A Loud Silence?

ISRAEL. DIGEST

Specially compiled by T e jervisalem Post

R.J. KING SPECIAL TO THE JEWISH NEWS

—

Fourier President
Jimmy Carter

A

virtual moratorium of si-
lence over the Arab Boy-
cott of Israel has left a
question in many minds.
Why, when the Jewish com-
munity can raise millions of dol-
lars in record time to move
Russian Jews to Israel, has the
community remained so lax
over an Arab-sponsored eco-
nomic embargo on trade with
Israel?
Several Jewish business and
political leaders maintain that
the community did not need to
be vocal on this issue because

of the laws enacted by
President Jimmy
Carter in 1977 which
forbid American corn-
panies to participate
in the boycott.
Others declined to
comment on the
record.
"The 1977 laws
had two effects: One
was that compa-
nies went out and
cleaned up their
act to comply with
the laws and the
second was that
companies made
sure they had
no interests in
Israel," said
Howard Bern-
stein, president of the Associ-
ation of North America — Israel
Chambers of Commerce, Inc., a
newly formed corporation in
Chicago representing 11 cham-
bers in the United States and
Canada.
"Unless you did business
with Israel and then backed off,
you had no problems," Mr.
Bernstein said. "Most firms
chose one way or the other and
stuck with it. The 1977 laws
were very effective in that
sense. Companies knew where
they stood and to avoid prob-
lems some just never went in."
Since 1948, an Arab eco-
nomic embargo of Israel has
been in effect, with all 21 mem-
bers of the Arab League, except

Egypt, participating.
The boycott puts a ban on all
trade with Israel and a sec-
ondary boycott that prohibits
Arab nations from doing busi-
ness with any company that
does business with Israel.
Among the companies that
participated at one time: Pepsi,
Coca Cola, Ford, Xerox, Union
Carbide and most Japanese au-
tomakers and electronic man-
ufacturers.
'The boycott was never an is-
sue Israel highlighted because
it was so worried about what
was going on with its survival
and the requisite defense con-
cerns," said one Israel fund-rais-
er, who asked not to be named.
"There was no great conspira-
cy on behalf of Jewish leaders
to remain mute on the boycott.
Some have said the leaders
were bowing to the interest of
U.S. corporations, but really the
boycott was pretty much put to
rest in the late '70s."
Peace talks have prompted
Arab leaders to call for the elim-
ination of the boycott. Still, Is-
rael claims the ban has hurt the
country economically.
According to the Federation
of Israel Chambers of Com-
merce, the boycott reduced Is-
raeli exports and foreign
investments by 10 percent a
year. At that annual percent-
age rate, the country lost more
than $40 billion over the last 45
years. 1=1

$1 EQUALS 2.8600NIS (shekels) - Close Price W24/93 —

Shohat Seeks Speedy Bank Sale

Finance Minister Avraham
Shohat has asked the Bank of
Israel to speed up the licens-
ing process for the seven
groups bidding to purchase
control of United Mizrahi
Bank.
The request was made due
to the high interest the
prospective sale has generat-
ed and the previous abortive
effort to sell the bank, ex-
plained Eli Yoseph, the Trea-

sury's spokesman.
Last year, when the gov-
ernment sold the bank to busi-
nessman Gad Ze'evi, the Bank
of Israel - for unspecified rea-
sons - refused at the end of the
long sale process to grant him
the license to run the bank.
Mr. Shohat's request specifi-
cally referred to the speedy
handling of the licensing pro-
cedure.

The Consumer Price Index
shot up 1 percent in August,
following moderate indexes in
the preceding three months.
Based on the indexes for the
first eight months of the year,
the annual inflation rate for
1993 is estimated at 11 per-
cent.
Economists expected the
higher index based on sea-
sonal factors, such as higher
fruit and vegetables prices. In
addition, the latest shekel de-
valuation started pushing up
housing prices.
Israel economists foresee

one-digit inflation for next
year based on current trends.
Potential exists, they say, for
even lower inflation as a re-
sult of the agreement with the
Palestinians.
The market will benefit
from cheaper goods imported
from the territories, which will
replace more expensive local
products. Another factor
which will also contribute to
lower prices will be the relax-
ation of the closure of the ter-
ritories, which will increase
the flow of territory workers.

CPI Up 1 Percent

Unemployment Down To 10 Percent

Businesses Respond
To Health Reforms

Unemployment fell to 10 per-
cent in the second quarter
from 11 percent in the previ-
ous quarter, reflecting the im-
pact of the closure of the
territories and stricter unem-
ployment compensation crite-
Ha.
According to the Central
Bureau of Statistics, 19,700
new jobs were created during
the second quarter, following
an increase of 39,000 jobs in
the previous quarter. During

RUTH LITTMAN STAFF WRITER

Sharoni Appointed Bonds President

B

ert Bruseloff, president of
Home Specialty Inc., be-
lieves the Clinton admin-
istration's health-care
package will seriously threaten
his downtown enterprise.
His company, which manu-
factures clocks and pictures, of-
fers health benefits to
individual employees but not to
their families, as the president's
plan recommends.
"We can't afford to provide for
families," said Mr. Bruseloff,
forecasting layoffs if the pro-
posal makes it through Con-
gress without significant
revisions.
David White, Home Special-
ty's insurance representative,
said workers "already have ex-
cellent benefits — PPO (pre-
ferred provider organziation)
with a $10 co-pay." The health-
care reforms would only dilute
their coverage, he said.
Like many local business-

men, Mr. Bruseloff worries that
complying with the proposed
system, which would require
employers to pay for 80 percent
of their workers' health-insur-
ance premiums, will jeopardize
the workers it aims to protect.
He's not the only one who
thinks the plan will hurt the
economy. A Gallup poll of small-
business owners reveals their
views on health care and pay-
roll cost flexibility. The survey
was taken for the National Fed-
eration of Independent Busi-
nesses, a nonprofit trade
organization representing
600,000 small businesses na-
tionwide.
According to the survey, 35
percent of U.S. small business
owners say they would hike
prices to accommodate a 3.5
percent payroll tax increase pro-
posed by President Clinton.
Fourteen percent said they
would lay off employees, and 11

percent said they would freeze
or reduce wages and salaries.
"Most of the jobs that are go-
ing to be affected are low-wage,
low-skill, entry-level jobs — the
poor. OK, now they have health
insurance, but they don't have
a job," said Charles Owens of
the Michigan Office of the Na-
tional Federation of Indepen-
dent Business.
But small business owners
like Paul Kohn of Quality
Kosher Catering in Southfield
say it's too early to predict how
health-care reforms will affect
them.
"I favor a change because
change is needed, but I'm sure
the changes will be different
from what has been proposed.
The pragmatics have to be
worked out. From the way it
sounds right now, it's the small
businessman who is going to be
bearing the brunt of this
change," he said. ❑

the first half of the year, the
number of people employed
grew 3.3 percent compared to
the last half of 1992 and stood
at 1,729,300.
By contrast, the number of
available workers stopped
growing and even shrank by
900 to 1,921,000, as immigra-
tion slowed. Compared to the
first half oflast year, the work
force grew 4.5 percent, re-
flecting the immigrant influx.

Finance Minister Avraham
Shohat has appointed Indus-
try and Trade Ministry direc-
tor-general Nati Sharoni as
the next Israel Bonds presi-
dent. He will replace Meir
Rosenne on Jan. 1.
Mr. Sharoni, who took over
the ministry more than a year
ago, had his eye on the Bonds
presidency even before ac-
cepting his present job. Mr.
Sharoni noted that when he

took his job a year ago, he had
informed minister Micha Har-
ish of his interest in the Bonds
presidency.
He added that he is not
leaving the ministry out of
pique but with satisfaction at
its achievements. "The min-
istry is in a period of record ac-
tivity, creating optimal
business conditions," Mr. Sha-
roni said.

The cabinet's legislation com-
mittee this week approved the
proposal to create a Free Ex-
port Processing Zone.
But businessmen promot-
ing the zone criticized the com-
mittee's proposal, claiming
that, if unchanged, it will lead
to the zone's failure. David
Yerushalmi, CEO of the Israel
Export Development Corpo-
ration, who pushed the con-

cept and wants to run the con-
cession, said that excluding
foreign financial services will
kill the zone.
According to Mr. Yerushal-
mi, without foreign financial
institutions to finance the
zone, it will be impossible for
the businesses located there
to raise the necessary cash to
establish themselves.

Panel Approves Free Trade Zone