ECONOMIC SURVEY
(COMMUNICATED BY THE GPO ECONOMICS DESK)
Jerusalem, 4 January 1995
DEFENSE SECTOR:
* GOVERNMENT TO TAKE ACTION AGAINST TAAS ISRAEL INDUSTRIES (FORMERLY
ISRAEL MILITARY INDUSTRIES) IF COMPANY DOES NOT ACCELERATE RECOVERY PLAN.
On 1.1.95, the Government delivered an ultimatum to TAAS management giving
the Government-owned defense concern one week to conclude an agreement
with its employees to continue implementation of its recovery plan. PM
Rabin told TAAS chairman Dan Shomron that if no such consensus is reached
within one week, the Government might place it in receivership. Globes
(1.1.95) reported that that during the current stage of its recovery plan
TAAS must dismiss between 1,000 and 1,500 more employees and institute
organizational reforms. In the past few years, TAAS has dismissed close to
2,500 workers in keeping with earlier recovery plans.
Finance Ministry - Eli Yosef (02)-317201
* FINANCE MINISTRY DIRECTOR GENERAL: DEFENSE INDUSTRIES MUST SHED BETWEEN
5,000-6,000 ADDITIONAL EMPLOYEES BY MID-1996; GOVERNMENT PLEDGES TO
TRANSFER $2.5 BILLION IN AID TO DEFENSE INDUSTRIES.
According to Finance Ministry Director-General David Brodet Israeli
defense industries should release another 5,000 to 6,000 employees by the
middle of 1996 in order to help the sector weather its recession.
According to Brodet, the local defense industries should aim to employ
around 18,000 workers, down from the 40,000 of four years ago. Brodet said
that the Government has pledged approximately $2.5 billion in assistance
including loans and transfer payments to local defense industries in
order to facilitate theire recovery. Brodet said the Government has
transferred $525 million (since the end of 1992), to Israel Aircraft
Industries, $400 million to TAAS Israel Industries, and estimates that the
total cost of the recovery plan at RAFAEL - the Armament Development
Authority - will be $650 million.
Finance Ministry - Eli Yosef (02)-317201
GOVERNMENT SECTOR:
* 1995 BUDGET PASSES KNESSET.
Late Thursday night (29-30.12.94) the Knesset passed the Government's
budget for 1995. The budget includes Government spending of NIS 147.09
billion - with a regular budget of NIS 109.4 billion, a development and
investment budget of NIS 35.8 billion, and a debt repayment budget (to the
Bank of Israel) of NIS 1.7 billion. The total budget is 8.5% higher in
real terms, than last year's budget. Defense spending is NIS 25.29
billion, or 17.8% of the budget, up from NIS 20.3 billion, or 17.4% in
1994's budget. Debt repayment is 31% of the budget, down from 33.3% in
1994. Transfer payments and supports have increased to 27.6% of the
budget, from 26.1% in 1994. Social spending is 16.6% of the budget,
compared to 16.1% in 1994. Investment and credit spending is 7%, compared
to 7.1% in 1994.
Finance Ministry - Eli Yosef (02)-317201
* FIRST REGIONAL ECONOMIC CONFERENCE FOR BUSINESSWOMEN PLANNED.
Nava Arad, the Prime Minister's Advisor on the Status of Women, is
involved in the planning of a regional economic conference for women to
coincide with the North Africa Middle East Regional Economic Conference
(The Casablanca Conference's continuation) to take place later this year
in Amman. Arad met with Jordanian officials in Amman last week in order to
arrange the conference.
Prime Minister's Advisor on The Status of Women Nava Arad, (03)-6962142
PEACE ECONOMY:
* FIRST OFFICIAL BUSINESS DELEGATION IN JORDAN THIS WEEK.
Federation of Israel Chambers of Commerce President Danny Gillerman is
leading a group of businesspeople to Jordan this week. The group includes
Ya'acov Nimrodi of Israel Land Development Corporation, David Alpendari of
Supersol, and Amiram Shore of MLL Software, among others. They will be
meeting with Jordanian officials including the Finance Minister, the Trade
Minister, and the head of the Jordanian Chamber of Commerce.
FICC - Sari Lipkin (03)-5631010
FOREIGN TRADE:
* DIAMOND EXPORTS UP 17 PERCENT TO $3.919 BILLION IN 1994.
The Ministry of Industry and Trade's Diamond Division reported that
exports of diamonds in 1994 reached $3.919 billion, an increase of 17%
compared to 1993. Polished diamond exports were up by 15% to $3.459
billion, while exports of unpolished diamonds were up by 35% to $460
million. The US led export destinations receiving 43% of the exports, with
Japan next at 17%, Hong Kong at 17%, Belgium with 10%, Switzerland with
3%, and the rest of the world receiving 10% of Israel's diamond exports.
Ministry of Industry and Trade - Avital Bar (02)-220340
* 10 PERCENT INCREASE IN EXPORTS OF COMMERCIAL SAMPLES IN 1994.
The Federation of Israel Chambers of Commerce reported a 10.1% increase in
the number of commercial and industrial samples product samples
exported for the purpose of generating new sales during 1994. According
to the FICC's figures, exports of this type were $54.5 million compared to
$49.5 million in 1993.
FICC - Sari Lipkin (03)-5631010