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Jerusalem, 8 June 1999
Speech by Bank of Israel Governor Frenkel
(Communicated by Bank of Israel Spokesman)
Following are excepts from a speech given by Bank of Israel Governor Jacob
Frenkel yesterday evening (Monday), 7.6.99 at the University of Haifa,
upon his receiving an Honorary Ph.D.:
"Education, including higher education, is the basis for progress in every
modern society and economy which participate in the world at large. The
liberalization of financial markets and the lowering of inflation have
greatly contributed to the successful integration of Israel into the
global economy. As a result, the financial status of the Israeli economy
has been maintained in international capital markets, and the level of
foreign investment has continued to grow. The Israeli higher education
system is essential to the success of the economy's globalization, by
providing the foundations for the adoption and development of
sophisticated technologies, conceptual openness and flexibility, high
quality analytical ability and a proper meeting of the new risks and
situations that characterize the globalized world.
Israeli economic policy must place special emphasis on building the
economy's future for the next decade. This [has to be done by] giving
government budgetary priority to investing in human infrastructure,
including education and research and development, and in physical
infrastructure, including transportation and communications. Increasing
infrastructure budgets must be at the expense of other expenses whose
contribution to renewed economic growth is less, so as not to breach the
budget framework. This [has to be] alongside a determined policy of reform
that includes tax and other structural reforms and an economic policy that
strives to strengthen the economy's stability. Such a policy, alongside
continued successful absorption of new immigrants which has done much to
increase Israel's human capital, will reap great dividends that will be
expressed, inter alia, in worker mobility and their integration into
sophisticated industries, and increased private investment and a
subsequent rise in productivity. Increased productivity and the resumption
of continuous growth are also the key to solving the problem of
unemployment and to raising individual and social welfare."
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