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9/18
1998

208 Detroit Jewish News

uite 150

48 32 2

Israel economic
forecasters are closely
watching the unraveling
world financial
situation.

NECHEMIA MEYERS
Israel Correspondent

sraeli papers are still full of ads
placed by hi-tech firms seeking
new employees, but, for the first
time in many years, some firms
are also firing people.
This is primarily because the
American companies that own many
of them are downsizing in the face of
the current international economic
crisis. So Motorola, for example, is
dismissing employees in both the
States and in Israel.
Thus far, however, Israel has been
relatively unaffected by the turmoil in
overseas markets, though there has
been a major decline in sales to the
Far East and a lesser falloff in other
parts of the world. And while there is
concern about the rapidly deteriorat-
ing situation in Russia, it should not
add significantly to Israel's problems
because exports to the former Soviet
Union are still very small, amounting
to less than 10 percent of total sales to
Asia.
But there are some Israelis who will
be hurt. One of them is Mordechai
Yona, the former head of the local
Association of Contractors and
Builders.
Yona bought some 40 percent of
the shares of a company that owns
Hotel Moscova, shares that are

certainly worth a lot less now
than when he purchased
them. Moreover, most of
the debts owed to
Israeli companies by
customers in
Moscow will proba-
bly never be repaid.
The crisis in the
former Soviet Union
also has a positive side
where the Jewish state is
concerned. The lines of
potential immigrants are
already forming outside the
Israeli Embassy in Moscow. And
if past experience is any guide, more
immigrants from that part of the
world will give a boost to the econo-
my in Israel. This can be seen, for
instance, when you visit Kiryat

Weizmann, an industrial park on the
outskirts of Rehovot that houses
nearly three dozen hi-tech firms. In
a good many of them, the in-house
lingua franca is Russian; thus in
Access Technologies,a computer
company there, the few sabras on
the staff have already acquired a
passable knowledge of that Slavic
tongue.
But will there be overseas investors
willing and able to finance new sci-
ence-based industries at Kiryat
Weizmann and elsewhere? Apparently
yes.
This is true even though Israel is
not a low-wage country. If all factors
are considered, it costs an electronics
company $8.70 an hour to employ a
worker in Israel, as compared to $20
an hour in Germany or $1 an hour in c—/
China.
But where productivity is con-
cerned, the Israeli isn't far behind the
German, and, at the same time, west-
erners are no longer enthusiastic about
setting up shop in the Far East. This is
because they have discovered that
business sectors in Asia are apt to be
corrupt and unreliable.
As Haaretz economics commenta-
tor Guy Rolnik pointed out recently,

"Israel is the only emerging market
left in which proper disclosure is
almost of American quality. Foreign
investors will not wake up to discover
that a major Israeli firm has billions in
undisclosed debt or has been subsi-
dized for years by a sister company, as
happened to them with companies in