The Economics of Israel
Israel, says her Prime Minister, has the triple task of preserving her security, absorbing all the immigrants who wish to enter, and maintaining a "decent standard of living." These aims he described as " apparently conflicting," and there can be no doubt that Israel is riddled with inherent contradictions which would certainly prove fatal to an organism less robust and self-confident than this has
, shown itself to be. Israel has already brought in more refugees than she can absorb. Moreover Mr. Ben Gurion admitted the funda- mental conflict in Zionism when, in the same breath, he welcomed the thousands of Jews who are rushing to establish homes for them- selves in Palestine and warned them that they were dependent for their existence on the generosity of their fellow Jews who continue to prosper in Gentile lands. But even with this steady infusion of fresh capital, Israel's economic position is-precarious. During the past few months the real gravity of the situation has been to a certain extent camouflaged by the seasonal employment for unskilled labourers which the citrus harvest always provides, and by the expropriation of Arab lands and homes. Now it is hoped to ward
off bankruptcy by those time-honoured expedients, an export drive and austerity. The first, to be successful, requires peace, and this need accounts for the unsuspected patience—it can hardly be called moderation—which Israel has shown in the armistice nego- tiations with her neighbours. But beyond this it means that her goods must be able to compete in the world's markets in price and quality, and this they are incapable of doing. Austerity has now been officially introduced as an answer to the present inflationary situation in Israel, which is today more acute than in any Middle Eastern country during the war. It may help to check the present acute rise of prices, but the ominous fact remains that the existence of Israel depends on two things ; a steady flow of gift dollars from America, and the ability to settle and employ hundreds of thousands of fresh immigrants. Israel's neighbours may be forgiven for fearing that the pressure these newcomers are bound to generate will force her into adventures beyond the limits of her present conquests.
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