ECONOMIC NEWS SURVEY
December 10, 1996
VEHICLE MANUFACTURERS AROUND THE WORLD INTERESTED IN ISRAELI TECHNOLOGY
("Ha'aretz" - November)
The world vehicle manufacturing industry which has tended in recent years
to acquire components internationally is showing interest in Israeli
technological industries producing parts and components in the vehicles
market. Directors of the Volkswagen and Audi companies of Germany have
visited Israel to sign contracts for long-term supplies from Israeli
enterprises. They visited M.S.M. Telecenter, Myberg and Nordia, at the
initiative of Isinex, a company of consultants for engineering marketing.
Its founders were Kobi Goldberg and Danny Kadosh. Goldberg reported that,
at present, representatives of at least 30 technological countries are in
Israel offering the potential of cooperating with the leading vehicle
manufacturers in the world, including Mann and Johnson Control. An annual
level of $4-million to $5-million in transactions is anticipated, with an
eventual potential of $20-million by the year 2000 and later of
$50-million.
AMERICAN COLLMAN CONCERN WILL PRODUCE IN ISRAEL
("Globes" Nov. 22).
The American Collman Concern will start producing generators and textile
products it manufactures at plants in Israel. Brahim Abdelatif, the
vice-president of Collman, is responsible for the Middle East and African
regions. The company's products are now being marketed in Israel by its
agents, Amgazit, of Kfar Etzion. Later, a plant for electrical appliances
of the company will be set up, both for the local and the regional
markets. These include water-coolers among a variety of products. The
present turnover is $1.2-billion annually, centered in the U.S., and
exported also to Japan, Europe and South America. Other goods it produces
include stoves, coolers, fishing craft, gas lamps and camping equipment.
Collman's garden furniture will soon be marketed in Israel. Its camping
equipment sold by Amgazit Camping has sales of about 20-million shekels a
year.
A GIANT GOVERNMENT IN ISRAEL
("Globes" Nov. 22)
Many supporters of reducing the government's involvement in the economy
suffice with administrative restrictions, privatizing state corporations
and transferring activities of government ministries to private
contractors, suppliers and providers of services in the business sector.
Those advocating that this is enough to create a free economy in Israel,
competitive and efficient, are making a mistake that will lead to a
delusion. Privatization reduces direct government involvement in the
economy, but does not influence its overall scope which is a function of
the quantity and price of the governmental enterprises. The larger they
are and the higher their price, the level of taxation and of the
proportion of the GDP in the national budget rises.
There is no government intervention more influential on the economy than
fixing the overall level of taxation from each sector, business or citizen
and whom to exempt and what activities will be financed by these taxes.
What makes Israel different from other countries are the five major
national areas which eat up huge resources: security, absorbing
immigrants, spreading out the population, supporting the religious and
ultra-Orthodox sectors, and settlements in the Administered Territories.
The trap these obligations create is not new: we have always hesitated
over what banners to raise simultaneously and how high to fly them. The
mistake has been to ignore the link between the level of government
intervention in the economy and the scope of government activities.
FOUR HIGH-TECH COMPANIES SEEK INVESTMENTS THROUGH MONTGOMERY
("Ma'ariv" Dec. 4)
The American investment bank, Montgomery, will next week present four
Israeli companies to investors at the technological Tech-Week congress in
Israel. They include the security computer-program Memco, the data
communications company, Orchit, the wireless components producer D.S.P.C.,
and the semi-conductor planning company Galileo.
The congress will assemble some 1,800 institutional and private investors
to meet with representatives of more than 100 companies, including Intel,
Microsoft and Seiko. Galileo is one of the only private companies putting
on a display at the congress because of the great interest evinced by
investors. The Israeli representatives of Montgomery will emphasize
investment possibilities in Israel, describing the congress as an
excellent opportunity to expose to professional investors the potential of
Israeli technological growth companies.
TOURISM MINISTRY TO GET FUND FOR MARKETING ABROAD
("Ma'ariv" Dec. 8)
The Minister of Tourism, Moshe Katsav, is aiming at attracting 5,000,000
tourists a year to Israel in the period of office of the current
government. He persuaded Prime Minister Netanyahu of the need for a higher
budget for his ministry, and in an effort to maintain incoming tourism
through this winter his ministry has been granted a fund of 10-million
shekels as a budget for marketing abroad.