Israel won the 1948 Arab-Israeli War. However, despite winning the war against the Arab nations, having to fight the war right at its creation had left Israel’s condition weak. All the resources of the country had come under strain due to the colossal war expense. At the same time, the number of Jews immigrating to Israel was increasing day on day. It became necessary to plan for their rehabilitation. While making the declaration of Israeli independence, David Ben-Gurion had termed Israel as the rightful homeland for the Jews. However, it called for massive hard work to bring this statement into reality.
The land that had come Israel’s way during the partition effected under the United Nations had very less fertile or arable land with most being barren desert tracts.
Under such adverse conditions, Israel began taking its first steps. However, the challenges that stood in their way meant a very rough journey ahead for this nation.
Firstly, the inflow of the Jewish immigrants had almost doubled the Israeli population in a period of just 2-3 years, but the available resources and their numbers had remained the same!
Besides, despite the fact that all the immigrants were essentially Jews, they had come from diverse circumstances and backgrounds. They had spent many generations at the places from where they had come. Thus, they had the local culture and customs imbibed in them and were obstinate about their adherence. Moreover, the Jewish population also included those identifying themselves as leftists, socialists, orthodox and other ideologies. Making a homogenous Jewish society out of all these people thus posed an enormous challenge. However, it was only because of the firm, insistent and pragmatic leadership of David Ben-Gurion, a leader who though somewhat tilted towards socialism but nevertheless worked only for the national good, who took everyone along and believed in traversing the middle path, that Israel faced and resolved the issue to a reasonable extent.
However, with an exchequer almost emptied by war, Israel worried about the money needed to surmount these problems. Despite the Jewish diaspora continuing to remit aid to Israel, the sheer scale of the matter made these funds look insufficient. Where even a wealthy, developed nation could have found it difficult, for a newborn, poor nation of Israel, the test seemed impossible to clear. An already precariously placed economy had begun to see a further downward spiral. It resulted in a shortage of daily necessities and a rise in unemployment. The foreign exchange reserves too began to fall rapidly. The exports stood at one third compared to the imports. By 1951, even foreign banks and gas companies started restricting their advances.
As a solution to this, firstly, the ‘austerity measures’ were implemented. Under these, steps like avoiding unnecessary expenses for the government and the social sectors, controlling and ‘rationing’ of the daily necessities and other items took effect.
At the start, rationing was implemented only for food items like oil, sugar, butter, etc., but later, after realizing the situation, even things like furniture, footwear, etc. were rationed. A citizen, each month, would get food coupons worth 6 Israeli pounds, enough to have food that provided 1600 calories daily. Provision for additional food was made available to homes with children, elderly and pregnant women.
For the proper implementation of the austerity measures right till the grassroots, a new ministry, the ‘Ministry of Rationing and Supply’ was created. Besides, to check black marketing of the rationed items, a separate department, the ‘Office for Fighting the Black Market’ was set up.
Though the austerity measures proved beneficial to cut out the unnecessary expenditure, it did not increase the revenue even as the flow of Jewish immigrants continued. The system of rationing too faced an increased load. However, the austerity measures ensured that at least a bare minimum standard of living for the Israelis was maintained. Moreover, the Israeli government succeeded to a considerable extent in rehabilitating a large number of immigrants who had come during this time.
However, the plan failed financially. It led to a largescale increase in unemployment, inflation and government debt. Loans from banks somehow sustained this entire set-up.
However, the plan did not prove viable after some time. And then Prime Minister Ben-Gurion came up with an out-of-the-box idea.
Basically, why were the Jews returning to Israel? The immigration resulted from the social neglect, severe persecution, ethnic discrimination that they faced in their respective countries of residence. And among all, the Jews returning from Europe that too specifically from Germany had to bear most of the brunt. The Jews saved from concentration camps had to further face confiscation of their property, jewellery, money, etc. before leaving the country.
The conditions had changed after World War II, and Germany who had lost at war got partitioned into two – East Germany and West Germany. East Germany came under the Soviet Union and had a pro-Soviet communist administration. On the other side, West Germany came under the western, capitalist nations of the United States, Britain and France. West Germany had begun to achieve good progress under these nations. At the highest levels of the German government, regret had started to get expressed, for the atrocities committed before the world war against the Jews by the Nazis in Germany.
Taking together into consideration the changed situation and the insufficiency of the austerity measures, Ben-Gurion then presented a practical and realistic plan….(To be continued…)