ECONOMIC SURVEY
(COMMUNICATED BY GPO ECONOMICS DESK)
22 February 1995
PEACE ECONOMY:
* NEGOTIATIONS IN AGRICULTURE SECTOR WITH JORDAN CLOSE TO AGREEMENT.
According to Zvi Allon, Agriculture Ministry Deputy Director-General
responsible for foreign trade, negotiations on the agriculture track with
Jordan are close to producing a signed agreement. On 22.2.95, Allon said
that the two sides have agreed to a general set of preferences in
agricultural trade relations. For instance, Allon said, Jordan will have
preference in exporting fresh vegetables to Israel when there is a
shortage. In addition, there will be no customs duties for certain quotas
of olive oil, soft cheeses, and certain yogurts. Israel will also be able
to export to Jordan certain quotas of products, such as hard cheeses and
frozen vegetables, with no customs duties. Allon also said that the
agreement will have provisions encouraging cooperation between private
sector parties to provide assistance to Jordan in exporting to third
countries.
Agriculture Ministry - Ronny Hassid, 972-3-69721749
* GOVERNMENT MINISTRY DIRECTORS-GENERAL MEET ON INDUSTRIAL ZONES ON
BOUNDARIES OF PALESTINIAN AUTONOMY.
Industrial zones for Palestinian workers near the boundary areas between
Israel and the Palestinian Autonomy were the topic of discussion between
the Director-Generals of the Finance, Industry and Trade, and the Foreign
Ministries. Two alternatives were discussed. The first alternative would
locate the industrial zones within the Palestinian Autonomy and be
developed by the Palestinian Authority, while the second would be just
inside of Israel and developed by international funding and Israel. Yossi
Snir, Industry and Trade Director-General, told his counterparts that
according to a study carried out by Ben Gurion University professors, the
zones could provide employment for 50,000 Palestinians. These two
proposals were to be presented to Prime Minister Rabin and the Ministers
of Finance, Industry and Trade, and Foreign Affairs.
Industry and Trade Ministry - Avital Bar, 972-2-220340
MACRO-ECONOMIC SECTOR:
* BANK OF ISRAEL REDUCES INTEREST RATE BY 0.7%.
Bank of Israel Governor Jacob Frenkel announced on Tuesday, 21.2.95, that
the Bank of Israel would be reducing the current interest rate it charges
the country's banks to 16.3%, a decrease of 0.7%. Frenkel said that the
the Central Bank was taking this move because it was beginning to see a
slowing down of the inflation rate due to its earlier monetary policies.
Frenkel stressed that though the Government's goal of 8-11% inflation is
still in sight, it is not a certainty.
Bank of Israel - Ohad Bar Efrat, 972-2-552712
* FOREIGN RESIDENT INVESTMENTS IN 1994 FALL TO $612 MILLION.
Foreign resident investments in Israel decreased in 1994 to $612 million
compared to $777 million in 1993, the Bank of Israel announced. The Bank
reported that the decrease was primarily due to a drop in new offerings in
foreign markets by Israeli firms, which were down to $93 million compared
to $450 million in 1993.
However, this was contrasted with a direct real increase by foreign
investers locally in Israeli shares. The Bank of Israel reported that
foreign investments in Israel, real and financial, were $400 million
higher than Israeli investments abroad, real and financial, at the end of
1994.
Bank of Israel - Ohad Bar Efrat, 972-2-552712
PRIVATIZATION:
* HOUSING AND CONSTRUCTION (SHIKUN U'FITUACH) SOLD FOR NIS850 MILLION.
100 percent of the Government's largest arm in the residential and
commercial construction and housing sector, Housing and Construction, was
sold to a private consortium on 15.2.95 for NIS 850 million. The
consortium includes Azorim, a Clal Israel company, with 50.1%, the Israel
Corporation, controlled by Shoul Eisenberg, with 25.1%, and the
Renaissance Fund, associated with Claridge Israel, with 24.8% of Housing
and Construction's equity.
Finance Ministry - Eli Yosef, 972-2-317201
* GOVERNMENT APPOINTS 9 NEW EL AL DIRECTORS, INCLUDING CHAIRMAN, AS
AIRLINE LEAVES TEMPORARY RECEIVORSHIP.
On 14.2.95, the Ministers of Transportation and Finance appointed 9 new
members to El Al's board of directors. The newly appointed chairman is
Joseph Ciechanover, former president of PEC Israel, an Israel Discount
investment firm traded in the U.S., and former head of Israel Discount
Bank. A number of additional appointments to the board are expected in the
near future. The new directors will help privatize the airline.
El Al Airlines - Nachman Kleinman, 972-3-9716904
DELEGATIONS:
* TRADE DELEGATIONS FROM OVER 50 COUNTRIES VISITED FEDERATION OF ISRAEL
CHAMBERS OF COMMERCE IN 1994.
The Federation of Israel Chambers of Commerce announced that delegations
from over 50 countries were guests of the organization during 1994.
According to Roni Reiber, head of the FICC's International Division, 1994
was the first time delegations from Jordan, Morocco, Oman, Qatar,
Malaysia, Bangladesh, and Cuba were official guests of the FICC.
Federation of Israeli Chambers of Commerce - Sara Lipkin, 972-3-5631010