ECONOMIC SURVEY
19 June 1995
(COMMUNICATED BY GPO ECONOMICS DESK)
PEACE ECONOMICS:
* COST OF REDEPLOYMENT TO REACH OVER NIS 1 BILLION.
Redeployment of the IDF and Israeli security forces in Judea and Samaria
in accordance with the interim agreement with the PA is expected to cost
more than NIS 1 billion, according to reports on Israel Radio (18.6.95).
Redeployment of bases, headquarters, and forces are the main elements of
redeployment, and Israel Radio reported that the IDF has already received
two allocations to partially fund the redeployment - one of NIS 300
million and the second of NIS 70 million. (Israel Radio, 18.6.95)
MACRO-ECONOMIC SECTOR:
* INFLATION UP BY 1% IN MAY.
The Consumer Price Index rose by 1% in May, slightly higher than had been
expected by some observers, the Central Bureau of Statistics reported.
While the price of vegetables and fruits declined by 6.8%, the month's
rise was caused by a 1.2% rise in the price of food, a 1.6% rise in the
price of housing, and 4.9% rise in the price of clothing and shoes. Since
the beginning of 1995, inflation has risen by 2.2%; 3.7% when excluding
fruits and vegetables.
Central Bureau of Statistics - David Neumann, 972-2-6553400
FOREIGN TRADE:
* ISRAEL AND ALBERTA, CANADA TO SIGN ECONOMIC COOPERATION TREATY.
Trade and Industry Minister Micha Harish and the Premier of Canada's
Alberta Province, Ralph Klein will sign an economic cooperation treaty
this week during the Premier's visit to Israel. Cooperation between the
two sides will primarily be focused on energy, technology, and ecological
trade. An additional scientific cooperation treaty between Alberta and
Israel, the Canada-Israel Industrial Research & Development Fund, is also
expected to be signed during the visit. In 1994, trade between Israel and
Canada was $260 million, with Israel having a negative trade balance of
$50.5 million.
Trade and Industry Ministry - Avital Ber, 972-2-220340
AGRICULTURE:
* WATER AGREEMENTS TO BE SIGNED WITH CHINA.
China's Deputy Minister of Water, Cheu Yaobang, is visiting Israel this
week as a guest of Water Commissioner Gidon Tsur. During his visit, he
will sign a memorandum of Understanding on cooperation on water
development issues with Agriculture Minister Ya'akov Tzur; and examine
water purification projects. Yaobang told the Ministry that he is
particularly interested in examining projects to increase agricultural
yield using highly efficient irrigation techniques in order to increase
the amount of land under irrigated cultivation in China.
Agriculture Ministry - Ronny Hassid, 972-3-3971749
GOVERNMENT SECTOR:
* FINANCE MINISTER SHOHAT TO HEAD COMMITTEE EXAMINING ESTABLISHMENT
OF CASINOS IN ISRAEL.
The Cabinet has authorized Finance Minister Avraham Shohat to create a
committee on the effects of opening casinos in Israel. Committee members
will include the ministers of Education, Tourism, Trade and Industry,
Justice, and Police. Globes (18.6.95), reported that the committee was set
up in order to examine "in a positive light" the establishment of casinos.
Globes also reported that, casino entrepreneurs such as Saul Krazner and
Sheldon Adelson have recently expressed interest to the Tourism Ministry
in opening casinos in the Eilat area.
Tourism Ministry - Orly Doron, 972-2-754845
BUSINESS SECTOR:
* LANNET DATA COMUNICATIONS AND BRITIAN'S MADGE TO MERGE.
Lannet, a member of the RAD Group producing computer communications
equipment, and Madge NV, a British based producer of computer
communications equipment, announced that Madge intends to acquire Lannet
into Madge. Madge reported it will acquire Lannet's outstanding shares in
a share swap. The merging of Madge and Lannet would create a company worth
$1.1 billion and would be one of the 6 largest computer networking
companies in the world. Shares in both companies are listed on NASDAQ.
Lannet - Sharon Hess, 972-3-6458493
* INFRASTRUCTURE SECTOR TO SUFFER CRISIS IN 1995 ACCORDING TO BUSINESS
DATA ISRAEL.
The local infrastructure sector will endure a crisis during the second
half of 1995, according to a study by Business Data Israel, an economic
trends survey company. The report noted that companies relying upon
Government projects will suffer the most harm because the Public Works
Department (Ma'atz) has delayed signing new contracts due to accounting
technicalities that occurred in 1994. The firm also pointed out that road
maintenance has taken precedence over other new road construction projects
causing some unemployment in asphalt factories.
Business Data Israel - 972-3-5751433