"We were surprised that exports remained stable despite the appreciation of the shekel, although it is necessary to say 'so far'," said Governor of the Bank of Israel Prof. Stanley Fischer at the 10th ILSI-Biomed Conference 2011 today. "One of the main complaints by the business sector was about the strong shekel, but it only goes to show the strength of Israeli exports and its relative weight in the economy. To the complainers, I say that it is not possible to maintain a strong economy with a weak shekel, and I prefer a strong economy, especially when we don’t see the appreciation hurting exports."
Fischer said that the 8% gap in favor of imports over exports in 1995 was wiped out within five years, mostly thanks to high tech. This gap is now 5% in favor of exports.
Fischer noted that Israel entered the last recession with an unemployment rate of 5.6%, a 20-year low. The unemployment rate rose to 8% during the recession, compared with expectations of 9%, because the global economic crisis did not strongly affect Israel, and thanks to various cutbacks, job-sharing, and other measures by employers to avoid firing employees. "This made it easier to recover from the recession because there is no need to hire new workers," he said.
Fischer concluded, "When Warren Buffett bought Iscar Ltd. in 2006, Americans asked me, 'Aren't Israelis angry when foreigners buy their best assets?' No. It never happens. Israelis are very proud that foreigners buy their assets. If you think about acquisitions, you won't find a more enthusiastic environment. That's an advantage in addition to the economic stability and support for investors."
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