ECONOMIC SURVEY - 28-Jun-95

28 June 1995

(COMMUNICATED BY GPO ECONOMICS DESK)

PEACE ECONOMY:

* ISRAEL AND JORDAN AGREE ON TRADE TREATY.
Israel and Jordan came to an agreement on the major outstanding points between them in negotiating a trade treaty, on 26.6.95, during a meeting between Industry and Trade Minister Micha Harish and his Jordanian counterpart, Ali Abu-Rabed. The trade treaty is based upon the principles of establishing a Free Trade Zone, industrial cooperation, and the lowering of tariffs and customs between the two countries. Final wording of the trade agreement will be completed shortly, possibly in a meeting to be held between the two sides on 29.6.95 in Eilat, the Ministry announced. The two sides agreed that a bi-national working group would examine the ramifications of the trade treaty on the Jordanian economy, in order to recommend solutions to possible problems. The working group will focus on a Free Trade Zone, and on asymmetrical customs, cooperation on standards, industrial R&D, and small business opportunities.
Industry and Trade Ministry - Avital Ber, 972-2-220340

GOVERNMENT SECTOR:

* UNPRECEDENTED FOREIGN INVESTMENT INTEREST IN ISRAEL.
Prime Minister Rabin said that there has never been as much interest been shown by foreign entrepreneurs wishing to invest in Israel, as there is now. Foreign investors are standing in line to develop tourism and industrial projects, the Prime Minister said during a tour of Bat-Yam and Holon. At the same time, however, Rabin said that the Capital Investment Encouragement Law cannot fully answer the needs of these foreign investors. Due to the massive increase in foreign investors expressing interest in investing in Israel, and budgetary constraints, Israel cannot meet their needs in accordance with the statute, he said.
Prime Minister's Office - Ilan Flatto, 972-2-705555

MACRO-ECONOMIC SECTOR:

* RISE OF 63% IN CURRENT ACCOUNTS DEFICIT TO $1.3 BILLION DURING FIRST QUARTER OF 1995.
Israel's current accounts deficit was $1.3 billion during the first quarter of 1995, an increase of 63% compared to the same quarter of 1994, the Central Bureau of Statistics reported. The CBS reported that the increase was primarily due to an increase in exports of goods and services including consumer goods and vehicles. The Bureau also found that Israeli overseas debts rose by $200 million, compared to an increase of $700 million during all of 1994. Israel's total (gross) foreign debt at the end of the first quarter was $41.5 billion, compared to $24.7 billion total assets abroad.
Central Bureau of Statistics - David Neumann, 972-2-6553400

CONSTRUCTION:

* DECREASE IN UNEMPLOYMENT DUE TO FOREIGN WORKERS IN CONSTRUCTION INDUSTRY.
Due to the stabilizing influence of foreign workers in the construction industry, an increase in the employment of Israelis in the sector has been recorded, according to Amos Bar-Am, Director-General of the Association of Contractors and Builders in Israel. Bar-Am said that because Palestinian workers cannot be counted on to arrive at work regularly, for various reasons, building activity became erratic, which affects the employment of Israeli workers at building sites negatively.
Contractors and Builders Association - Esther Goldbarsht, 972-3-5604701

FOREIGN TRADE:

* RELATIONS ESTABLISHED WITH UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION.
The Industry and Trade Ministry's Center for Business Promotion has been chosen to be,and is now operating as, the Israeli contact with UNIDO, the United Nations body responsible for the promotion and acceleration of industrialization in developing nations. The Center is now looking for Israeli firms to serve as consultants or participants in the UN organization's organization.
Center for Business Promotion - Noah Shani, 972-2-220601

* INDUSTRIAL R&D CONFERENCE WITH ISRAELI, FRENCH, DUTCH, AND PORTUGUESE PARTICIPATION.
A conference on industrial R&D opportunities between Israeli and French, Dutch, and Portuguese companies will be held 4-5.7.95 at the Dan Caesarea Hotel. The event - focusing on telecommunications, data communications, environmental technologies, and industrial remote sensing and inspection systems - is being sponsored by MATIMOP, the Ministry of Industry and Trade's Center for Israeli Industrial Research and Development. Some 45 foreign firms are expected to join 70 local firms in attending the event. Participants include: Renault, Philips, Siemens, Israel Aircraft Industries, Tadiran, and Motorola.
MATIMOP - Gabi Gonen, 972-3-5464475

ENERGY: