'US will continue to buy Israeli goods despite economic slowdown'

"I am impressed with the progress and growth of the Israeli economy," US Chamber of Commerce President Thomas Donohue tells 'Post'.

Despite Tuesday's sharp interest-rate cut by the US Fed, sparking fears of a US recession, the US economy is experiencing a moderate slowdown and Americans will continue to buy Israeli goods, according to US Chamber of Commerce President Thomas Donohue. "I am impressed with the progress and growth of the Israeli economy and the business opportunities it creates for American companies," he told The Jerusalem Post by telephone Wednesday from Davos, Switzerland, where he is attending the Davos Economic Forum. "Coming back to the US, I want to tell US business people that Israel is a good opportunity for investment, taking into account current efforts made on the economic and geopolitical front." "I understand the growing fears of Israeli exporters regarding the weakness of the US dollar and uncertainty of the US economy," Donohue said. "But even with a slowdown in the economy, we are still going to buy more Israeli goods than anyone else." Donohue concluded a three-day visit to Israel this week, as the guest of the Israel-America Chamber of Commerce. He met with President Shimon Peres to discuss possible cooperation on alternative energy technologies. Peres promoted his ambitious "Valley of Peace" project, designed to create thousands of jobs for the Palestinians. "We aim to increase our involvement and cooperation regarding Israeli-Palestinian economic projects and business opportunities to stimulate the Palestinian and Israeli economy," Donohue said. Commenting on the turbulence in world markets, he rebutted growing fears of the US falling into a recession and spreading to the global economy. "The US economy will not fall into a recession, but we will see a slowdown," Donohue said. "The Federal Reserve and the government will adopt serious constructive steps as part of a comprehensive stimulus program as early as this or next week, which will temporarily promote growth of the financial institutions and deal with unemployment. "As its next step, the US Fed will further cut interest rates by the end of the month, although in a less dramatic move [0.25% or 0.50%]." Following the Fed's interest-rate cut and expectations of another cut in the US lending rate, the shekel-dollar exchange rate dropped 3.2% in morning trading on Wednesday to NIS 3.67, before closing at NIS 3.71. Manufacturers Association of Israel president Shraga Brosh and the Israel Export Institute on Wednesday urged Bank of Israel Governor Stanley Fischer to cut interest rates by 0.5% at the end of the month to ease the sharp appreciation of the shekel against the dollar, which is damaging exporters' profits. "We have a global currency situation," Donohue said. "What we need is for the dollar to find a good balance, and I believe that we will get there. A weak dollar is good for US manufacturers and for imports, lowering the US current account deficit. But the dollar is going to strengthen, though not back to its previous level." During his visit to Israel, Donohue met with Industry, Trade and Labor Minister Eli Yishai, Likud chairman Binyamin Netanyahu, Finance Ministry director-general Yarom Ariav, the Palestinian-American Chamber of Commerce and private business people. Speaking at the 8th Herzliya Conference this week, Donohue urged the Israeli government to deal with intellectual property issues in an effort to establish a better atmosphere for the American business community. "On this issue, will Israel stay on the watchdog list for violating numerous patent laws?" he asked. "Will the government of Israel choose to respect regulations and join in to fight these problems? They have the rationale to choose wisely. Israel was able to turn around its economy in the last few years by tackling very hard issues and reforming industry, the banking system and promoting development projects. "Fundamental reality of the global economy has turned into a battle of demographics and competition for human talent. The countries and the industries that get the talent will win," Donohue said.