Help on the Way

While it did very well in its most recent military endeavors, Israel needs economic help. Last week more than 450 leading financiers, manufacturers and economists from 29 countries jetted to Jerusalem for talks on building up Israel's private sector. When the four-day conference ended, Premier Levi Eshkol could declare without over statement that it had "surpassed our most optimistic expectations."

The "millionaires' conference," as it was called, was almost as evangelical as it was economic. British Banker Sir Siegmund Warburg announced a new holding company that would pump an initial $100 million in capital into Israeli businesses. Sir Isaac Wolfson, head of Britain's Great Universal Stores, personally got fellow delegates to sign individual pledges of $24,000 to set up a company to insure new Israeli enterprises. Retired Republic Corp. Chairman Victor M. Carter pronounced himself "happy and satisfied" with a personal $2 million investment in Israel, then produced plans for $30 million worth of new projects involving Itek and other U.S. companies. Such was the entrepreneurial zeal that, during one committee session, a Manhattan businessman jumped to his feet to cry: "I want to buy 100,000 pairs of women's hose here. Who will sell them to me?"

The moneymen were elated over Eshkol's plans for enabling Israel to pay its own way in the world after 20 years of living mostly on bonds and aid from abroad. The country intends to increase overall production by 40% over the next four years and to raise exchange-earning industrial exports by 60%, to $725 million a year. Finance Minister Pinas Sapir frankly called on the visiting group to use its "know-how and connections" to raise much of the $750 million in new capital that would be needed to do the job by 1971.

Brutal Diagnosis. The need is urgent because Israel's economy has been ailing for months. During its early years of headlong economic growth--at average rates of 9% a year--Israel's imports raced beyond its exports, resulting in a chronic balance of payments deficit. To right the balance, the country in 1965 resorted to a tough dose of economic mitun (restraint), which slowed inflation, though at the cost of a standstill economy and mounting unemployment (now 8%) in Israel's 927,000-man labor force. Mitun was a casualty of the Six-Day War, as Israel was forced to simply print most of the war's $1 1/4 billion cost (though $550 million later flowed in from worldwide contributions).

When he called in 50 businessmen for an economic conference soon after the war, Eshkol got a brutal diagnosis of the country's ills. They complained that exports were hopelessly hobbled by high taxes, government meddling and Israel's undisciplined labor force. More serious, they said, was the fact that Israel could never hope to attract more than sentimental investment in its private sector while its socialist system encouraged control of 24% of the nation's overall production by Histadrut, the nationwide labor confederation, and government ownership of such key industries as aircraft and mining.

Last week Israel made it clear that private enterprise would be welcome. Finance Minister Sapir drew cheers when he announced a two-year wage freeze and such investment inducements as tax breaks, merger assistance and even credit for apartments purchased by foreign businessmen. To show that he means what he said, Sapir also put four state-owned banks, plus the country's electric utility company, on the block for sale to private investors.

This file is automatically generated by a robot program, so reader's discretion is required.