The director of the Small Business Development Center, Mati, in the Western Galilee, Henri Biton, said "we don't sense any problem with this," (Haaretz, August 13), when asked about the allotment of aid from Mati to small businesses owned by Jews only, in compliance with the demands of Jewish donors from abroad.

In a properly-run state, the center should have refused politely, and said to the donor: "Thank you, but no, thank you. Our regulations don't allow us to discriminate among candidates for receiving loan funds on an ethnic basis," and given back the money.

Indeed, the Industry and Trade Ministry canceled the directing of money from this fund through Mati, but this is just the tip of the iceberg. The giving of "designated funds" only to Jews has always been the practice in many infrastructure and social initiatives in Israel. At the entrances to many locales, a large sign has been erected on which the symbol of the Jewish Agency has been blazoned alongside the symbol of the Housing Ministry, as testimony to the joint funding of the infrastructures in the locale.

There is no such sign at the entrance to Arab locales, because neither the Jewish Agency nor Housing Ministry has invested in infrastructures there.

It has been reported in the media that of the NIS 4 billion the government intends to invest in rehabilitating the Galilee following the war, NIS 1.5 billion will come from donations from Jews abroad. This contribution should not be taken lightly. However, the government must see this money as part of the state's income, so that it will have the right to dictate the targets in which this sum will be invested, in accordance with its interests.

Egalitarian development of the Galilee is currently a major and strategic interest of the state. The rehabilitation that is required after the war is not only physical: the war has stirred up murky currents in relations between the state and Arab-Israelis in the context of undermining their sense of belonging to Israel.

If the money from donors, most of which comes through the Jewish Agency, is invested only in Jews, it will cause real damage to the Galilee and its development. But this money can also be a very powerful lever if it is allocated in an equal way between Jewish and Arab residents.

The state must dictate this to the Jewish Agency and every other fund.

Jewish Agency personnel have recently understood that discriminating against Arabs also hurts fundraising. Jewish Agency Chairman Ze'ev Bielski has declared that the organization's funds are intended for the country's Jewish and Arab residents.

The Zionist Congress decided to obligate the Jewish Agency in July to invest in Jewish and Arab locales in an equal fashion. Therefore, one can presume that the Jewish Agency will willingly take upon itself this type of demand from the government of Israel if it is firm.

The momentum of fundraising and investment of these funds in the development of the Galilee in the coming years are perhaps the state's last opportunity to eliminate the discrimination practiced in the guise of "complying with the will of the donor."

The tradition of discrimination against Arab-Israelis is quiet and rooted. Among the governing mechanisms in Israel, there are still many who refuse to develop an egalitarian policy, but there are also those who extend a hand to a change in policy and implementation.

During the coming years, the civil society organizations must tighten their ties with the government, and keep a watchful eye on the way it allocates its resources.

In addition, world Jewry should know that Israel aspires to be part of the Western world, where discrimination in the allocation of resources on an ethnic basis is forbidden.

The donors cannot continue to ignore this, and they must ensure that their money is not put to illegitimate use that aims to discriminate between Jews and Arabs.