The debate on Prime Minister Benjamin Netanyahu’s trips abroad has raised the issue of Knesset members and ministers’ travels overseas, at the invitation of the Israel Bonds.
It appears the Bonds has invited numerous politicians to Europe and the United States to give speeches at festive dinners, as part of the organization’s bid to sell State of Israel bonds.
The trips combine lectures with luxury accommodations − prestigious hotels, first rate food, a chauffeured car and a spacious schedule. But the politicians’ trips are not the main problem. The problem is the necessity of the Bonds organization at this time.
The Bonds was established in 1951 by David Ben-Gurion as an instrument to raise funds for the fledgling state. At first it was a necessary instrument, because commercial banks refused to give Israel loans, unless it was with exorbitant interest, when the state needed a lot of capital to invest, grow and develop.
Over the years it turned out the Bonds always returned its loans and the interest seeped into the market, so the Bonds raised higher and higher sums and many institutional bodies, not necessarily Jewish, buy State of Israel securities today.
The problem is that due to its large apparatus and high expenses, the Bonds’ fundraising cost is more expensive than simply raising capital in the international capital markets.
Bonds officials argue that at a time of need only the organization will be able to raise funds for Israel. This is hard to accept. If Israel happens to be in acute distress, even the Bonds will not be able to help, because nobody lends money today on anything but market conditions and Israel doesn’t need the Bonds to schnorr handouts.
Israel is seen today as a state with a growing, stable economy, so has no difficulty raising funds in overseas’ markets at good prices. Therefore it is time to shut the Bonds’ down and save several tens of millions of dollars a year.
The problem is, if the Bonds closes, there will be no one to finance the ministers and Knesset members’ pleasure trips, and senior politicians will no longer be able to dish out appointments to cronies.
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