Israeli Minister Seeks Increased US Aid on Immigration, Debt

ISRAELI Finance Minister Yitzhak Modai is the latest in a string of Israeli leaders to approach United States officials in recent weeks hoping to benefit from American largesse. Mr. Modai is in Washington this week to talk with Secretary of State James Baker III and Treasury Secretary Nicholas Brady and to attend the annual International Monetary Fund meeting.

With the preoccupations of the Gulf crisis and the arrival of hundreds of thousands of Soviet Jews, Israel is looking to its traditional ally to lend a helping hand.

The finance minister says he will be asking the US to forgive Israel's military debt - valued at about $4.5 billion - and to give substantial help for the new immigrants.

Modai follows hot on the heels of Defense Minister Moshe Arens, who returned last week from Washington with a US promise to lease Israel military equipment worth a reported $1 billion. Speaking on his return to Israel, however, Mr. Arens made it clear Israel expected more from its ally.

``It will be some time before we can expect a decision on Israel's additional military aid requests,'' he said, adding that there was still ``work to be done.''

That ``work'' includes a request for an additional $750 million in US military aid to Israel, at present worth $1.8 billion a year, and an exceptional grant of $1 billion to meet costs incurred as a result of the Gulf crisis.

Modai believes that if the Bush administration is to forgive Egypt's military debt, as it has indicated a willingness to do, the same should apply to Israel.

``The fact that Israel sits aside quietly and does not get involved directly [in the Gulf crisis] does not mean that we're not confronting very serious dangers,'' Modai said last week.

``Can you imagine that now the Egyptian loan would be waived and Israel would be stuck with its loan?'' Modai asked, adding that Israel had always paid its debts in the past.

Israeli officials are skeptical about Modai's debt forgiveness proposal, however.

``It's a dead issue as far as we're concerned,'' said Yossi Olmert, director of the Government Press Office, adding that no such proposal has been discussed by the government. ``I don't see how, in the current climate, we can expect to get such a windfall.''

Modai has also said he will seek additional assistance to help pay for immigrant absorption. Israel anticipates far more immigrants from the Soviet Union than previously predicted.

Up to a million Soviet Jews are expected by the end of 1992, according to Simcha Dinitz, chairman of the semi-official Jewish Agency. Another million would follow by 1995. Earlier estimates said it would take five years to reach the million mark.

If the Jewish Agency's figures prove correct, Israel's population of 4.75 million will increase by more than 40 percent in five years.

``I hope he's right,'' Modai told reporters last week, ``in spite of the additional burden it will put on Israel.''

Modai recently pushed through an ambitious economic reform, aimed at attracting investment, raising exports, and creating half a million jobs for new immigrants in the next five years.

Estimates vary, but Mr. Dinitz puts the cost of absorption at $20 billion to $40 billion over three years.

Dinitz argues against seeking forgiveness of Israel's military debt or pursuing a $400 million loan guarantee to pay for immigrant housing. ``We should concentrate on the request of a very special, one-time exceptional grant from the United States to help us ... meet this greatest of all humanitarian challenges,'' Dinitz told Israel Radio at the weekend. He said Israel should look for $3 billion to $4 billion over three to four years.