Minister of Industry, Trade and Labor Eli Yishai has requested budget allocations for development areas, the ministry said Thursday, claiming that budgetary constraints were causing a slowing of investments in the periphery .
The request comes a day after the Manufacturers Association of Israel reported that the country had lost out on approximately NIS 10 billion in industrial investments because of the insufficient budget at the Investment Center of the ministry.
"Approximately 400 factories postponed investment projects with a monetary value of NIS 9.99b. because of the lack of budget at the Investment Center," said Pinhas Kimmelman, chairman of the Money Managers Forum at the Association. "These investments were based on requests for grants of around NIS 2b."
Kimmelman noted that, had these projects seen fruition, they would have created approximately 6,050 jobs mainly in the periphery areas.
"It also would have boosted exports by NIS 4.66b. and sales to the local market by NIS 4.7b.," he said.
Meanwhile, Yishai requested that the Finance Ministry increase the budget for the ministry's department dealing with development areas by NIS 22 million a year until 2010 after presenting its recommendations to the government for subsidizing further development in the periphery.
"The recommendations are intended to strengthen the marketability of development land in the periphery to industrialists who are crying out for new investments," Yishai said.
The minister called for accelerated promotion of developed industrial land in development areas "A," as defined by the Investment Encouragement Law and along the conflict lines, by marketing at least 500 dunam every year in these areas.
Yishai reported that the ministry is responsible for the development and marketing of 66 local industrial zones classified as development areas "A" and "B."
In return for developing the land, the state charges for the expenses of the development less the subsidy given, which, for projects along the conflict line is currently set at 50%, while those in area "A" receive 40% and in area "B" 10% reductions.
"The level of these subsidies is too low and causes a significant slowdown in marketing the land to industry," the ministry said.
Instead, it recommended that new subsidy levels be established that will help to accelerate the marketing of developed land and increase investments in the periphery.