In light of the new year, the Jerusalem Post assembled a panel of experts to discuss predictions for the Israeli economy.
The local economy is going through difficult, even turbulent, times. The end of the Jewish year 5772 is the perfect time to analyze the trends in the economy over the past 12 months. It is also the time to forecast the economic trends for 5773. For this purpose, The Jerusalem Post assembled a panel of experts to discuss these issues.
The panel consisted of the following members:
Rinat Ashkenazi, senior analyst of overseas markets of the Excellence investment house
Eran Bar-Tal, economic editor of Makor Rishon and senior lecturer in business administration
Ori Greenfeld, head of the economic department of the Psagot investment house
Shauli Katznelson, deputy director general of the Israel Export and International Cooperation Institute
Nissan Levy, deputy CEO and head of the finance division of The Bank of Jerusalem
Gad Propper, chairman of the Israel-European Union Chamber of Commerce and Industry
Moderator: John Benzaquen, The Jerusalem Post
The Jewish year 5772 is coming to an end. There is a Jewish saying that “A year has passed with its curses (maladies); a new year enters with its blessings.” The Chinese when they want to curse someone say, “May you live in interesting times.” Mr. Katznelson, are we living in interesting times, and what from your point of view were the main curses or problems in the past 12 months?
Shauli Katznelson: In this country, we are always living in interesting times. With regard to your other question, the biggest problem from an economic aspect was the huge debt crisis in Europe, which one way or another is affecting the global economy. During the past 12 months, our growth rate fell compared to the previous year.
This is understandable, as our whole economy revolves around our export trade, which amounts to approximately 25 percent of GDP. If exports fall, industry has to cut production and lay off workers, which means a fall in consumer spending, more cuts in production, more layoffs, and more falls in consumer demand.
Mr. Propper, you have wide experience in exporting industrial products. If the markets in Europe and the US are problematic, why not switch to markets in the Far East that are less affected by the global economic crisis?
Gad Propper: My experience in industrial exports is limited to processed foods. We have a problem in exporting food to non-kosher markets because eating habits differ in each country. At Osem, we opened a plant in The Czech Republic to produce processed foods adapted to the tastes and habits of the Central European markets.
With regard to your comment about switching, this is easier said than done. One cannot switch export markets by pressing a button. When you talk about switching markets, I presume you are referring to transferring our export trade or some of it from Europe and North America to Asia. It is difficult to switch exports from one market to another in the blink of an eye. It is doubly difficult to penetrate the markets of the Far East.
Penetrating Chinese markets is very difficult, but a switch is difficult even from markets in the UK, for example, to Germany or Sweden because a product that is suitable for the Swedish market may not be suitable for the German or British consumer and vice versa. So when we talk about switching markets, the problems involved should be taken into account.
I also want to point out that exports are perhaps the main problem, but they are not the only one…Read More>>