BUSINESS
Detroiters Seeking Changes
For Israel's Housing Industry
it
KIMBERLY LIFTON
Staff Writer
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283-1970
D
etroit area busi-
nessmen Harold
Berry, Sam Nivy and
Paul Zlotoff are prepared to
manufacture and send 300
homes to Israel.
They have worked out
details in the United States,
hired an American partner
in Israel and an additional
liaison to work with coop-
erating American and
Israeli companies. They
even found a Texas-based
firm to produce the
manufactured homes, and
they made bids in Israel for
the project.
Their bid was rejected.
"Each time we are ready to
go with it, they provide us
with a setback," said Israel
project liaison Edith Rosaen.
"Their requirements are
unrealistic. The Israeli
government wanted to have
control over an open line of
credit, which means they
could draw money on the
line of credit for any reason
without our approval."
The Israeli government's
strict requirements and con-
tinual changes in building
codes have put a halt to
plans that the company,
Israel Housing Inc., believes
would help their company
provide living accommoda-
tions for the massive influx
of Soviet emigres to Israel.
Mr. Cohen said the year
1990 brought 150,000 Soviet
Jews to Israel. This year,
300,000 Soviets are expected
and, in the next five years, 1
million Soviets are projected
to make aliyah to Israel.
Like many other American
businesses, the founders of
Israel Housing Inc. are
baffled by the roadblocks
they have discovered while
attempting to do business in
Israel.
Yet Howard Cohen, presi-
dent of Operation In-
dependence, an interna-
tional alliance of business
leaders working to make
Israel economically in-
dependent, thinks he under-
stands the problems.
In a speech last week to
members of the American
Israel Chamber of Com-
merce of Michigan, Mr.
Cohen offered some solu-
tions. He said Israel's
leaders must find a new
definition for national
security.
Without a new direction,
Mr. Cohen said, Israel "will
be in for some serious trou-
ble.
"Israel is the only place
where Jews haven't pro-
spered," Mr. Cohen said.
"Israel needs to get to a
market system in an orderly
way. This means more econ-
omic independence and less
government intervention.
"We are calling for
changes in government
policy," Mr. Cohen said.
"We are begging for no
government plans. We want
to tell the government to get
out of planning, get into
policy and allow Diaspora
America to work with the
Israelis."
A report released earlier
this month advocates a pri-
vate rental housing market
in Israel. The Fogel report,
conducted by Israel finance
"Someone is going
to have to beat on
the Knesset to
make them
understand what
business is."
Torry Duffy
experts Aaron Fogel and
Schlomo Schattner, recom-
mends massive land sales by
the government, reductions
on tax levies and the enact-
ment of a national building
code.
Also suggested are
changes in the capital
market structure, which
would include establishing
industry mutual funds for
investment.
Under Mr. Fogel's plan,
the rental industry would be
privatized, leaving the
Israeli government with no
involvement. There would
be no rent subsidies.
The report was unveiled at
an Operation Independence
policy dinner in Jerusalem
for members of the Knesset,
academia, the business
community and the Ameri-
can Embassy. Mr. Cohen
said Knesset members are
expected to discuss the rec-
ommendations in the coming
months.
Operation Independence,
founded by Detroit philan-
thropist Max Fisher, lobbies
the Israeli government on
behalf of organizations that
wish to improve the climate
for doing business in Israel.
01 encourages investment
in Israeli business, helps
Israeli firms find skilled in-
vestment professionals and
helps them understand the
North American investment
community.
Today OI is focusing atten-
tion in the Middle East on
the huge demand for hous-
ing. For the first time in his-
tory, Mr. Cohen said, Israel
will spend more on absorp-
tion than on the military.
"Absorbing Jews from the
Soviet Union is as important
as protecting ourselves," Mr.
Cohen said. "Israel is talk-
ing about change, which is
good. But it is too slow. The
problems are huge. Every
night, when the joy comes
because the Soviet immi-
grants land, the problem
grows."
Shelly Jackier, executive
director of the American
Israel Chamber of Corn-
merce of Michigan, said her
office has been flooded with
phone calls from business
people who have faced set-
backs similar to Israel Hous-
ing Inc.
"We can't answer all of
their questions," Mrs.
Jackier said. "Things keep
changing."
Detroiters Torry Duffy and
Alex Itkin, a Soviet emigre,
have been negotiating for a
year to manufacture
machinery and construction
equipment in Israel.
Mr. Duffy and Mr. Itkin,
both engineers, formed
Kairos Development Inter-
national a year ago to iden-
tify and set up cultural rela-
tionships, trade agreements
and joint ventures between
American companies and
organizations in Europe and
the Soviet Union.
Part of the Kairos plan
was to establish business
ventures in the Middle East.
"It makes good sense to go
into Israel," Mr. Duffy said.
"Israel needs so much of the
same things that the Soviet
Union needs. We felt it was
important to provide a
manufacturing plant in
Israel for the local economy
and for export purposes. We
want to provide materials
that would be used for hous-
ing."
Mr. Duffy said Kairos has
made more progress in the
Soviet Union than in Israel
due to Israeli government
stipulations.
"Someone is going to have
to beat on the Knesset to
make them understand what
business is," Mr. Duffy said.
"We hope to work things
out. We are looking for an
Israeli partner. For now, the
program is on hold." ❑