ECONOMIC SURVEY - 06-Jun-94

ECONOMIC SURVEY

JUNE 6, 1994

(COMMUNICATED BY GPO ECONOMICS DESK)

PEACE ECONOMY

* PALESTINIAN PROBLEMS WITH VETERINARY SERVICES IN GAZA AND JERICHO DELAY IMPLEMENTATION OF AGRICULTURAL AGREEMENT WITH PLO.
Organizational problems with the establishment of a Palestinian veterinary authority have disrupted the Agriculture Ministry's plans to go ahead with partial implementation of the agriculture agreement with the PLO, according to Professor Arnon Shimshoni, head of the Agriculture Ministry's Veterinary Services. The Ministry will also bar all transportation of animals between Gaza and Jericho until an authority is in place and working. Prof. Shimshoni remarked that until the Ministry is able to receive real-time information regarding infectious and other diseases to animals in Gaza and Jericho the veterinary authority will not be able to implement the full agreement. 'We have lost all knowledge of what is going on there which can have serious consequences for Israel,' said Shimshoni. Only last week, said Shimshoni, the Israeli authorities found out about 6 outbreaks of the dangerous Foot and Mouth disease in Gazan livestock. Though this disease is not harmful to humans, it disrupts food and milk supply and can therefore cause economic ruin unless brought under control.

* GROWERS ASSOCIATION AND POULTRY GROWERS GROUPS PLAN TO PREVENT ENTRY OF PALESTINIAN PRODUCE INTO ISRAEL.
Beginning next week the two groups, representing the majority of Israeli agricultural workers, will block Palestinian produce from the Autonomous regions from entering Israel. The groups held a press conference in Tel Aviv on 5.6.94, to discuss the action and to call on the Agriculture and Finance Ministries to properly compensate the Israeli growers for the expected loss of their livelihoods. According to Yitzhak Tovli, head of the Poultry Growers Association, and Yossi Blair, head of the Vegetable Growers Association, beginning Monday 12.6.94, 2,100 members of the groups will man roadblocks at the Erez and Nahal Oz checkpoints, Sopha intersection, and the Kisufim junction.

* CANADIAN INVESTORS TO SUPPLY ELECTRICITY TO GAZA FROM FLOATING ELECTRIC PLANT.
Within 3 to 6 months a group of Canadian investors plans to anchor a ship off the coast of Gaza to produce electricity for the area. The ship will use gas turbines to produce 120 megawatts of electricity. Current electricity usage in Gaza, at peak periods, is close to 70 megawatts. The Canadian investors have met with the general manager of the Israel Electric Corporation, Moshe Katz, and with the Director of the Electric Authority in the Energy Ministry, Dr. Shlomo Brovender. The two set conditions requiring the Canadians to provide collateral or securities against investments worth NIS16 million made by the IEC in Gaza. Palestinian representatives have asked the IEC to continue supplying them electricity until the Canadian operation is in place.

* BEZEQ SIGNS ARRANGEMENT AGREEMENT WITH SUPPLIER OF TELECOMMUNICATIONS TO AUTONOMOUS REGIONS.
Bezek signed an agreement on 5.6.94, with International Technologies, the US-based firm awarded the exclusive franchise for the Autonomous region's telecommunications services. The agreement provides for Bezeq to work with ITI to ensure continuity of telecommunications between the areas and Israel.

NEWS:

* ISRAEL AIRCRAFT INDUSTRIES TO SUPPLY 'PHALCON' ELECTRONIC WARFARE PLANE TO CHILE.
An IAI produced Phalcon electronic warfare plane is scheduled to be delivered to Chile by the end of 1994. The Phalcon is a Boeing 707 fitted with electronic and radar equipment primarily from IAI Elta plant. The plane is considered the Israeli AWACS. (Yediot Ahronot, 6.6.94)

* ISRAEL FAILS TO CONVINCE US AIR FORCE NOT TO CANCEL CONTRACT FOR REFURBISHING ITS F-15 PLANES IN ISRAEL.
All efforts by Israeli government officials to rescind a January 1994 decision by the US Air Force to cancel its contract with the Bedek plant of Israel Aircraft Industries have failed. The contract, scheduled to last through 1997, was originally signed in 1992 and was to be worth $70 million. Since the January 1994 decision, Israeli officials have been attempting to convince the US Air Force to change its decision or at the very least continue the contract through its original period. Until now, 25 F-15 planes have been refurbished by Bedek. The contract's cancellation is evidently due to pressure from US manufacturers to bring the work to the US instead of doing in Israel. (Yediot Ahronot, 6.6.94)

TOURISM:

* TOURISM REVENUES UP BY 11% IN 1993.
The Tourism Ministry reported that final statistics show revenues from tourism came to $2.5 billion in 1993, up 11 percent from 1992's figure. The value added figure, about 75% of the total, came to $1.9 billion for the local industry. According to the figures some 139 international exhibitions and conferences were held, drawing 52,000 participants, while 55 festivals and special events took place drawing approximately 2.1 million people, both tourists and Israelis.

DELEGATIONS:

* RAYTHEON EXECUTIVES TO VISIT.
Raytheon, the US-based defense contractor builders of the Patriot missile, is sending a team of executives here later this month. The group is expected to meet with municipal officials interested in a new type of public transportation using electricity. The group is being sponsored by the Export Company from Tel Aviv. (Yediot Ahronot, 6.6.94)