BOJ: Strength of economy not a fluke

There has been a steady and significant rise in non-residential investments in Israel, said Bank of Jerusalem branch manager Hillel Suna.

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October 11, 2006 08:08
2 minute read.
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The analogy between managing a business and managing a nation at war was something Zalman Shoval, the erudite owner of the Bank of Jerusalem and a former Israel ambassador to the US could not resist. Speaking at the Bank of Jerusalem's annual Succot breakfast for local and non-resident clients, Shoval was full of praise for Israel's soldiers and civilian population, noting that 86 percent of the people living in the North did not leave their homes under the barrage of Katyusha rocket attacks. "We have nothing to be ashamed of compared to people in London in the blitz," he said. However, the management of the situation was something else. "There was a complete breakdown in management. Any business managed this way would immediately go bankrupt," said Shoval, adding his voice to those of the disenchanted. Shoval went a step further to comment that if a business erred to this extent, "management would automatically be fired by the shareholders." Yet, for all the mismanagement, "The Israeli economy stood tall and strong during the war," he said, noting that the shekel had risen against both the dollar and the euro. "The strength of the Israel economy is not a fluke but a trend," he asserted, adding that people around the world believe in Israel's economy not out of sentiment, but because by international standards it is proving itself. Quoting the World Economic Forum and the International Monetary Fund, Shoval said the Israel economy is expected to grow by 4.5% in 2006, ahead of the US, which has growth forecast at 3.6%; Britain and Canada at 2.8%; Japan at 2.5%; and France at 2.4%. Israel has become one of the world's top producers and exporters of arms and security-related products Shoval noted. Acknowledging that a lot of people may not be happy about this, he added that hopefully the day would come when Israel would be the best producer and exporter of plowshares. He attributed the country's economic strength and stability to the fact that the economy has become less linked to government, and thus "functioned well when the rest did not." There has been a steady and significant rise in non-residential investments in Israel, said Bank of Jerusalem branch manager Hillel Suna, underscoring that foreign investments currently exceed $18 billion, up from about $9b. in 1999. This growth trend is expected to continue he said, citing both positive and negative reasons. On the positive side, there is increasing confidence in Israel's economy, and on the negative side, rising anti-Semitism has spurred many foreigners to seek a foothold in Israel. There is also an intensified desire to build and strengthen ties with Israel, which said Suna, is evidenced in the number of foreign students who come to study or as part of birthright and other similar projects as, well as the number of not-for-profit organizations that are based abroad but are working in Israel.

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