'07 unemployment in North could hit 14%

FICC: As many as 10,000 businesses are on brink of collapse.

closed businesses 88 298 (photo credit: Ariel Jerozlimski)
closed businesses 88 298
(photo credit: Ariel Jerozlimski)
The Ministry of Industry, Trade and Labor warned on Tuesday that the unemployment rate in the North could rise to 14 percent next year as a result of the slowdown in economic activity from the war with waves of work dismissals and a halt to new jobs likely if immediate action is not taken. Given that outlook, Eli Yishai, the Minister of Industry, Trade and Labor, has set up a task force headed by Gaby Maimon, director-general at the ministry, to deal with the damages and repercussions caused by the hostilities in the North to the employment market "the day after." "The task force will identify the needs of today in order to provide the right and immediate solutions for tomorrow," said Maimon. Within the next 10 days, the task force will present a first aid plan for northerners in general and specifically to employees and small businesses. The plan also will include measures to prevent businesses from collapse. The unemployment rate in the North has been higher than the rest of the country, at around 11.5% versus 8% in the center, even before the conflict began. The president of the Chambers of Commerce for Haifa and the North said damage to the business sector in the area was devastating. "At least one-fourth, or 10,000 out of 40,000 businesses, were on the brink of collapse" said Oded Peler in a meeting with Uriel Lynn, president of the Federation of Israeli Chambers of Commerce. Following days of protest and dissatisfaction with the compensation deal offered to businesses, which have been hurt by the hostilities in the North, the FICC, today, will discuss viable compensation supplements for the commercial and services sector. During his visit to Haifa on Tuesday, Lynn said the Treasury had been stubborn in acknowledging that the compensation deal was not right and that it was mistaken in not having listened to the authentic business sector in the area. "We will fight so they will all be heard," Lynn said. Meanwhile, the Knesset Finance Committee on Tuesday gave its formal approval to the July compensation package for the agriculture and tourism sectors. In addition, the Finance Committee, approved the transfer of NIS 33.5m. to the Home Front Command to finance the rehabilitation of bomb shelters, add sirens and improve means of information available to the residents in the North. Elsewhere, the Israel Export & International Cooperation Institute said on Tuesday that exports to Arab countries were not expected to be affected by the conflict in the North. Exports to Arabic countries rose 28% in the first half of this year over last year, reaching a volume of $138m. of which 92% were exports to Jordan and Egypt. "The majority of exports are to Jordan and Egypt, which are mainly a result of the QIZ agreements, which offer the gateway to the American market," said Yehiel Asia, director-general of the Institute. Separately, the electric company, said that a number of international experts and advisers working for the company were either leaving Israel or refusing to come to Israel because of the hostilities in the North. Over the past few days, the electric company has been notified by foreign companies including Siemens, Alstom and KSB that their representatives will not be coming to Israel for the completion of various projects because of the security situation. As a result, the electric company is concerned about the advancement of work and projects at various power stations in the country.