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(photo credit: Bloomberg News)
Prime Minister-designate Binyamin Netanyahu on Sunday urged the country's corporate leaders and bankers to make every effort to avoid layoffs, and promised to join forces with the private sector to stabilize the economy.
"I call upon each of you to make every effort to protect jobs. I know that it will take time until the economic ship will change direction, but I ask you to make every effort to stem the wave of unemployment," Netanyahu said at a meeting with corporate and banking leaders in Tel Aviv. "The first problem of the new incoming government is the unemployment problem. Even if we can't succeed in rescuing every factory and protecting every job, we need to do the maximum to protect work positions."
Netanyahu said that once he takes office, he will set a up a joint forum of economic and social bodies with the aim of formulating policies for a strong economy and society. On Monday, he is scheduled to meet with social and welfare organizations.
The meeting with Netanyahu on Sunday, which was convened to discuss recommendations from the private sector on how to cope with the economic crisis, was attended by about 50 business leaders including real estate tycoons Itzhak Tshuva, Eliezer Fishman and Africa Israel's Lev Leviev, Idan Ofer of Israel Corp., Teva's Eli Hurvitz, Motorola Israel President Elisha Yanai, Galia Maor of Bank Leumi and Shlomo Zohar of Israel Discount Bank.
Speaking for three to four minutes each, the corporate leaders showed support for Netanyahu and made a number of suggestions to avert layoffs via financial assistance from the government. Much concern was expressed over the wave of layoffs and the need to protect jobs, particularly in hi-tech.
At the meeting Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, presented Netanyahu with the main points of the FICC's plan to encourage employment in the periphery and ease the credit crisis.
"We should not take the easy road and focus solely on monetary or fiscal solutions to solve the crisis in the economy," Lynn said.
The FICC plan calls for structural changes and reform processes, in particular for companies in the public sector including the ports, the Israel Electric Company, and the Israel Airport Authority, as well as for increased investment in infrastructure, especially in the periphery.
"The public sector and monopolies owned by the state continue to be managed as if nothing has changed, while in the private sector, businesses are fighting for survival," Lynn said. "They should apply norms common in the private sector such as internal efficiency or pay rise freezes."
In an effort to increase participation in the labor market, the FICC urges massive expansion of employment-boosting plans beyond the Lights to Employment welfare-to-work program (the "Wisconsin Plan") and stronger cooperation with human resources companies for retraining and job-seeking.
In February, the demand for new workers continued to fall in all sectors of the economy. Manpower Israel Ltd. reported on Sunday that the demand for workers last month dropped to its lowest level since 2003. The Manpower index fell 5.9 percent in February compared with the previous month, and plunged 25.8% compared with the same month last year.
The finance sector saw the biggest decline in the demand for workers - 54.7% - followed by education - 43.1% - construction - 35% - business services - 30.6% - and manufacturing - 30.4%. The Manpower index is based on job postings published in the press and via the Internet.
Commenting on ways to ease the crisis in the corporate bond market, Yair Hamburger, chairman of the Harel Insurance Company, suggested the passage of legislation that would delay the maturity of bonds from four years to seven years, during which time they would accrue interest. According to the proposal, 40% of the debt would be repaid after four years and the remainder upon reaching maturity after seven years.
"Returning liquidity to the capital market through government support programs is the most important measure to be undertaken," said Ralph Shaaya, general manager of Citi Israel, at the meeting with Netanyahu.
In an effort to ease the credit crisis, the Israel Manufacturers Association on Sunday signed an agreement with Bank Mizrahi Tefahot Ltd. to set up a NIS 200 million fund to offer loans at preferred condition to mid-sized factories. Under the terms of the fund, factories who are members of the association will be able to borrow up to NIS 2m. at attractive terms for a period of five years. Loans will be offered at prime rate plus 0.9%. Seventy percent of the loans will be guaranteed by the fund.
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