Kibbutz industries 'face closure' over weak dollar

Devaluation of dollar has hurt exports, manufacturers say.

February 5, 2008 09:15
2 minute read.
us dollar bills 88

us dollar bills 88. (photo credit: )


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The continuous devaluation of the US dollar is placing kibbutz manufacturing and export industries at risk of closure, Kibbutz Industries Association chairman Yonatan Melamed told The Jerusalem Post Monday. "The damage is very serious," he said. "We're talking about hundreds and millions of dollars." "I can tell you there are factories that are already considering closure, especially in the textile sector, which is based on the dollar," he added. Melamed said other manufacturers, such as plastic factories, were also at risk. "We're simply receiving much less [due to the devaluation of the dollar]," he said. Kibbutz factories were weighing the possibility of firing workers, Melamed said. "These are the people who always end up paying the price for these crises," he said. Finance Minister Ronnie Bar-On on Tuesday is scheduled to visit the Western Galilee, a heartland of kibbutz factories, where he will address mounting concerns and demands for government action from factory owners. Melamed said the government should take immediate action. The Finance Ministry should "find a way to set up a kind of insurance and assemble a national committee to deal with this," he said, adding, "If the finance minister doesn't wake up, this problem will get worse." "We will try to wake him up during this visit," Melamed said. So far, he said, the government "apparently hasn't realized the extent of the damage and hasn't adjusted to the new reality." In addition to the slumping dollar value, factory owners have also come to recognize that a global recession is setting in, Melamed said. "Everyone who sees the decrease in the scope of the work feels it," he said. "The Israeli government cannot control global trends," the Kibbutz Industries Association said in a statement Monday, but "in various ways, it is able to enlarge support for factories dealing with exports." Meanwhile, the Travel Agents Association said Monday the drop in the dollar had caused a 20 percent decrease in the income of travel agents over the past year. The warning came as a poll conducted among Israeli vacation-goers found that most were preparing for price increases within core tourist industry sectors in Israel, such as hotels, restaurants and attractions. The poll, which was carried out by the Kelim Shivukim institute and released Monday, said 68% of respondents feared rising costs within the Israeli tourism industry following the slump in the dollar, while 63% said the dollar's falling value would influence their choice of holiday destination.

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