Austerity in Israel
Encyclopedia
From 1949 to 1959, the state of Israel
was, to a varying extent, under a regime of austerity
, during which rationing
and similar measures were enforced.
. Consequently, the Israeli government instigated measures to control and oversee distribution of necessary resources to ensure equal and ample rations for all Israeli citizens.
In addition to the problems with the provision of food, national austerity was also required because the state was lacking in foreign currency reserves. Export
revenues covered less than a third of the cost of import
s, and less than half of the consequent deficit was covered by the Jewish loan system known as Magbiyot . Most financing was obtained from foreign bank
s and gas companies, which, as 1951 drew to an end, refused to expand the available credit
. In order to supervise austerity, the prime minister, David Ben-Gurion
, ordered the establishment of the Ministry of Rationing and Supply
, headed by Dov Yosef
.
, sugar
and margarine
, for instance — but it was later expanded to furniture
and footwear
. Each month, each citizen would get food coupons worth 6 Israeli pound
s, and each family was allotted a given amount of foodstuffs. The diet chosen, fashioned after that used in the United Kingdom
during World War II
, allowed 2,800 calories a day for Israeli citizens, with additional calories for children, the elderly, and pregnant women.
The enforcement of austerity required the establishment of a bureaucracy of quite some proportions, which nonetheless proved ineffective in preventing the emergence of a black market in which rationed products — often smuggled from the countryside — were sold at prices far higher than their worth. To counter this, the government established in September 1950 the Headquarters for Fighting the Black Market , whose goal it was to combat the forming of such a market. Yet despite the increased supervision, and the specially summoned courts, all such attempts at suppression proved ineffective.
was signed with Germany
, compensating the Jewish state for confiscation of Jewish property during the Holocaust. The resulting influx of foreign capital was a godsend to the state's struggling economy, and led to the cancellation of most restrictions in 1953. In 1958 the list of rationed goods was narrowed to just eleven goods, and in 1959 rationing of all goods except jam, sugar and coffee
, was abolished altogether.
remained high, and inflation
grew as of 1951. Yet austerity did have its merits – none remained hungry, and shelter was found for all immigrants, shabby though it may have been.
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
was, to a varying extent, under a regime of austerity
Austerity
In economics, austerity is a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided. Austerity policies are often used by governments to reduce their deficit spending while sometimes coupled with increases in taxes to pay back creditors to...
, during which rationing
Rationing
Rationing is the controlled distribution of scarce resources, goods, or services. Rationing controls the size of the ration, one's allotted portion of the resources being distributed on a particular day or at a particular time.- In economics :...
and similar measures were enforced.
Rationale
Soon after establishment in 1948, the emerging state of Israel found itself lacking in both food and foreign currency. In just three and a half years, the Jewish population of Israel had doubled, increased by nearly 700,000 immigrantsAliyah
Aliyah is the immigration of Jews to the Land of Israel . It is a basic tenet of Zionist ideology. The opposite action, emigration from Israel, is referred to as yerida . The return to the Holy Land has been a Jewish aspiration since the Babylonian exile...
. Consequently, the Israeli government instigated measures to control and oversee distribution of necessary resources to ensure equal and ample rations for all Israeli citizens.
In addition to the problems with the provision of food, national austerity was also required because the state was lacking in foreign currency reserves. Export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
revenues covered less than a third of the cost of import
Import
The term import is derived from the conceptual meaning as to bring in the goods and services into the port of a country. The buyer of such goods and services is referred to an "importer" who is based in the country of import whereas the overseas based seller is referred to as an "exporter". Thus...
s, and less than half of the consequent deficit was covered by the Jewish loan system known as Magbiyot . Most financing was obtained from foreign bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s and gas companies, which, as 1951 drew to an end, refused to expand the available credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
. In order to supervise austerity, the prime minister, David Ben-Gurion
David Ben-Gurion
' was the first Prime Minister of Israel.Ben-Gurion's passion for Zionism, which began early in life, led him to become a major Zionist leader and Executive Head of the World Zionist Organization in 1946...
, ordered the establishment of the Ministry of Rationing and Supply
Rationing and Supply Minister of Israel
The Minister of Rationing and Supply was a short-lived portfolio in the Israeli cabinet. It was created on 26 April 1949 following a speech by Prime Minister David Ben-Gurion introducing the country's austerity programme, and was held by Dov Yosef...
, headed by Dov Yosef
Dov Yosef
Dov Yosef was an Israeli politician and statesman. Yosef served in a variety of ministerial positions during the first two Knessets and was the country's second Minister of Justice, serving twice .-Background:...
.
Life under austerity
At first this rationing was set for staple foods alone — oilCooking oil
Cooking oil is purified fat of plant origin, which is usually liquid at room temperature ....
, sugar
Sugar
Sugar is a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose, characterized by a sweet flavor.Sucrose in its refined form primarily comes from sugar cane and sugar beet...
and margarine
Margarine
Margarine , as a generic term, can indicate any of a wide range of butter substitutes, typically composed of vegetable oils. In many parts of the world, the market share of margarine and spreads has overtaken that of butter...
, for instance — but it was later expanded to furniture
Furniture
Furniture is the mass noun for the movable objects intended to support various human activities such as seating and sleeping in beds, to hold objects at a convenient height for work using horizontal surfaces above the ground, or to store things...
and footwear
Footwear
Footwear consists of garments worn on the feet, for fashion, protection against the environment, and adornment. Being barefoot is commonly associated with poverty, but some cultures chose not to wear footwear at least in some situations....
. Each month, each citizen would get food coupons worth 6 Israeli pound
Israeli pound
The Israeli lira or Israel pound was the currency of Israel from shortly after the creation of the state in 1948 until 1980. Until 1952, the name used on the notes of the Anglo-Palestine Bank was Palestine pound, in Hebrew לירה א"י . In Arabic, the name was given as junayh filisţīnī...
s, and each family was allotted a given amount of foodstuffs. The diet chosen, fashioned after that used in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
during World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, allowed 2,800 calories a day for Israeli citizens, with additional calories for children, the elderly, and pregnant women.
The enforcement of austerity required the establishment of a bureaucracy of quite some proportions, which nonetheless proved ineffective in preventing the emergence of a black market in which rationed products — often smuggled from the countryside — were sold at prices far higher than their worth. To counter this, the government established in September 1950 the Headquarters for Fighting the Black Market , whose goal it was to combat the forming of such a market. Yet despite the increased supervision, and the specially summoned courts, all such attempts at suppression proved ineffective.
1953 Improvements
In 1952 the reparations agreementReparations Agreement between Israel and West Germany
The Reparations Agreement between Israel and West Germany was signed on September 10, 1952, and entered in force on March 27, 1953...
was signed with Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, compensating the Jewish state for confiscation of Jewish property during the Holocaust. The resulting influx of foreign capital was a godsend to the state's struggling economy, and led to the cancellation of most restrictions in 1953. In 1958 the list of rationed goods was narrowed to just eleven goods, and in 1959 rationing of all goods except jam, sugar and coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, was abolished altogether.
Results
Economically, austerity proved a failure, mostly due to the enormous government deficit, covered by bank loans, creating an increase in the amount of money use. Throughout austerity unemploymentUnemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...
remained high, and inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
grew as of 1951. Yet austerity did have its merits – none remained hungry, and shelter was found for all immigrants, shabby though it may have been.
See also
- Rationing in the United Kingdom - 20th century wartime periods
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