Stanley Fischer: Exports stable despite strong shekel

"I prefer a strong economy," says Bank of Israel Governor; credits Israel's recovery from recession to cutbacks and job-sharing.

stanley fischer 311 (photo credit: Courtesy)
stanley fischer 311
(photo credit: Courtesy)
“We were surprised that exports remained stable despite the appreciation of the shekel, although it is necessary to say ‘so far,’” Bank of Israel Governor Stanley Fischer said Tuesday at the ILSIBiomed Conference 2011.
“One of the main complaints by the business sector was about the strong shekel,” he said. “But it only goes to show the strength of Israeli exports and its relative weight in the economy. To the complainers, I say that it is not possible to maintain a strong economy with a weak shekel, and I prefer a strong economy, especially when we don’t see the appreciation hurting exports.”
Fischer said the gap of 8 percent in favor of imports over exports in 1995 was wiped out within five years, mostly due to hi-tech. This gap was now 5% in favor of exports, he said.
Fischer said Israel had entered the last recession with an unemployment rate of 5.6%, a 20-year low. The unemployment rate had risen to 8% during the recession, compared with expectations of 9%, he said, because the global economic crisis did not strongly affect Israel, and thanks to various cutbacks, job-sharing and other measures by employers to avoid firing employees.
“This made it easier to recover from the recession because there is no need to hire new workers,” he said.
“When Warren Buffett bought Iscar Ltd. in 2006,” Fischer said, “Americans asked me, ‘Aren’t Israelis angry when foreigners buy their best assets?’ No. It never happens. Israelis are very proud that foreigners buy their assets. If you think about acquisitions, you won’t find a more enthusiastic environment. That’s an advantage, in addition to the economic stability and support for investors.