ECONOMIC SURVEY - 08-Aug-96

8 August 1996

(COMMUNICATED BY GPO ECONOMICS DESK)

GOVERNMENT SECTOR:

* PRIME MINISTER NETANYAHU VISITS JORDAN.
Prime Minister Benjamin Netanyahu, accompanied by representatives of the business sector, visited Jordan on 05.08.96 to hold a series of meetings with Jordanian officials including King Hussein and Crown Prince Hassan. Discussion of economic issues was a central element of the visit. At the end of the visit, the Prime Minister said that he had made a number of commitments to Jordan in order to improve the economic aspects of peace between the two countries. These steps include: reducing bureaucratic procedures on imports from Jordan; promoting the establishment of a logistics center in Eilat; establishing an agricultural cooperation committee to develop joint agriculture projects in the Jordan Valley; shortening the period for completing a project to desalinate the Jordan River channel in order to transfer 50 million cubic meters of water annually to Jordan; recommending to the IMF that it provide funding to develop water sources; opening consulates in Eilat and Aqaba to facilitate border crossings and the issuing of visas; and continuing discussions on building a natural gas terminal in Aqaba for natural gas to be imported from Qatar to Israel. At a press conference following the meetings, Prime Minister Netanyahu said that the government supports the establishment of a joint international airport North of Eilat and Aqaba. (Ma'ariv, 6.8.96, p.2A, Globes 6.8.96, p.2)
Prime Minister's Spokesman - Shai Bazak, 972-2-705465

* KOOR AND EISENBERG GROUP HOLD DISCUSSIONS WITH JORDANIAN GOVERNMENT.
Benny Gaon CEO and President of Koor Industries and Shoul Eisenberg - - Chairman of the Israel Corporation and of the Eisenberg Group were part of the delegation that travelled with Prime Minister Benjamin Netanyahu to Jordan on 05.08.96. Koor is interested in investing in a number of industries in Jordan including building materials, telecommunications, food, chemicals, and consumer products. Its partner in joint ventures will be Jordan's National Insurance Institute. The Eisenberg Group is interested in building a power station in Jordan, and held discussions with Crown Prince Hassan on the subject. (Globes, 6.8.96, p.2)

ENERGY SECTOR:

* ERNST & YOUNG CHOSEN TO BE STRATEGIC PLANNING ADVISOR FOR NATIONAL OIL REFINERIES.
Ernst & Young one of the world's leading accounting and consulting firms has been chosen by National Oil Refineries as its strategic planning advisor for preparing long-term plans for the future. The company, jointly owned by the government and the Eisenberg Group, will consider the option of dividing the company into two entities, located in Haifa and in Ashdod, as well as ways to streamlining operations, the option of privatization, and other organizational changes. (Globes, 2.8.96, p.11)

MACRO-ECONOMIC SECTOR:

* 4.4% DECLINE IN IMMIGRATION DURING FIRST HALF OF 1996.
33,000 new immigrants entered the country during the first half of 1996, a decrease of 4.4%, as compared to the same period in 1995, the Central Bureau of Statistics reported. Immigrants from the CIS states represented 84.5% of all immigrants, though the number of CIS immigrants fell by 6.5%, as compared to the same period in 1995.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* SLOWER GROWTH IN PRODUCTIVITY OF COMMERCIAL AND SERVICES SECTORS DURING FIRST FIVE MONTHS OF 1996.
Growth in worker productivity in Israel's commercial and services sectors rose by an average monthly rate of only 0.4% between January to May (an annual rate of 4.8%), the Central Bureau of Statistics reported. This is less than the average monthly growth of 0.7% achieved during the second half of 1995, and the average monthly growth of 1.0% during 1995's first half.
Central Bureau of Statistics - David Neumann, 972-2-6553400

PRIVATE SECTOR:

* INTEL BEGINS CARRYING OUT BUYBACK AGREEMENTS.
Intel has begun carrying out its buyback agreements in return for the governmental benefits it is receiving for the establishment of its $1.6 billion Kiryat Gat fabrication plant. During the coming decade, Intel is expected to purchase approximately $400 million worth of goods from Israeli firms. At the beginning of September, a group of senior purchasing executives will visit Israel and meet with potential Israeli suppliers.
Industry and Trade Ministry - Haya Peri, 972-2-220340

MILITARY INDUSTRIES SECTOR:

* RAFAEL AND LOCKHEED-MARTIN ESTABLISH JOINT MARKETING FIRM FOR POPEYE MISSILE.
Rafael and US-based defense company Lockheed-Martin, officially announced that they will establish a joint firm to market the Popeye air-to-ground missile in the U.S. and throughout the world. The new firm will also enable Rafael and the IAF to use U.S. military assistance to finance part of the development costs of the next generation of Popeye missile.