The government is looking to boost industrial purchases made by international companies in Israel, approving on Sunday recommendations made by Minister of Industry, Trade and Labor Eli Yishai to streamline the government's industrial cooperation program.
"Cooperation in industry, subsequent to government tender, boosts exports and industrial growth, which is especially relevant now when the demand for employment and business in the North and the Negev is high and when Israel is about to make massive purchases in the defense and commercial sectors," Yishai said.
The industrial cooperation program aims at providing international companies with incentives and a competitive edge to establish long-term involvement in the country.
The new legislation, which has been forwarded to the Knesset plenum for final approval, raises the stakes on the projects by increasing the minimum amount of the deals applicable from NIS 2 million to NIS 25m.
In addition, it separates the number of deals going to foreign corporations required of the defense and commercial sectors whereby 50% of defense and 35% of commercial deals will be subject to international agreements.
The legislation also allows the government leeway to give preference to research and development projects and small businesses as recipients in the program, as well as factories in the North and the Negev. The government also expanded the program to include medical insurance funds and local authorities as participants.
"Many countries around the world demand cooperative purchases [with Israel] and the legislative changes are designed to drive the matter globally," said Bina Bar-On, director-general of the Industrial Corporation Authority, which is in charge of the program at the ministry. "In 2005, we had purchase of $2b. from cooperative agreements and with the help of the new legislation we will achieve even higher numbers in the future."
The Ministry of industry, Trade and Labor reported Sunday that between 2000 and 2005 $10.65b. of goods were sold through the program, of which 35% were defense contracts and the remainder commercial agreements. It had another $4.72b. in obligations result from the program.
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