Page lO-The Canadian Jewish News, Thursday, September 20^ 1984
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Opinion
Ghamber official seeks economic answers
seconorny
.By;. MELVINC. ZWAIG Acting President Canada-Israel Chamber of Commerce
it has become the norm in recent years to take for granted Israel's ability to prosper despite triple digit inflation, a $21 billion (U.S.) foreign debt and a military budget that consumes fully one-third of the country's GNP. '
Casual visitors to Israel are often dazzled by the apparent consumer driven prosperity — VCRs, color TVs, late model automobiles and crowded restaurants, etc.
To call this a mere facade would be an oversimplification. Israeli politicians and businessmen point out that the Comprehensive indexation system makes Israel's economy unique, rendering it incapable of analysis on the basis of criteria used forjudging other'economies. Certainly, in recent years, indexation has allowed the average Israeli to enjoy unprecedented personal prosperity, his wages protected against the worst ravages of what is novv an almost 400% per annum rate of inflation.
However, in helping to shield disposable income, indexation has encouraged a boom in consumer spending based on an inflationary mentality which holds that consumer durables will retain their value better than money in the biaink.
Until the latter part of 1983, this unique Israeli system operated quite successftilly. Exports, which are iat the core of the country's economic development, had managed to exhibit steady annual growth rales, with particularly encouraging developinients in industrial high, technology products. Optimistic projections suggested that export growth would all but completely close Israel's trade gap by 1990.
Unfortunately, the World (economic recession of 1981-82, coupled with the Israeli government's decision to weaken the linkage between the rate of devaluation of the shekel and the rate of inflation, dealt Israeli exports a severe blow. Export sales declined, due to poor demand caused by international economic austerity and the reduced competitiveness of
Israeli products,
While this was happening, Israeli consumers were flnding that imported products had become relatively cheaper. The result was a dangerous widening of Israel's trade gap, a rapid depletion of the country's foreign reserves and ultimately, the collapse of the stock market when investors rushed to liquidate their stock and to purchase foreign currency in the belief that a drastic devaluation of the shekel was imminent.
The inconclusive results of the recent election delayed any comprehensive government-led assault on Israel's critical economic problems. Israel's foreign currency reserves fell by $351 million (U.S.) in July to stand at just over $2 billion. This leaves sufficient reserves to cover only
two months' worth of imports and is well below the long-standing "red line" minimum of three months of reserves. _2
In the U.S., officials are watching the situation carefully. The U.S. is waiting for Israel to come up with a plan to tackle its economic crisis. The degree of seriousness with which Israel appears to be addressing its problem will affect the way in which Israel's aid requests are handled.
The options open to a new Israeli government are limited. A dose of "Reaganomics" involving drastic deflationary measures would seem to be a possibility. However, the resulting unemployment would be an unacceptable consequence of such measures because it could lead to large-scale emigration.
The only solution is to continue fiscal restraint with a major new expprt drive. Existing markets must be enlarged and new markets opened up.
At present, Canada-Israel trade totals a meagre $182 million in both directions. Israeli exporters tend to discount Canada's potential and do not make the necessary effort to create and pursue opportunities here. The Israel Trade Commission, Canada-Israel Chamber of Commerce and the newly established Canada-Israel Institute for Industrial Research and Development stand ready to help but they are hamstrung if Israeli exporters do not exhibit any interest in using their services.
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CARL ALPERT
The results Of Israel's elections were pretty awful . . . but there were some light moments as ■ well.
Which Paper Do You Read? According to Haaretz: On election day a young lady in Tiberias stripped to the waist opposite the polling stia-tion and did a belly dance, with Labor Party stickers across her chest. The Likud protested. According to Yedoit Ahronot: On election day a young lady in Tiberias stripped to the waist, and pasted Likud labels on her nipples. The Labor Party protested^
Mystery and JExpIanation: One of the mysteries in the election results was the vote for Meir Kahane in many Arab villages. For example, Umm Ei-Fahm, 8 votes for Kahane; Baka Al-
Garbiyai, 5 votes; Kafr M'rar, 10; Beersheba Bedouin precinct, 21.
Who did they think they were voting for? One explanation: Arabs deliberately voted for Kahane to blacken Israel's reputation abroad.
Father's Instructions: A boy in KiryatMotz-kin argued with the precinct election officials that his father, who is abroad, had authorized him to vote in his stead. The boy brought a written ord-•er signed by his father, but the officials refused to permit the proxy. "How can I tell my dad that I failed him?" wailed the lad.
It's the Price Not the Politics: In Mitzpe Ramon, a Likud stronghold three years ago, the Labor candidate was encouraged. This year they did not throw tomatoes at him. He was qiiickly disiUusioried. "Who would throw tojnatpes when they are so expensive," one of the townpeople 4old him.
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By
SHELDON KIRSHNER
The mystery of the Red Sea mines remains unsolved.
Since early July, some 17 ships have hit mines in the Red Sea — one of the world's busiest shipping lanes — and in the Gulf of Suez,
Despite mine sweeping operations by Egypt, France, Britain, Italy, the U.S. and the Soviet Union, no mines have been found to link the explosions to any definite source.
President Hoshi Mubarak of Egypt, having accused Iran of being the culprit, backed off after the AyatollahRuhollah Khomeini denied complicity and denounced the mine-laying as contrary to the teachings of Islam.
However, the Egyptians believe that Libya is almost certainly responsible for the misdeeds.
The Libyans, denying the charge, have described the mine-clearing operatioii as an 'Mmperialist-Zionist plot," and have urged the Arab world to "foil'' it.
Taking their cue from Libya, the Soviets, who've seen of their ships damaged by a mine; have declared that the U.S. has used the occasion to turn the Red Sea and the vicinity into an American lake." Egyptians, for their part have said that the U. S., France, Britain and Italy were conspiring to create a new multinational force in the region to replace the one in Lebanon which broke up last winter.
The Egyptian dissidents, who belong to the leftist Union Progressive Party, have said that the U.S.—and Israel—helped plant the mines to justify a Western military buildup in the Middle East that would transform the Red Sea into an Amencan-Israeli zone of influence.
In spite of these fierce accustions, the Egyptian government has not been cowed into scaling down the scope of the continuing investigation. Esniat Abdel Meguid, the foreign minister, said that the hunt for mines was "open ended" and that Western forces were welcome to stay.
Although responsibility for the explosions has been claimed by the Islamic Jihad, the same organization that claimed credit for last year's
Hosni Mubarak . . . Egypt's president
bombing of U.S. Maiine headquarters in Beirut, experts are inclined to look elsewhere.
First, the existence of Islamic Jihad has never been confirmed.
Second, the evidence appears to point to Libyan culpability.
According to Egyptian authorities, a Libyan vess.sel, the Ghat, entered the northern end of the Suez Canal on July 6 and declared that it was carrying weapons and general cargo.
The ship then passed through the canal without being searched, traveled down the Gulf of Suez to Ethiopia, where it unloaded its cargo, and headed back to the canal.
The trip, which normally takes four to eight days, took 15.
Given Libya's hostility to Egypt, Cairo drew its conclusions.
Libya's Leader, Muammar Qaddafi, has been hostile to Egypt ever since Anwar Sadat went to Jersualem in 1977 and signed a peace treaty with Israel two years later.
In exacting revenge for Egypt's betrayal of the Arab cause, Libya has cut its diplomatic relations with Egypt and has fought a brief border war with the Egyptians.
If Libya is really behind the explosions, the Libyans may have deliberately chosen the target to hurt Egypt. The Suez Canal, which was opened in 1869 but closed between 1967 and 1974 as a result of Arab-Israeli wars, is crucial to the Egyptian economy. If Red Sea shipping is tampered with, the future of the canal could be in doubt. The canal generates annual revenues of more than $1 billion.
So far, the mines have not interfered with canal traffic.
Indeed, the mine menace may even be over. Lloyd's List, the British insurance exchange's daily newspaper, has reported that all the mines planted may have been exploded.
In the wake of this report, the Egyptian navy said that Western minesweeping missions have come up not with mines but with pipes, oxygen cylinders, oil drums, wire coils, a cupboard, a torpedo and a bomb dating back to World War I.
Israel, having watched developments carefully, has said it will deal with any real threat to the Red Sea, its lifeline to Africa and Asia.
In the past, Israel has gone to war to protect its vital shipping lanes. It will be recalled that one of the causes of the Six Day War was Egypt's announcement that it had closed the Gulf of Aqaba — which leads to Eilat.
Meanwhile, Israel is developing a response to what its naval commander saysisa "dramatic" challenge from the sea that is expected to be mounted by the Arab confrontation states over the coming decade.
Ze'ev Almog told reporters recently that its Arab enemies would be able to deploy more dian 100 vessels in the Mediterranean Sea by 1994.
Israel, he said, was building a new missile boat, the Saar 5, to counter the potential threat, and tightening coastal security.
A Hard Day's Work: Long after the polls had closed, no report had been received from Tel Aviv precinct No. 935. Police, who were sent to investigate, discovered that the precinct chairman, exhausted from his long hours on duty, had taken the results home with him and had gone to bed with them. The totals were quickly recovered.
Moshe Kapayr: The hard facts of political life here — in Israel the affluent tend to vote for the Left, and the working class for the Right.
Prisoners' Rights: A group of prisoners appealed from jail to the courts for the right to exercise their privileges as citizens and to vote in the elections. The High Court of Justice ruled there was something to their request, but called upon the Knesset to pass the appropriate legislation covering such cases. This year, the court ruled, no vote.
A Labor propagandist nevertheless spread the report that many prisoners had actually voted, and the results, smuggled out of jail, showed that all the criminals were for the Likud.
High Tension: The most thrilling expectancy was that Menachem Begin would come out of retirement, and at the last moment sound a,stirring call to his followers to vote for the Likud.
Labor prepared a number of alternative courses of reaction. One of them had former President Navon appearing on TV, calmly welcoming Begin back to political life, and then in matter-of-fact fashion, narrating for him all the awfiil things the Likud had done to the country since Begin had gone into seclusion.
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Begin never appeared, and Navon never made the speech, which had already been taped.
Voting by the Clock: In the Arab village of ■ Deir Hana there was fear of bloodshed if members of two feuding clans showed up to vote simultaneously. It was agreed that members of one clan would vote in the morning, and the others only in the afternoon. Peace was maintained. .'■ J
In the Bedouin precincts in the Negev,only males voted during the day; females came out to vote only in the closing hours.
How Much is a Non-Vote Worth? The Neturei Karta of Meah Shearim, who do not recognize the government, carried on a campaign to urge people not to vote. According to one report, they paid 50 shekels to any Jew who for 24 hours would deposit with them his identity card, without which he could not vote.
The Camera Never Lies . . . Much: The general level of the pre-election commercials on -TV was not high, but credibility of Labor sank to new lows when several of their presentations were ' 'exposed'' by the Likud as deceptions.
For example, the Labor voice caustically attacked the Likud government for policies which -were resulting in industry after industry going to rack an3^uin. The picture showed scene after scene of twisted, rusted frameworks, a ruinous sight indeed.
The next night the Likud videocast revealed that the Labor pitures had been shot in the scrap iron junkyard of the steel mills.