Newspaper article THE JOURNAL RECORD

Booming Economy Makes Israel Attractive to Investors

Newspaper article THE JOURNAL RECORD

Booming Economy Makes Israel Attractive to Investors

Article excerpt

NEW YORK -- Benjamin Gaon, the head of Israel's largest industrial concern, is ready to deal.

The president and chief executive of Koor Industries searches the globe for partners who wouldn't have given him a second look just a few years ago. Now he's giving them a chance to tap into what's been one of world's fastest growing economies.

Business is booming in the Holy Land, helped by a strong economy, an educated workforce and promises of peace in the region. That's giving foreigners an abundance of opportunities, turning the land of milk and honey into the land of milk, honey -- and money. Big U.S. names -- like McDonald's, Intel and Planet Hollywood -- are setting up shop in Israel. Many Israeli companies are taking their shares to an eager Wall Street, and lucrative state-owned companies like the El Al airline could soon follow as they are privatized. "I'm not looking for charity. I'm not looking for a bar mitzvah present," said Gaon, whose company trades on the New York Stock Exchange. "Give us the same chance as a Scottish share, Korean share or Portuguese share. If you don't like it, sell it." Although smaller than the state of New Jersey, Israel has become attractive to investors because of its export-driven high-tech industries and an increasingly prosperous, consumer-oriented population. Since 1990, the economy has grown by more than 40 percent, according to government figures. Unemployment has dipped below 6 percent, and per capita income is on par with Great Britain at nearly $16,000 a year. Analysts point to three factors behind the economic boom: the arrival of tens of thousands of well-educated immigrants from the former Soviet Union, the opening of vast markets in Europe and Asia and a decade of economic reforms to open Israel's centralized economy. Whether the success will continue depends largely on Prime Minister Benjamin Netanyahu, whose surprising election last May disappointed many business leaders. Netanyahu, a business graduate of Massachusetts Institute of Technology, took office promising dramatic moves to open up Israel's economy. But his tough policies toward the Palestinians have placed a question mark over the Mideast peace process -- an issue crucial to investor confidence. "The peace process was the essence of the growth in Israel," Gaon said. The recent fighting between Israelis and Palestinians only worsened fears among people seriously considering Israel for business. "There had been a wait-and-see attitude," said Ehud Houminer of Columbia University Business School. "I think now it's a deeper and longer wait and see. People want concrete movement to establish stability." Trying to quash such notions, Israeli Finance Minister Dan Meridor recently met with U.S. investors to reassure them that the government is serious about peace and working hard to unload state-held companies. …

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