Gov't push for aid to industry hurt by strong shekel

Last week, the shekel rose to its highest against the dollar in nine years.

The government will establish a joint inter-ministerial committee for the swift implementation of an emergency program to assist industrial companies with the damage caused by the weakening of the US dollar against the shekel. "The ministry is worried about the long-term consequences and the possible damage to Israeli industry caused by the shekel's steady appreciation against the dollar over the past one and a half years," said Industry, Trade and Labor Minister Eli Yishai at the cabinet meeting on Sunday. Last week, the shekel rose to its highest against the dollar in nine years. Since January 2006, the shekel has appreciated more than 14 percent against the beleaguered dollar. Manufacturers Association of Israel expects the fall of the US dollar to cost exporters $1.4 billion from lost orders this year, or about 4% of the total anticipated, and in turn halt the recruitment of 15,000 new employees to work in the industry. In response to the damage to industry's exports as a result of the weakening of the US currency, the government this week approved the proposal by Yishai to set up a team with representatives of the Industry, Trade and Labor Ministry and the Finance Ministry. The team will examine ways of financing the implementation of the recommendations put forward by the "Artzi Committee" in an effort to secure the industry's competitive position. The Artzi committee presented a set of recommendations regarding measures tailored to assist in particular small- and medium-sized manufacturers who were suffering from the shekel-dollar exchange rate. The assistance program, which is budgeted to cost the government NIS 460 million, includes a NIS 200m. emergency fund to assist small- and medium-sized companies, advisory services on how to insure against currency risk, a non-governmental fund for currency hedging and doubling credit lines for exports to high-risk markets, assistance in the international marketing of products, aid for participation in exhibitions, cooperation meetings, and adding personnel to commercial attaches.