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The Finance Ministry and that Bank of Israel have welcomed the prospect of membership in the OECD with open arms, but not everyone is celebrating the news. According to Ayelet Nir, chief economist of Israeli Brokerage and Investments, joining the OECD would probably lessen the flow of foreign investment in the Israeli market. Once Israel becomes a member, she said, it would no longer be classed as an "emerging market" by global stock market indexes. When viewed as a fully developed market, Israel would lose weight on indexes like Morgan Stanley's MSCI world index.
"In the context of emerging markets, Israel is seen as something very special," Nir told The Jerusalem Post. "We're not really an emerging market, rather we're a safe investment. But as soon as we're seen as a developed market, Israel's weight on the index of Morgan Stanley will be smaller.
"Those who invest in Israel as an emerging market will stop investing in Israel. They will look at Israel's figures and smaller weight, and ask themselves whether it is worth investing in the Israeli market. In terms of the flow of finances into the market, this could affect us negatively."
Nir acknowledged the many positive results that would result from Israeli membership in the OECD, saying most of the advantages would take place in the actual process of adjusting the Israeli economy to the OECD's demands.
"But we live in the stock market, and we see risks there," she added.
"The Finance Ministry is looking at the wider picture of joining OECD," Nir said. "During this process, many changes can be made that would be positive. But these changes cost money; the whole process costs money."