ANXIETY IN ISRAEL

Press, Volume LXXXIX, Issue 26987, 12 March 1953, Page 9

ANXIETY IN ISRAEL

Deterioration Of Economy

(Special Correspondent N.Z.P.A.) (I fe- 9 P m ) LONDON, March 11. ♦u » plight of Israel is discussed by the Jerusalem correspondent of the “Daily Telegraph” against the background of the desirability of having Israel as a member of the Middle East Defence Organisation. He says that in spite of five years of unremitting labour, the State of Israel is in probably a more serious economic and political situation today than at any time since the end of the Arab War in 1949. “The growing confidence of the Arab League and many doubts, spoken and unspoken, which are felt in Jerusalem are symptomatic of the deterioration in Israel’s affairs. The foundation of the Israel State was a gigantic gamble and it was always realised that years would be needed to establish a selfsupporting economy. But the economic pump is taking longer to prime than had been foreseen.

No less than seven-eighths of the total income of Israel is derived either from American grants, in aid or from subscriptions, and from bond purchases by Jews in the free world. Eighty-five per cent, of the subscriptions come from American Jews. “The drain on American Jewry has ■been severe and continuous and theft has been a noticeable falling off in subscriptions. Israel’s costs are mounting and in addition to building new settlements and cities, defence expenditure amounts to between one-quarter and one-third of combined ordinary and special budgets. “Israel’s imports for 1952 are estimated at about £48.500,000 against exports worth under £5,500,000. This represents a considerable increase in imports over the 1951 figure, while exports are static or even falling. “After the breach with Russia, Israel is now, politically as well as economically, entirely dependent on the high policy of Washington and London. At the same time Soviet antiSemitism has strengthened the already strong Arab hand. Claims of Arabs It is feared in Jerusalem that the" urgent need to establish defences in the Middle East against a possible Soviet south-westerly drive, the desire to protect British and American oil interests in the Arab States, and the issue of bases in the Suez Canal Zone and elsewhere may combine to make America and Britain enforce at least some of the Arab claims against Israel.

“The Arab States have never recognised the existence of Israel and Arab spokesmen continue to reiterate their intention'of one day ‘hurling the Jews into the sea.’ “Israel had hoped that by doggedly maintaining her position she could ultimately induce the Arabs to accept the fait accompli of Israel. But there is no sign of any such acceptance. There is a considerable body of educated and intelligent Israel opinion which would welcome an ‘imposed’ American or British and American solution of the Arab-Israel dispute for which no Israel leader need accept responsibility, but which would at least create stable conditions and end the present period of incessant strain.

“It is thought that this might be possible in conjunction with the proposed Middle East Defence Organisation. If some form of Middle East Defence Organisation could be established in which Israel might be linked direct with headquarters and would not at first directly collaborate with Arab forces it is conceivable that the local tension could gradually be reduced.

“Although not prepared for major territorial sacrifices, Israel would almost certainly agree to a number of frontier ‘rectifications’ in the interests of more harmonious relations with the Arabs.

Granting of Bases Similarly if bases were needed on Israel territory (and conditions are not propitious for anything on an ambitious scale) Israel would be likelv to swallow her dislike for the idea of foreign troops on her soil in view of the guarantee against Arab irredentism which such bases would imply. The chances of such a settlement must depend to a considerable extent on the current negotiations between Britain, America, Egypt, and the Jordan. Something on these lines might possibly emerge as a corollary to the foreshadowed withdrawl of Britishtroops from the Suez Canal Zone. “A Middle East Defence Organisation which surrounded, but did not inelude, Israel would be a crushing blow to Jerusalem and the Tel Aviv Government.

It seems certain that Israel would go a long way to avoid such a development which would be one more millstone round the necks of 1,600,000 Israelis in their struggle to remain economically and politically above water.’’