A combination of new factors and developments that emerged in the last few weeks creates new opportunities and hopeful prospects that Israel’s troubled economy may recover and eventually become economically independent.
This is the assessment of businessman Elmer Winter, chairman of the Committee for Economic Growth of Israel (CEGI). In an interview with the Jewish Telegraphic Agency, Winter said that for Israel to recover economically it has to basically increase its exports, reduce its imports, and sharply reduce its $4-5 billion annual deficit in the balance of payments.
Winter, a former president of the American Jewish Committee, listed 10 “positive developments” that, in his view, will place Israel’s economy “on the right track.” The 10 are:
* The selection of Yigal Cohen-Orgad as Finance Minister: According to Winter, Cohen-Orgad “has an orientation towards exports and investments.” The new economic measures ordered by the Finance Minister are in the right direction and will contribute toward rebuilding the country’s economy.
U.S. ‘DID NOT GIVE THE STORE AWAY’
* The new strategic and economic agreement between Israel and the United States: “The whole trend (of the agreement) is extremely favorable to Israel,” Winter said. “I do not recall a time when as much U.S. aid was offered to Israel.”
He contended that “the U.S. did not give the store away” by agreeing to increase its aid to Israel and that American support helps Israel “fulfill its role as a partner of the U.S. in the Mideast.”
Winter said that the U.S. decision to increase its grant level to Israel and the intention to establish a free trade zone between the two countries will have a meaningful effect on Israel’s economy. He also noted that the military aspects of the new cooperation agreement have positive implications for Israel’s economy because the U.S. will buy military equipment made in Israel and will invest in military-related projects in the country.
* Israel’s credit rating will be improved considerably as a result of the new agreement with the U.S.: Winter noted that Israel’s credit rating has deteriorated in the last year, making it difficult to get international loans. Now, however, its improved credit rating, due to increased U.S. grants and loans, will enable Israel to get more loans for development and investment, Winter said.
A SPUR FOR INVESTMENTS
* The devaluation of the Shekel will spur investments: Winter noted that the drastic devaluation of Israeli currency recently and the continuing creeping devaluation of the Shekel will increase investments by American and other companies in Israel, since one of the effects of the devaluation is a strengthening of the Dollar in Israel.
* The proposed budget cut by the Israeli government: “Prime Minister Yitzhak Shamir has already given his backing to the plan,” Winter said, noting that a budget cut will stem inflation and will help decrease the deficit in the balance of payments.
* Cut in subsidies: Winter noted that there is a readiness in the government of Israel to reduce subsidies “as long as the element of fairness is attached.” The cut is part of the general budget reduction by the government, he observed.
* An increase of exports: Winter said that Israel’s Finance Minister places an emphasis on exports. As a result, it is expected that Israel’s exports will increase by 15 percent until 1985. “This is clearly realizable,” Winter said.
* Reduction of imports: The new economic measures have already cut the imports of many luxury items that many Israelis purchased during the “spending spree” in the last few years, Winter pointed out.
ISRAEL IS THE IN-PLACE FOR INNOVATIONS
* The Israeli economic infrastructure is strong: Winter noted that Israel has a unique “brainpower” that is sought after by many foreign companies. “Israel is the in-place for innovations and one of the 4-5 top countries in the world for engineering and scientific development,” Winter pointed out.
He observed that Israel has a total of 20,000 scientists and engineers, a very large proportion in a country with a population of 3.5 million people. Winter said that Israel’s “brainpower” can attract many foreign investors.
* New efforts by non-profit American Jewish organizations to help Israel gain economic independence: Winter said that his organization is undertaking a campaign to enlist various Jewish groups — such as the B’nai B’rith, the Jewish National Fund, and others — to get involved in helping Israel’s economy and making their vast membership interested in Investments in Israel and in buying Israeli products.
A GOAL TO STAND BEHIND AND WORK FOR
“If there is a 10 percent growth in Israel’s exports each year and controlled imports until 1990, Israel will have a zero balance of payments deficit and will be standing on its own two feet,” Winter predicted. He added, “That is the goal we all have to stand behind and work for.”
Winter, who recently published a study, “A Plan to Make Israel Financially Independent in 1990,” concluded that such an independence is possible. His plan contains 104 recommendations leading to 50 hi-tech investments by U.S. companies in Israel; expansion of exports from Israel to $11 billion by 1990; and attracting 50 American firms to conduct research and development in Israel.
Winter noted that “Israel offers opportunities to U.S. business executives to make profits as they sell their products to European Common Market countries duty-free. Similarly, they can ship many Israeli-made products to the U.S. duty-free.”
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
