After statehood, Israel faced a deep economic crisis. As well as having to recover from the devastating effects of the 1948 Arab–Israeli War, it also had to absorb hundreds of thousands of Jewish refugees from Europe and almost a million from the Arab world. Israel was financially overwhelmed and faced a deep economic crisis, which led to a policy of austerity from 1949 to 1959. Unemployment was high, and foreign currency reserves were scarce.