ISRAEL: ALTERNATIVE ECONOMIC POLICIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R001302120002-3
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: September 21, 2010
• Sequence Number: 2
• Publication Date: September 26, 1984
• Content Type: MEMO

Sanitized Copy Approved for Release 2010/09/21 : CIA-RDP85T00287R001302120002-3
CO NPTIIP'MTT L
Central Inteingence Agency
Washington. D. C. 20505
DIRECTORATE OF INTELLIGENCE
26 September 1984
ISRAEL: Alternative Economic Policies
Summary
ran two scenarios to measure the impact on
Israel's economic performance of policies designed
to improve the financial gap. Domestic demand
would have to be constrained to such a low level
that economic growth would decline.
Scenario 8. In this scenario, we kept the financial
gap--the sum of the civilian goods and services deficit,
self-financed military payments, and debt repayment--at the 1984
level of $6.4 billion for 1985-87 by reducing private and public
consumption. On average, there is no economic growth from
1985-87, and the unemployment rate increases to 10.7 percent in
1987, compared with 8.5 percent in the baseline. Investment
declines at an average annual rate of 15 percent compared with a
fall of 5.6 percent in the baseline. The civilian goods and
services deficit in 1987 is $3; 9 hillion compared with
Scenario 9. We assumed $4.5 billion is a "financeable
level" for the financial gap and targeted this level for 1987.
To achieve this goal, private and domestic government consumption
decline by an annual average of 9.1 percent and 5.7 percent,
respectively, from 1984 to 1987. Investment is assumed to
decline no more than it does in the baseline; otherwise it would
reach negative values. GNP declines an average of 3.4 percent a
year, and the unemployment rate increases to 12.9 percent in
1 f, n "7
This memorandum was prepared by the
Israel/Palestinian Branch, Arab-Israeli Division, Office of Near
Eastern and South Asian Analysis. It was requested by Russell
Misheloff, Deputy Director, Office of Middle East and European
Affairc a T n
Information as of
25 September 1984 was used in its preparation. Questions and
comments should be directed to Chief, Arab-Israeli Division, at
351-5955.
25X1
Sanitized Copy Approved for Release 2010/09/21 : CIA-RDP85T00287R001302120002-3
 SCI NAR 1 0 8: F I NAN Sanitized Copy Approved for Release 2010/09/21 : CIA-RDP85T00287RO01302120002-3
ISRAEL
MAIN ECONOMIC INDICATORS, 1983-1987
CROSS NATIONAL PRODUCT
PI RC[ NI CIIANGE
GNP 1)1. I LA I OR
1 [RCE N I CHANGE
CAPACITY 01II_IZAIION RAZE
UN1I1I'I OYI?1FNI RA IE
COMPONFNIS 01 AGGRFGAIF DEMAND
101 VA I I CONSIIMI' PI ION
I'I RC1 N I CHANGE
IOIAL INVESTMENT
PERCENT CIIANGE
GOVERNMENT CONSUMPTION
PERCENT CHANGE
EXPORTS
PERCENT CHANGE
IMPORTS
PERCEN1 CHANGE
NE.I FACTOR IMPORTS
107.73 110.34 111.19 111.18 110.43
1.34 2_.42 0. 78 -0.1)1 -0.67
12.62 53.28 251.65 1448.71 111113.50
150.09 322.13 312.34 475.68 669.20
90.88 92_.117 92.68 92.31 91.79
4.49 5.96 7.27 8.86 10.711
80.311 83. 150 83.98 86.96 89.83
1.1)5 11.30 0.21 3.55 3.30
27.36 26.60 25.58 21.57 16.23
5.92 -2.79 -3.85 -15.65 -24.76
35.38 39.77 38.95 110.47 40.13
-11.24 12.39 -2.06 3.90 -0.83
51.38 50.12 56.60 58.13 60.50
2.24 5.32 4.59 2.70 4.07
80.98 88.51 88.36 90.09 90.28
5.65 9.30 -0.17 1.96 0.22
5.76 5.114 5.56 5.87 5.97
CIVILIAN GOODS AND SERVICES
EXPORTS
Of WHICH: DIAMONDS
IMOORIS
Of WIIICII: IUIFS
1) 1 AMONI)S
INII Id SI
CI VII IAN COOI)S AND `.;1 RVI(:1S
DI II(:II
DIRT CT DF I f NSF IMI'ORIS
1) 1. I I NI;I I MOOlt I PAYMI N I
U5 IINANCLD I'AYMINIS
NON-US FINANCED IMPORTS
DFRF REPAYMENT
IOIAI D[ RI
I I NANO I AI GAT'
I X I I I(NAI 111N1)
01 WHICH (IS SSA
HAI ANCI
1)51 I : SCI N8
MOD1 I I SSF P84 F
9.95 10.68 1 1 . 83 12.68 111.06
1.21 1.39 1.58 1.12 1.91
13.96 15.22 16.02 16.12 11.92
1.61 1.63 1.611 1.611 1.12
11. #3', 0. )It 1 . I2 1 . ?;' 1 . lb
2 . 1 6 , . Y2 2 . 4 ' 2 P. 03 2 . 1 ! )
1.03 1.76 1 . 85 '' .',22. 8