Austerity in Israel Totally Explained

Everything about Austerity In Israel totally explained

Austerity in Israel: From 1949 to 1959, the state of Israel was, to a varying extent, under a regime of austerity (Tzena), during which rationing and similar measures were enforced.

Rationale

Shortly after its establishment in 1948, the young state of Israel found itself lacking in both food and foreign currency. In three and a half years, the Jewish population of Israel had doubled, inflated by nearly 700,000 immigrants. At the same time, the Arab villages, once major suppliers of food to the Jews of the land, were no longer in a position to do so, due to changes in political and settlement situations after the 1948 Arab-Israeli War. Subsequently, the government of Israel decided that in order to ensure ample rations for all Israeli citizens, it would assume control of resources and distribute them equally. Aside from the provision of food, austerity was also required because the state was lacking in foreign currency reserves. Export revenues covered less than a third of the cost of imports, and less than half of the consequent deficit was covered by Jewish loans called Magbiyot (lit. Collections). Most financing was obtained from foreign banks and gas companies, which, as 1951 drew to an end, refused to enlarge the credit given to the state. In order to supervise austerity, the prime minister of the time, David Ben-Gurion, ordered the establishment of the Ministry of Supply and Rationing (Misrad HaAspaka VeHaKitzuv), headed by Dov Yosef.

Life under austerity

At first this rationing was set for staple foods alone — oil, 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 pounds, 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 inefficient 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 (Matay LeMilhama BeShuk HaShahor), whose goal it was to combat the forming of such a market. Yet despite the increased supervision, and the specially summoned courts, all such repression proved inefficient.

1952 Improvements

In 1952 an agreement was signed with Germany, compensating Israel for confiscation of Jewish property during the Holocaust. The resulting influx of foreign capital, a godsend to the state's struggling economy, led to the cancellation of most restrictions in 1953. In 1958 the list of rationed goods was narrowed to 11 goods in all, and in 1959 rationing of all goods save jam, sugar and coffee, 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 using. Throughout austerity unemployment 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.

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