|
|
May 25, 2007
Israeli economy grows
High-tech booms, but unemployment stays high.
MICHAEL GROBERMAN
According to Yaacov Fisher, Israel is a good place to invest. The
Israeli economist was in Vancouver last week, on the final leg of
a North American tour. He explained his enthusiasm for the country's
economy and drew careful attention to issues that make Israel unique.
After two years of negative economic growth, Fisher noted, Israel
experienced four years of continuous growth through the end of 1994.
In fact, he said, Israel's growth rate was one of the highest among
industrialized economies. Nonetheless, he added, despite this growth
of the economy, unemployment remains very high.
Fisher explained that growth of the high-tech sector in Israel is
key to the growth. Those employed are high-tech-trained individuals
whose work adds to the nation's economy, especially with the arrivals
of Russian immigrants in the 1990s. But the ordinary Israeli, without
specialized training from abroad or from army duty, is still struggling
to find work.
Because of the nature of Israel's industry, it must import goods
in order to grow. Since 2003, Israel's balance of payments has been
positive. That is the value of Israel's imports is less than the
value of its exports. Yet, Fisher expressed concern that Israel's
economic well-being has "too many eggs in one basket."
When high-tech declines in export value, Israel may experience financial
losses. Fisher recommended "a balanced growth with industry
other than high-tech."
Fisher and Pinchas Landau are the founders of I-Biz – Israel
Business Information Services. It is "Israel's leading supplier
of value-added intelligence and analysis ... on the Israeli and
global economies and financial markets."
Fisher suggested that tourism contributes little to the overall
economy in Israel. "Jewish people come, Christians come, whoever
comes, comes," he said. But compared to other parts of the
world, he said, Israel is not a significant tourist destination.
Asked about foreign investment in Israel, Fisher pointed out that
foreign property owners must pay with American funds. This means
that, regardless of the shekel's value on the international exchange,
no matter its trading value against the American dollar, the actual
purchase is done in American dollars. There is no such thing as
a bargain, said Fisher, based on the health of the shekel against
the dollar.
He said that poverty in Israel has also been steadily increasing,
despite charted economic growth. Many of the poor are Arab Israelis
with large families.
One reason for this, Fisher noted, is that Prime Minister Ehud Olmert
favors Ronald Reagan's "trickle down theory" of how money
comes to the poor and middle classes. The key belief here is, that
by lowering taxes for the wealthier people and providing investment
opportunities, these people will invest money in businesses, thus
providing more jobs.
When asked what has been happening with the millions of dollars
collected from the Jewish Diaspora to help rehabilitate the north
of Israel since the end of the recent war, Fisher said it is difficult
to track the money but that North American and other donors are
entitled to "full disclosure" of where this money goes.
"Israel's deep recession from 2000 to 2007 pushed people into
poverty," he said, adding, however, that, overall, the picture
in Israel is "very, very positive."
Michael Groberman is a Vancouver freelance writer.
^TOP
|
|
