The Dilemma of Israel
Israel's first Budget contains no evidence of how the infant State is going to make both ends meet, or (to use a phrase of which much was heard in this connection a couple of years ago) "achieve viability." This is because Israel's main. problems, defence, immigration and development, are not allowed for in the Budget, which is concerned only with government administration and services. By far the cost- liest burden which the State, will have to shoulder is the transport and settlement of immigrants, who are expected to arrive at the rate of about 200,000 a year and to entail an annual charge of at least 0250s000,000 before they start contributing anything to the revenue. As it is unlikely, to say the least, that normal sources of revenue— taxation, customs and so on—will suffice to meet more than the ordinary needs of government and some of the extraordinary defence requirements, it is obvious that Israel must remain almost indefinitely dependent on contributions from outside ; that is to say, on gifts from Jewish communities abroad, on loans, credits and such non-recurring resources as a share of Palestine's blocked sterling credits. The financial dilemma facing Israel is discussed in an article in this issue, which points to the inescapable conclusion that the only hope for the State is an improvement in its relations with its neighbours, who must, if she is to survive, eventually become Israel's main market as well as her chief source of food and raw material. At present trade between Israel and the Arab countries is at a complete stand- still and even smuggling is almost non-existent. There is still strong support among the more extreme Zionists for the belief that markets which are closed to them on principle should be opened for them, by force, and the knowledge that this opinion exists naturally makes the establishment of normal relations with the Arabs more difficult. But even if a solution to this political problem were found, the
fundamental problem would remain: how to make self-supporting a country which is almost wholly devoid of natural resources.
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