ECONOMIC SURVEY - 21-Dec-94

21 December 1994

(COMMUNICATED BY GPO ECONOMICS DESK)

GOVERNMENT SECTOR:

* RABIN TO TAKE IMPORTANT ROLE IN ECONOMIC PACKAGE AGREEMENT NEGOTIATIONS BETWEEN HISTADRUT AND THE GOVERNMENT.
Following a meeting in PM Yitzhak Rabin's office on 19.12.94 it was announced that the Government and the Histadrut Labour Union would attempt to come to an agreement on an economic package by the middle of January 1995. The package, dealing with social aspects of the economy, is expected to include an adjustment of the cost of living increase, a decrease in National Insurance payments, a freezing of interest rates, a decrease in the National Health Insurance tax, expanded rights for working women, increased vegetable imports, and a relaxation of import quotas. Those participating in the meeting included PM Rabin, his economic advisor Ilan Flatto, Bank of Israel Governor Jacob Frenkel, Histadrut Secretary General Haim Ramon, Finance Minister Avraham Shohat, Finance Ministry Director General Moshe Fogel, Finance Ministry Budget Director David Brodet, Israel Manufacturers Association President Dan Propper, and Federation of Israel Chambers of Commerce President Danny Gillerman.
Prime Minister's Media Advisor, Benny Cohen, (02)-705555

* MINISTER OF INDUSTRY AND TRADE AND AGRICULTURE MINISTERS HAVE RESERVATIONS TO NEW TRADE TREATY WITH EUROPEAN UNION.
Both Industry and Trade Minister Micha Harish and Agriculture Minister Ya'acov Tzur have expressed their opposition to a new free trade treaty with the European Union as it currently stands. According to Harish, "The trade package with the EU is not economically worthwhile for Israel." Tzur has said that the treaty does not fully address the requests of Israel's agricultural sector regarding the opening of the EU markets to Israeli produce.
Industry and Trade Ministry, Avital Ber, (02)-220340
Agriculture Ministry, Ronny Hassid, (03)-6971749

* 25% INCREASE IN BUDGET FOR INDUSTRIAL DEVELOPMENT IN ARAB SECTOR.
The Ministry of Industry and Trade reported that it was increasing the industrial development budget for the Arab sector by 25% from NIS 16 million in 1994 to NIS 20 million in 1995. 1994's budget was up 33% from that of 1993, which was NIS12 million. Deputy Industry and Trade Minister Marsha Lubelsky said that since 1993, the Government has been addressing the issue of assymetrical industrial development of the Arab sector. It should be noted, said Lubelsky, that the final 1994 industrial development budget for the Arab sector came to NIS 30 million, including items added during the year.
Industry and Trade Ministry, Avital Ber, (02)-220340

FOREIGN TRADE:

* ISRAELI ACCOUNTING FIRMS ARE JOINING THE WORLD'S LARGEST AGENCIES.
Somekh Chaikin joined the Price Waterhouse accounting agency making it the fifth Israeli firm to become officially associated with one of the world's Big Six accounting firms. Over the past year, four other Israeli accounting firms have established official associations with international partners. Those include Brightman and Partners with Deloitte Touche, Kost, Lev Ari and Forer with Ernst & Young, Kesselman and Kesselman with Coopers and Lybrand, Bavly Millner with BDO, and Broide and Partners with KPMG. Arthur Anderson is the only one of the Big Six firms which has not signed an agreement with an Israeli firm. ("Ma'ariv", 20.12.94)

* ECONOMIC RESULTS OF PRIME MINISTER'S VISIT TO SOUTH KOREA.
Elbit Industries of Haifa has received a contract, worth about $ 7 million, from the South Korean Air Force to refurbish F-5 fighter planes, according to a report in "Globes", (19.12.94). The paper also reported that Israel Aircraft Industries signed a cooperation agreement with a major Korean industrial concern, Samsung, to produce civilian jets and that Koor Industries was negotiating with Lucky Goldstar on a number of joint projects. Hitachi is also now interested in examining the possibility of establishing an electronics factory in Israel in order to take advantage of incentives offered by Israel's free trade agreements with the EU and the USA. ("Globes", 19.12.94) A group of managers, buyers, and salespeople from South Korea's Shinsgua Department Store will be visiting Israel in order to buy products for an Israel week scheduled for May, according to the Israel Export Institute. A representative from Korea's Samsung Aerospace also participated in an electro-optics and lasers conference last month sponsored by the Industry and Trade Ministry. According to the Ministry's Matimop R&D Division, Samsung's representative expressed an interest in examining joint projects with Israeli firms, such as cooperation with IAI.
Israel Export Institute, Rachela Weinstock, (03)-5142891
Ministry of Industry and Trade, Avital Ber, (02)-220340

* CONTRACTS SIGNED AT AGRICULTURE EXHIBITION IN INDIA; MORE THAN 150,000 VISITORS TO ISRAELI BOOTH.
More than 150,000 visited the Israeli booth at a recent Agricultural exhibition in the North Indian state of Chandi Garh, according to the Israel Export Institute. Contracts signed with Indian firms included agreements for exporting greenhouses for educational purposes:
- by Degem Systems, for an agricultural teaching farm and a mushroom growing experiment
- by AM International/Jain, for a milk farming project
- by Elul, and for water sources and irrigation projects
- by Soli.
Israel Export Institute Yitzhak Karyati, (03)-5142868

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