The government on Sunday approved a task force headed by Prime Minister Ehud Olmert to focus solely on the strengthening and development of Haifa and the North, a project expected to cost over NIS 4 billion.
"Today, the government will approve a long list of steps which are meant to immediately return the residents to their normal routines, and will assist in the most significant manner to strengthen Haifa and the North," Olmert announced at Sunday's cabinet meeting.
Shimon Peres, vice prime minister responsible for the Negev and the Galilee who will serve as acting head of the task force coordinating the activities of a public committee for the initiation of business and investment projects in the North, also will be responsible for raising non-governmental resources, mostly in the framework of donations from Jewish communities and organizations, which all will be transferred to Haifa and the North. An emergency campaign in the U.S. has already raised $220 million to rehabilitate the conflict region.
Finance Minister Director General Yossi Bachar, is expected to leave for New York on Wednesday where he will present to officials and investors the Israeli government's fiscal plans after the war in the North.
At the same time, a Directors General Committee will be established, headed by Ra'anan Dinur, the director general of the prime minister's office, which will prepare a detailed work plan, including a budget (whether from existing budgets or from additional budgets that initially were intended for other uses) to increase the national investment in order to strengthen the region.
In connection with the project known as "Strengthening Haifa and the North - a national mission," Efrat Duvdevani, director general of the Ministry for Development of the Negev and Galilee, will meet with representatives of the prime minister's office, the treasury budget division and the directors general of all the ministries to discuss their plans and projects for 2006 and 2007. In September, the cabinet will receive a detailed proposal including a plan of action and pricetag for each project.
The committee will put special emphasis on the subject of economic tools to immediately assist the residents and businesses in the North, treat special populations and trauma victims, as well as strengthen local authorities adversely affected by the fighting. The Ministry of the Interior will lead all treatment related to the work of the local authorities.
Uriel Lynn, president of the Federation of Israeli Chambers of Commerce demanded from the government full cooperation with business organizations in the North, otherwise the Directors General Committee would be poised to turn into an internal dialogue taking place in government offices rather than on the ground, he argued.
According to the latest data provided by Dun & Bradstreet Israel, about one-in-four businesses in Israel were in danger of closing in the wake of the war in the North. Over the course of the war, businesses at risk of closure rose from 23% in July to 26% by the third week of August. In the hard-hit tourism industry, D&B estimates 23% of businesses are at risk to close, up from 18.3% in July.
D&B Israel expects the situation to deteriorate unless a proper compensation mechanism is implemented. As life slowly gets back to normal, a large number of businesses in the north are having trouble repaying debts while suppliers are faced with a record number of bounced checks in the North, especially from small- and medium-sized businesses.
In an update on the Israeli economy, D&B Inc. lowered its 2006 growth forecast for Israel from 4.5% to 3.8%, but kept its credit rating for the country's economy unchanged.