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If you like Shimon Peres's story, you might also like:
Ehud Barak,
Mikhail Gorbachev,
John Hume,
Albie Sachs,
Desmond Tutu
and Elie Wiesel

Shimon Peres can also be seen and heard in our Podcast Center

Shimon Peres's recommended reading: Crime and Punishment

Related Links:
Peres Center for Peace
Nobel Prize
Shimon Peres

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Shimon Peres
Shimon Peres
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Shimon Peres Interview (page: 4 / 5)

Former President of Israel

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  Shimon Peres

When we look at your biography, you are suddenly the head of the Navy, and there is no information preceding that about a naval career.

Shimon Peres: No, no, nothing whatsoever. It was like a fire brigade.

I think what probably Ben-Gurion found in me was chutzpah, you know. I was a daring young man, and I wasn't afraid of conventions, and I thought that we don't have a chance for conventions or precedents, so I worked day and night. I believe I was a hard-working man. I could have worked almost day and night, uninterruptedly. And then, he nominated me also to be the head of the Ministry of Defense, as I have said, at a very young age of 29. He was Prime Minister and Minister of Defense, so he actually handed over to my hands the running of the Ministry of Defense. And again and again, I mean, I didn't have any experience, but I have had views, and I was ready to fight for them.

[ Key to Success ] Courage

You had a passion for Israel too, didn't you?

Shimon Peres: Oh, yes, but not only me. Everybody had.

Everybody at that time almost totally identified with the country, with the war, with the need to win, and that went on after the War of Independence. When the war was over, I found out that I'm so ignorant. I didn't know a single word of English. Literally, nothing whatsoever. And I hardly have had any formal education. So I came to Ben-Gurion, who was my mentor, and I told him, "Look, I can't go on like this. I have to learn something." I thought I wanted to go to the United States for study. So then, he nominated me to be the head of the Defense Ministry mission in America, in New York, and I worked during the day. I studied, in the evening, at night, at a wonderful school, the New School for Social Research.

[ Key to Success ] Preparation

I spent a very formative two years in New York, and then I went to Harvard University for a course. A wonderful location again, where the students are people with experience already, people from the army, from industry. You can learn from the students as much as you can learn from the professors.

In your early years as Deputy Minister of Defense, you were very involved in establishing the military and aviation foundation of this new state.

Shimon Peres: We were living under an embargo. I thought we didn't have a choice but to build our own industries. And people say a small country like Israel cannot built an aeronautic industry, cannot build an electronics industry, cannot build nuclear reactors. And again, I thought we can do it, so I was charged with doing it. In the beginning it raised a great deal of skepticism and criticism, but later on people appreciate it very much. So actually we laid, at that time, the foundation for the high-tech of Israel which exists to this very day.

[ Key to Success ] Vision

That included the nuclear program as well, didn't it?

Shimon Peres: Nuclear programs as well, yes. I was in charge of the nuclear programs.

It would take about a year to go over your entire career in detail. Maybe you could talk a little bit about the work that you did on the economy of Israel during your first term as Prime Minister in the 1980s. That was a very turbulent time.

Shimon Peres: I learned two things in my life. One is no matter what you are, what matters is what you do. And when you are in power, don't judge yourself by the length of your term but by the record of your doings. I knew Prime Ministers who were in office years and years and years, and they did nothing. I knew Prime Ministers who were a month and did a lot. Maybe the most outstanding example would be Mendes-France of France. He did in three or four months what other Prime Ministers wouldn't do in ten years.

So that was my temperament. Once I was elected, I said to myself: "Let's decide what will be your priorities and how long will it take, because if you don't decide on target dates, you may get mixed up with so many other pressures or distractions." I put in four priorities, and I mentioned the dates. I said, "In six months, we shall leave Lebanon." We left in six months. "In nine months, we should go out of inflation." People were skeptical. "In a year's time, we should restore our relations with Egypt; and then, we shall begin to make peace with the Jordanians." When I came in, although I had studied economy in the New School for Social Research, I was very far from being an economist.

The only economy I learned, again, was from Ben-Gurion. His economy was very simple. He would call me up and say, "Shimon, let's do this and that." I would say, "Okay," and then he would say, "How much does it cost?" I would say, "A million dollars." He would say, "My God, where are we going to get that money?" The next day, he came in with another idea. "Let's do this and that." He would ask me, "How much does it cost?" and I would say "A hundred million dollars." He would say, "Oh, that's nothing." So leaders should decide on the value of things, not on the cost of it. If it's important, it's economic; if it's unimportant, it's a waste of money.

I came in, and most of my friends told me, "Don't do it. You know very little about economy." The inflation was 500 percent. "You cannot do it except by military means or by having a strike. You'll break your neck." I listened to them, but I'm not sure I was impressed. I thought if you can make inflation, you probably can unmake it as well. And I always thought, "Never think about alternatives; always think about creativity." When you have two alternatives, the first thing you have to do is to look for the third that you didn't think about, that doesn't exist.

I started to work day and night, listening to all walks of life in our economy, and there were three or four things that I learned immediately, that in a democracy, you have two groups of decision making: the political parties -- they are good for politics -- and the economic partnership, which is detached from politics. The economy is not being run by parties, but by three factors in the society: government, employees, and employers. So leave the parties aside and try to see if you can reach an agreement among the three. Don't be in a haste to declare a plan, and then discover that one or two are against it. It will be extremely difficult to do so, particularly if the demands are very, very heavy.

[ Key to Success ] Perseverance

We asked the workers to give up 25 percent of their salaries. Imagine! We asked the industrialists to freeze all costs, no matter what the inflation is. We asked people to save money as much as they can, but also asked the government to cut the budget. Now, I learned soon enough, that among the three, two don't trust the third one -- the third one is the government. Both industry and unions feel the government is a talking organization and a spending organization. In a meeting among the three, the government demands the others to cut, to freeze, to give up. And they feel, "My God, what the hell are they talking about? We shall cut, we shall freeze, we shall suffer, and they will spend again!"

I learned again that if I wanted to do something, I have to show that the government is serious. Not by declaring, and not by preaching, but by cutting. And I knew that unless we should cut very deeply our budget, we don't stand a chance to have the other two parties. Now, cutting is easier said than done. Every minister, when you cut him, thinks that you have something against him. They took it very personally -- the Minister of Defense and the Minister of Education and the Minister of Social Welfare. And they were my friends, and I have to become, all of a sudden, very cruel. So finally, we had the Cabinet session that lasted for 36 hours, uninterrupted, and they took a knife and sit personally and cut their budgets from $100,000 and up. If the poor minister would close his eyes, I would take my knife. But anyway, by the end of the session, it was cut, and people were fired. I thought the whole nation would be against me, but strangely enough, the reaction of the people was unbelievable. My popularity jumped to 90 percent or whatever it was.

[ Key to Success ] Integrity

Did the inflation subside?

Shimon Peres: No, not yet. By firing people, by cutting budgets -- education, social welfare, health -- it affects every person. Then, I was all the time in consultation with the unions and the industrialists. I called them, and I said, "Gentlemen, now it's your turn," and they agreed. They agreed voluntarily to cut salaries and wages, to freeze prices, to reduce consumption.

Shimon Peres Interview Photo
I was also very lucky to be helped by the United States administration. The Secretary of State was George Schultz, and his economic advisors were Herb Stein and Stanley Fischer, two very, very serious economists. They advised me, too, and they told me, "If you do it, we shall provide you with a security net." We were afraid the money may run away from the country, and we could have faced a situation like in Argentina. So they said, "If you will be true to what you told us, we shall provide you with the necessary guarantee," and they did. They gave me a billion and a half dollars without any conditions. We stopped printing money, and all of a sudden, the people started to trust the economy. And in a short time, inflation went down from 500 percent to 16 percent. It became a classic turnaround. I think they study it in universities to this very day.

I was learning, as I did in the Ministry of Defense. I never knew, but I always learned. It is worthwhile, when you do a thing like that, to listen carefully, both to the theoretic side and the pragmatic one. Not everything that a professor of economy will tell you is realistic; on the other hand, it is serious. But if you listen to the people who are doers, they will tell you, "Maybe it's right, but it's undoable." Listen to them as well.

So I constantly listened to the two sides. And also, I knew that I have to make choices of my own. I worked with a group of people who argued day and night -- professors, officials, the Minister of Finance -- but there were decisions that I had to make. For example, the economists said, "Unless we have a deflation of 25 percent, we shall not save the economy." I asked them, "Twenty-five percent? What will be the size of unemployment?" They gave me a staggering figure. I said, "I'm not going for it. I disagree." And we got only 16 percent, not 25 percent.

On the other hand, they wanted to tax the windfalls or profits of the stock exchange. This time, I took the position of the rightists against it. If you do it, capital may run away from the country, and you cannot produce employment if you don't have the capital. Secondly, part of the investment in the stock exchange was public companies, pension companies, government. If I tax them, in fact, I'm not taxing the capitalists, I am taxing the people who have saved, trusted. It was very controversial, those sorts of things. But finally, it worked out.

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This page last revised on Sep 23, 2010 21:48 EST
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