BUSINESS
Setting Up Shop
In Israel
For American
firms doing
business in
Israel,
opportunities
and obstacles
abound.
NEIL RUBIN
Special to The Jewish News
38
FRIDAY, JANUARY 10, 1992
on by Bob Lynch.
A
s Israel pushes ahead
with its housing plan
for Soviet Jewish im-
migrants, the country has
shifted focus to the tremen-
dous challenge of creating the
half million jobs needed for
its newest citizens. One of the
key elements in that effort
will be the American business
community.
The good news is that A-
merican business executives
and investors stand ready to
tap into what could be the
world's best educated im-
migrants, a prerequisite for
Israel to adequately employ
this disproportionately pro-
fessional wave of arrivals.
But those executives and
investors point out that all
is not well as they try to
work with the Jewish state.
They say that business with
Israel has improved in re-
cent years, but that they are
still hindered by bureaucra-
tic logjams, a government
crippled by infighting and
an underdeveloped market-
ing structure.
To say the least, those are
not welcome sentiments by
those hoping to help Israel
out of its jobs crisis. With an
official unemployment rate of
10 percent — and rumors of
40 percent for the immigrants
— many are coming to a
disheartening conclusion:
Israel is at serious risk of not
providing enough work for
the immigrants. That is an
embarrassing reality for the
state founded as a beacon of
opportunity for the Jewish
people.
Many are hoping that the
extraordinary vocational
needs of the immigrants will
push the government to fi-
nally relinquish control over
large portions of the busi-
ness sector. Such a step
would boost the confidence
of potential investors, who
could set up the factories
and research centers needed
to employ Soviet Jews.
Such was the message
that Israeli Prime Minister
Yitzhak Shamir brought to
the United States during his
recent visit.
Urging U.S. industrialists
to "shake off outdated im-
pressions and stereotypes,"
Mr. Shamir declared that
the Israeli economy is
"opening itself up to inter-
national trade and competi-
tion to a truly extraordinary
extent."
His government is "firmly
committed to streamlining
the bureaucracy," he stress-
ed, and is aiming "to reduce
inflation and abolish all re-
maining exchange controls."
Yet whether or not inter-
nal forces will let the gov-
ernment go as far with such
steps as Mr. Shamir might
like remains to be seen.
If all goes well, the im-
migrants will have nothing
short of a phenomenal im-
pact on Israel's economy
and even its international
standing as a high-tech
country.
At least 20 percent of the
immigrants are high-tech
professionals. That trans-
lates into about 35,000 sci-
entists and engineers a year.
Their numbers will soon hike
the country's overall percen-
tage of such professionals to
6 percent of the employment
sector, more than three times
the U.S. rate. Such numbers
should create a magnet for
research and development
countries around the world.
The new Israelis, in fact,
are already making their
presence felt. Gross national
product will grow this year
between 7 and 9 percent and
there has been a 25 percent
growth in overall in-
vestment in the country.
"Everything will have to
grow in proportion to the
newcomers. This means
huge investments and huge
opportunities," explained
Yair Saroussi, who helps
manage Israel's overseas
investments and economic
affairs through the New
York City-based Israel
Trade Center.
The Israeli government
has responded to its newest
challenge with a string of
programs to lure investors
who will subsequently help
create jobs for the im-
migrants.
In September, 1990, the
Knesset approved the
Nissim Plan, named for the