.


Halperin said the campaign was limited because the State can allocate only limited resources to it. He noted that despite the fact that more than a year-and-a-half has passed since the Arab oil boycott, there are at present only three persons-two at the Treasury and one at the Foreign Ministry–directly involved in the counter-campaign. He said that since the beginning of this year there has been talk of creating a special authority to organize, that campaign, but the authority has failed to materialize–for the strange reason that nobody has been found to organize it.

Halperin said several names were mentioned, including former intelligence chief Eliyahu-Zeira and former Air .Force Commander Dan Tolkovsky, but none of them took the Job. He said there were rumors this week that a prominent personality was about to undertake the assignment.

Once the authority materializes, its sphere may have to be enlarged and balanced between the natural Jewish opposition to racial discrimination in business and the natural disgust on the part of the international business community over Arab attempts to dictate the rules of the game. Israel will have to find a way to keep the Arab boycott only a potential threat and not a real one, Halperin said.

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