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Publisher\Editor Don Canaan

                      Nov. 8, 1996 V4, #204
All the News the Big Guys Missed

Clinton: "I Won't Make Bush's Mistake"

The U.S administration has sent a calming communique to Jerusalem that they will continue their "no-pressure" policy on Israel. New York City Councilman Noach Dear told Israel Radio: "Clinton told me, I will not make the same mistake Bush and Baker made by putting pressure on Shamir." A poll carried out by the American Jewish Congress shows that 83% of American Jewry voted for Clinton.

Israel Will Take Part in Regional Economic Conference

By Laurie Kassman (VOA-Cairo)

Israeli Foreign Minister David Levy met Thursday with Egyptian President Hosni Mubarak to try to ease the tense relations between the neighbors and to review the stalemated peace process. The Israeli minister also reaffirmed Israel's participation in a regional economic conference to be held next week in Cairo.

Levy told reporters both Israel and Egypt want to move the peace process forward. Egypt has complained about what it sees as Israeli intransigence in negotiations, especially over the implementation of interim agreements signed with the Palestinians.

Levy says it is normal in the peace process to have some obstacles and problems. He did not elaborate on the contents of the 90-minute meeting with Mubarak.

Earlier, he told Israel Radio that Israel will participate in the third annual Middle East Economic Conference, which aims at providing an economic dimension to the peace process. But he expressed hopes it would not turn into an Israel-bashing experience.

U.S. Companies Flood Israel

By Patricia Golan (VOA-Tel Aviv)

The Middle East peace process has prompted dramatic economic growth in Israel in recent years. And the election last May of Prime Minister Benjamin Netanyahu, and the resulting slowdown of the peace process, prompted forecasts by some economic analysts that the boom would grind to a halt.

McDonald's in Tel Aviv -- the place is mobbed. In the past two years, U.S.-based companies have invaded Israel with a vengeance. And not only the fast-food chains -- Blockbuster Video, Tower Records, Office Depot, Toys-R-Us, and Intel are only a few of the companies that have invested here.

Before the peace process, Israel was regarded as a kind of leper state by the world business community. The ratio of foreign investments in Israel compared to local investments was the lowest in the world. But since the beginning of the peace process in 1991, which spelled the end of the Arab boycott, the economy has been transformed.

In 1995, foreigners put $2.3 billion into the country. That represents more than 3 percent of Israel's GDP.

Moshe Nachum heads the Foreign Trade Relations Dept. of Israel's Manufacturers' Association. He says Israel's new investors have come because of Israeli technology and sophisticated infrastructure.

"Telecommunications, roads, facilities, production possibilities, lands, incentives, laws, foreign trade, open foreign trade, most of the benefit that a foreign company can enjoy. You cannot find it in our neighbors, you find it easily in Israel."

From once being one of the most isolated countries in the world, Israel has now become attractive to investors because of its export-driven high-tech industries and an increasingly prosperous, consumer-oriented population. And although it is a very small market, multinational companies like Kimberly-Clark, Unilever, and Nestles', which recently bought a large chunk of the Israeli Osem Food Co., see Israel and the Middle East as an area of great potential.

Economist Gil Feiler heads an Israeli company which brokers joint-ventures in Arab countries. He says Israel is fast becoming a regional logistical center for multi-nationals.

"Do you think that Nestle bought shares in Osem to compete only for the Israeli market? No. They saw the possibilities in the Middle East, the Middle East is a huge business opportunities place."

Fueling all this activity has been the peace process. The slow down of that process since the election of Netanyahu, and last month's explosion of violence between Palestinian and Israeli soldiers, has led to forecasts of a fall-off in potential foreign investments. Several large investment houses with branches in Israel say the turmoil has produced a crisis of confidence in Israel's economic future.

Before the election in May, Israel's top businessmen warned that the economic bubble would burst if Labor's Shimon Peres, who championed the peace process, was not elected. When Netanyahu's new and inexperienced government failed to announce a clear strategy on its promise to privatize industries, and again after September's bloodshed, analysts and businessmen warned of serious investor unrest.

Last month, Netanyahu warned Israel's economy is likely to slow in the next year and that the period of high living is over. But unless the peace and the economy really crash, it appears that foreign investors are in Israel for the duration.

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