Here's The Pitch!

ISRA EL DIGEST

California aims to increase trade with Israel.

Specially compiled by The Jerusalem Post

—$1 EQUALS 2.9760 NIS (shekels) - Close Price 2/23/94 —

Shake-Up Won't Stop Expansion

The latest Israel stock market
cession in the country's tradi-
shake-up will not substan-
tional trading partners in Eu-
tially affect the current eco-
rope.
nomic expansion because
Ms. Gal-Yam rejected Eco-
growth is based on an increase
nomic Models Director Ya'acov
in industrial productivity, jobs
Sheinin's prediction that the
and private construction,
country's rapid growth will
Treasury economic adviser
stop in 1995 as a result of '
Tzipi Gal-Yam said last week.
stock and real estate bull mar-
The Treasury said the econ- kets which divert money away
omy recovered rapidly during from capital investments into
the second half of last year due
purely financial speculative
to immigration and the
activity.
prospect of peace.
"In our opinion, the process
Immigration contributed to
of economic expansion is based
the rapid increase in local de-
on healthy long-term founda-
mand and in expanding the la, tons," Ms. Gal Yam said. "The
bor supply; while the accord
influence of the recent shocks
with the PLO enabled the
in the securities market is
opening of new markets in
short term, and they don't
Asia and Eastern Europe.
have the power to change sub-
These new markets have
stantially the long-term trends
made up for the economic re-
we published."

G

oing into business with
Israeli companies is not
for the faint of heart, but
done the right way, the
payoff can be both satisfying and
profitable.
The caveat and the encour-
agement come from Sherwin
Pomerantz, who was recently
named the state of California's
trade representative in Israel,
under contract to the California
Israel Exchange (CIX) estab-
lished by Gov. Pete Wilson more
than a year ago.
Although California's annu-
al gross domestic product is 12
times that of Israel, CDC's busi-
ness leaders view Israel not as
a charity case but as a boom-
ing trade partner that can ben-
efit California's sluggish
economy.
Current estimates are that
trade between the two part-
ners is roughly in balance and
runs between $500 million
and $1 billion a year. Mr.
Wilson's office says that the
export-import trade accounts
for some 10,000 jobs in Cal-
ifornia.
Mr. Pomerantz, a voluble,
54-year-old New York na-
tive, sees as his main pri-
ority increasing Israeli
imports from California,
thus creating more jobs in the
state. Another is to raise aware-
ness among California indus-
trialists that Israel can serve as
a commercial bridge between
the U.S. and Western Europe
because it is the only country in
the world to enjoy free-trade
agreements with both power
blocs.
The bridge building is now ex-
tending to Eastern European
countries, which Israeli busi-
nessmen have been cultivating.
Added Israeli inducements for
outside investors are govern-
ment subsidies and what Mr.
Pomerantz describes as "the
best tax package in the world."
California's aerospace and de-
fense industries have long been
major sellers to Israel, and large
electronic/computer corpora-
tions such as Intel and Microsoft
are expanding their subsidiaries
in Israel.
But you don't have to be a
high-tech giant to make a splash
in Israel, according to Mr.
Pomerantz. For instance, Is-
rael's supermarket chain, Su-
persol, features an annual fair
of U.S. food and other products,
which have been supplied so far
by a New York exporter. Mr.
Pomerantz is working on Su-
persol to switch the $3 million
package to California suppliers.
In the reverse direction, the
Jerusalem Stone Company,
which manufactures composites

Economic Talks in Trouble?

A Palestinian about-face dur-
to the autonomous areas, since ,
ing economic talks in Paris
the economy of the territories
could result in the economies
is heavily dependent on that
of Israel and the autonomous
market.
entity being closed off from
However, to avoid turning
each other, Finance Minister the autonomous region into a
Avraham Shohat said.
source for the smuggling of
Treasury and other public
cheaper goods, Israel is de-
officials have called for keep-
manding the Palestinians
ing the Israeli economy open
adopt common import tariffs.

Unemployment Plummets To 9 %

More products made in Israel could be heading
to California.

that look like Jerusalem stone
but weigh only one-tenth of the
original, is looking to set up a
small manufacturing facility in
the United States. Pomerantz
is talking to the company's ex-
ecutives and hopes to convince
them to locate in California.
In the past, the path of joint
U.S.-Israel ventures has not al-
ways been smooth. Pioneers on
both sides can recite horror sto-

California's
aerospace and
defense industries
have long been
major sellers to
Israel. Intel and
Microsoft are
expanding their
subsidiaries there.

ries of miscommunications, ac-
rimonious exchanges, failed
deals and lawsuits.
Language difficulties and
huge distances were partly to
blame. Mr. Pomerantz says also
that "Israel has a different cul-

ture, just as does France or Eng-
land."
He says too many Israeli com-
panies were used to a market-
ing philosophy that focused on
landing the first order, then let-
ting things slide.
Diaspora businessmen, for
their part, used to look on their
Israeli counterpart as a lands-
man and ignored or relaxed the
strictly businesslike arrange-
ments they would demand if in-
vesting in their own or any other
country.
Both American and Israeli
businessmen have become more
mature and sophisticated in
their mutual dealings over the
past decade, Mr. Pomerantz
says. Still, any U.S. executive
would be wise to engage a con-
sultant in Israel who speaks
both languages, literally and cul-
turally, and can steer the client
around local pitfalls.
Currently, 21 states have co-
operative economic, cultural or
academic exchange agreements
with Israel, and a number of
these have part-time represen-
tation in Israel.
Only Massachusetts has a
large, full-time operation in Is-
rael, but Mr. Pomerantz hopes
California will soon catch up. ❑
Jerusalem Post

Unemployment in Israel fell
dramatically to 9 percent in
the last quarter of 1993, com-
pared with 11.4 percent in the
same period of 1992, Finance
Minister Avraham Shohat an-
nounced.
Mr. Shohat, who pre-empt-
ed the Central Bin-eau of Sta-
tistics' announcement to be a
harbinger of good news in the
after two weeks of stock mar-
ket declines, noted that the
latest figures mean that un-
employment averaged 10 per-
,

cent last year.
"I think this is the most
heartening announcement
possible to hear in the areas of
employment and economic
growth," Mr. Shohat said.
The drop in unemployment
translates into more than
100,000 new jobs.
"This brings down unem-
ployment to the level that ex-
isted prior to the great
immigration from the Soviet
Union," Mr. Shohat said.

Evergreen, a joint Canadian-
Israeli investment company,
signed a letter of intent to in-
vest $12 million in Zenah, a
Yediot Aharonot holding com-
pany. Zenah is owned by
Yediot managing director
Ze'ev Mozes.
Evergreen will invest $2

million in return for which
Zenah will issue it shares rep-
resenting 5.26 percent of its
capital. The investors will put
an additional $10 million into ;
Zenah in return for bonds con-
vertible into shares in a Zenah '
subsidiary.

Evergreen Invests $12 Million

A Deal for Decision Systems

tion Systems, and will market
Decision Systems Israel re-
a wide range of products in-
ported it signed an agreement
cluding navigation, database
for establishing a joint venture
and multimedia systems that
with the Israel and U.S.-based
will primarily be aimed at con-
communications firm Geotek
Industries for the marketing
sumers traveling in private ve-
hides.
of value-added products to ac-
The first product will be the
company Geotek's telecom-
Triplayer, a navigation sys-
munications technology. "
The new company, an equal tems for cars using Global Po-
sitioning Systems technology
partnership between the two,
developed at DSI.
will be called Mobile Informa-

