ECONOMIC SURVEY
7 December 1994
(COMMUNICATED BY GPO ECONOMICS DESK)
PRIVATIZATION:
* BANK HAPOALIM TENDER TO BE ANNOUNCED BY END OF DECEMBER 1994.
Finance Minister Arvraham Shohat has decided to sell controlling interest
in Bank Hapoalim, the country's largest bank, stating that the Government
will sell between 20 to 51% of the bank's shares in the first stage. 20%
of the Bank's shares are already held by the public due to prior offerings
on the Tel Aviv Stock Exchange. With the decision, Shohat told MI
Holdings, the Government Company in charge of selling the Government's
shares in the banks, to finalize preparations for publicizing the tender.
The sale of controlling interest in Bank Leumi is currently being
negotiated between MI Holdings and Edmund Safra, whose family controls the
Safra Banks including New York's Republic Bank. 16% of Bank Leumi's shares
are already held by the public from prior offerings on the Tel Aviv Stock
Exchange.
Finance Ministry - Eli Yosef, (02)-317201
* KOOR INDUSTRIES TO JOIN CONSORTIUM IN BIDDING FOR A CONTROLLING INTEREST
IN ISRAEL CHEMICALS.
Koor Industries announced it is joining the bidding for a controlling
interest in Israel Chemicals, the largest Government owned company. Koor
intends to join the group led by Shamrock (of the Disney Group), Dankner
Investments, and Poalim Investments. Before this can occur, the Government
Companies Authority must give its permission for Koor's participation
which Koor believes it will receive within the next few days. According to
reports in 'Globes', the other groups bidding for Israel Chemicals include
one led by businessman Ted Arison, a second led by GAF Chemicals of the
United States, and the third led by the Israel Corporation.
Koor Industries - Amiram Fleischer, (03)-52521115
MACRO NEWS:
* RISING BALANCE OF PAYMENTS DEFICIT IN CURRENT ACCOUNTS DURING FIRST NINE
MONTHS OF 1994.
During the first nine months of 1994, the current accounts deficit in the
balance of payments rose to $3.5 billion, compared to $2.1 billion during
the same period in 1993. The Central Bureau of Statistics reported that
the increase in the deficit was due to an increase in imports and
expenditures by Israelis abroad. Overseas debt, excluding foreign
properties, was $2.1 billion, up from $1.6 billion for the corresponding
period last year. For the first nine months of the year, the goods and
services accounts had a $7.3 billion deficit, affected by an increase of
$1.8 billion in imported goods (excluding defense items) and a $1 billion
increase in imported services.
Central Bureau of Statistics - David Neumann, (02)-553400
* STANDARD & POOR REPRESENTATIVES MEET WITH BANK OF ISRAEL.
A group of senior executives from Standard & Poor were in Israel this week
to meet with Bank of Israel Governor Jacob Frenkel and assess Israel's
economy in order grant Israel a new credit rating. Israel currently holds
a BBB+ rating from S&P, but the Bank of Israel expects that Israel will be
given a rating which will allow it to receive lower interest rate loans.
Bank of Israel - Ohad Bar-Efrat, (02)552712
* EXPOSURE TO FOREIGN COMPETITION REDUCED SHOE AND CLOTHING PRICES FOR
LOCAL CONSUMERS.
The Government's policy of gradually opening the country to imports has
led to a reduction in prices of clothing and shoes for the Israeli
consumer, according to a study conducted by economists from the Federation
of Israeli Chambers of Commerce. According to the study, for the first 10
months of the year the price of clothing rose by 0.3% while, if prices for
October are excluded, the price of clothing actually fell by 6.4%. For
shoes, the first ten months show a 3.8% increase, however if October
prices are excluded, the price of shoes fell by 0.3%. The economists
pointed out in comparison that inflation during the time of the studies
rose by 12.1%. This factor, they wrote, shows the effectiveness of the
Government's policy of increasing competition and reducing prices.
Federation of Chambers of Commerce - Sari Lipkin, (03)-5631010
PEACE ECONOMY:
* SEMINAR ON TRADE WITH JORDAN TO BE HELD AT EXPORT INSTITUTE.
The Israel Export Institute is sponsoring a seminar for Israeli
businesspeople interested in doing business with Jordan. Jordanian as well
as Israeli Government representatives will attend, according to the Export
Institute, and the seminar will focus on technical trade issues as well as
on the new Jordanian markets for Israelis to explore.
Israel Export Institute - Ruti Ovnat, (03)-5101331
TOURISM:
* TOURISM MINISTRY TO ALLOCATE NIS 108 MILLION FOR TOURISM MARKETING
ABROAD.
The Tourism Ministry has announced that it expects to allocate NIS 108
million for tourism marketing efforts abroad. A special focus, the
Ministry said, will be on marketing tourism packages to Israel-Jordan and
Egypt. The Ministry also noted that three large international hotel
chains, Marriot, Meridian, and Accor are expected to make final decisions
on their entry into the Israeli market in 1995.
Tourism Ministry - Orly Doron, (02)-754867
ENERGY:
* ISRAEL ACCEPTED AS MEMBER OF INTERNATIONAL ENERGY AGENCY OF THE
ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT.
At the end of November, Israel was accepted as a full member of the IEA
which is a branch of the OECD. Simultaneously, Israel was accepted to the
Energy Conservation Committee of the IEA. The OECD membership is made up
of the world's 13 largest economies. Israel is already a member of the
IEA's Solar Energy Committee.
Energy Ministry Mickey Lev, (02)-316133