,
'PI
THE DETROIT JEWISH NEWS
Friday, July 19, 1985 35
lf
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Israeli proposals as "really drastic
action."
Wallis said Israel was acting
just ahead of some economic
"cataclysm or deluge" that was
"inevitable" unless Israel under-
took these steps. He described the
Israeli proposals as "really drastic
action."
Israel, he added, was moving in
a "coordinated, comprehensive"
way to resolve its economic woes.
He said it was impossible to
have predicted exactly how much
time Israel would have had before
a total collapse.
"You can't say about things like
that," he said. "You never can tell.
It could have been any day or
longer."
Wallis said Israel certainly has
some potential for re-establishing
a strong economic base provided
that it now follows through with
these proposed measures.
"It now depends on how Israel
carries this out," he said, noting
that actually implementing eco-
nomic recovery measures has
been "a weakness" of the Israeli
government in the past.
"I think this will put Israel back
on the track it was always on," he
continued. He praised Israel's
best natural resource — "the per-
formance of its talented people."
The Wall Street Journal quoted
an unnamed State Department of-
ficial as saying: "What we have
seen suggests that they have
taken some very significant steps
towards stabilizing their situa-
tion." He added that the actions
are "stern measures that go con-
siderably beyond what they have
done in the past."
For many months, the Reagan
Administration has been urging
Israel to drastically cut govern-
ment spending, revise the bank-
ing laws to curtail the printing of
shekels to cover budget deficits,
modify the elaborate cost of living
indexation system, reduce gov-
ernmental subsidies, and impose
additional shekel devaluations to
make Israeli exports more com-
petitive.
The Administration, in recent
months, has submitted nearly $5
billion in economic and military
grant assistance for Israel as part
of the 1986 and 1986 fiscal year
budgets. Those foreign aid re-
quests are still under considera-
tion in the Senate and House of
Representatives.
The New York Times, in a lead
editorial, also welcomed the Is-
raeli decisions, but insisted that
Israel's long-term needs require
"a heavy dose of free-market
capitalism." Without it, the
newspaper said, "no conceivable
help from its friends is likely to
save it from stagnation."
The editorial, entitled "Israel's
Subtler Battle," said: "Israel has
often enough proved that it can
mobilize against formidable mili-
tary threats. Now it will learn
whether it can mobilize to meet
the sublter yet potentially deadly
internal threat. The austerity
plan announced by its Cabinet is
not likely to leave people hungry.
But it must sharply cut living
standards if it is to make a dif-
ference. Ideally, it must also jolt
into flexibility an economic sys-
tem long enfeebled by state inter-
vention."
The editorial charged that pri-
vate industry in Israel "is swad-
dled in enough regulation to make
a Bulgarian bureaucrat blush."
In the long-run, it added, Israel
will need more than simply belt-
tightening. "Non-defense gov-
ernment spending must be re-
duced enough to permit tax cuts.
Inefficient public enterprises
must be privatized. Most impor-
tant, the protections and sub-
sidies that make the government
a partner in every private com-
pany must be untangled."
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