Re: your economy sucks.
- From: "JBgarbuz" <jgarbuz@xxxxxxxxxxx>
- Date: Fri, 30 Mar 2007 13:03:30 -0800
"Doc Martian" <docmartian@xxxxxxxxxxx> wrote in message
news:FB6Ph.10766$yo3.1741@xxxxxxxxxxx
how do you like being a parasite state. you know the way out, and its notby
acting like nazis.Israeli Economy Shrugs Off Scandals
cheers!
Doc <
Enjoying record foreign investment and healthy growth, business has been
able to ride out a deluge of sleaze and corruption in government--so far
By Neal Sandler
Updated: 4:00 p.m. PT March 29, 2007
An unprecedented wave of scandals and corruption involving senior public
officials is shaking Israel s political establishment. Police are
investigating President Moshe Katsav, Prime Minister Ehud Olmert, two
cabinet ministers, the police commissioner, and the Income Tax Authority
director, on allegations ranging from rape and sexual harassment to breach
of trust and political cronyism. [Both the tax director and police
commissioner have stepped down.] The latest scandal to hit the headlines
concerns Finance Minister Avraham Hirchson, who is suspected of involvement
in an embezzlement case.
The political turmoil doesn t yet appear to be affecting Israel s
four-year-long economic expansion. Fueled by a solid flow of foreign
investment, which hit a record $22.5 billion last year, the economy
continues to thrive. Indeed, on Mar. 20, the same day Hirchson was grilled
for the first time by the police fraud unit, the Bank of Israel raised its
2007 economic forecast to 5% growth. The only negatives cited by the central
bank were fears about a slower-than-expected recovery in Israeli tourism and
moderating U.S. economic growth. There was no mention of the local political
situation. But among businesspeople there s growing concern that the
scandals could start to bite. "There is no guarantee the economy will
continue to perform over time totally detached from the events," says a
worried Jacob Perry, board chairman of Mizrahi Tefahot Bank, the country s
fourth largest. Adds Lev Leviev, chairman of Africa Israel Investments, a
leading real estate and construction company, "Israel s image has been
tarnished and we are trying hard to minimize the damage."
"Atmosphere of Sleaze" So far, so good. The Tel Aviv stock market continues
to trade at near-record levels. Israel s current account surplus widened to
a record $6.8 billion last year, due largely to the export boom led by the
country s high-tech industry. Local high-tech startups raised $1.62 billion
in 2006, their best showing in five years. Even unemployment, which hovered
at double digit levels only a few years ago, dropped to 7.6% in February,
the lowest level in nearly a decade.
"It s remarkable how resilient the economy and financial markets have been,
given the current political atmosphere of sleaze," says Richard Gussow,
senior analyst at Nessuah Zannex, a Tel Aviv investment bank.
That s true at a macro level, too. The shekel is at its highest level
against the dollar in over five years. Attempts by the Bank of Israel to
stem the currency s growing strength by cutting interest rates to their
lowest levels in the country s history have so far met with little success.
The government also reported a budget surplus in the first two months of
this year, as tax receipts continue to run at record levels. The sharp
upsurge in the fourth quarter of 2006 all but erased the negative effect of
last summer s war in Lebanon.
Prime Economic Climate The steady stream of positive news seems to be
keeping damage from the political fracas to a minimum. "Investors are
continuing to focus on the strong fundamentals, and as long as the
government sticks to sound fiscal policies, they remain on board," says Leo
Leiderman, chief economist at Bank Hapoalim, the country s largest.
Even better, foreign investors who have traditionally shied away from Israel
in times of instability appear to be taking little notice of the political
developments. "There has never been a better economic climate here for
investment," says Stanley Gold, president of Shamrock Holdings, the Disney
family investment fund. According to Gold, Shamrock s Israeli portfolio had
a return of 31% last year. Shamrock Holdings is reportedly planning a third
fund of at least $250 million for further investments in Israel.
Still, the high-flying economy has done little to help the waning popularity
of Prime Minister Olmert, who has seen his support dwindle to single digits
over the handling of last summer s war in Lebanon and because of the
allegations against him of influence peddling and shady real estate deals.
Most analysts believe that his days in office may be numbered. Though his
cabinet is still intact, a report on the war due out this summer from a
government-appointed panel could bring down Olmert s coalition and lead to
early elections. The latest polls show that former Prime Minister Benjamin
Netanyahu would likely be returned to power if elections were held today.
Widening Income Gap Few would dispute that it was Netanyahu s policies as
finance minister under former Prime Minister Ariel Sharon that laid the
foundation for the current boom. But at the same time there is concern that
Netanyahu s trickle-down economics have increased poverty and widened the
income distribution gap. Some 20% of Israel s population is living below the
poverty level, the highest percentage of any Western country.
"The trickle-down theory has failed everywhere in the world, including the
U.S.," argues Labor Party Knesset Member Avishai Braverman. The renowned
economist-turned-politician believes the policy has done well by Israel s
growing class of super-rich but has only served to widen the gap between
rich and poor in a society which once prided itself on equality.
With many of Israel s top leaders under investigation and the Olmert
government increasingly fragile, it could be just a matter of time before
political instability starts to take a toll on the economy. If that happens,
Israelis could pay a heavy price for the transgressions of their leaders.
Copyright © 2007 The McGraw-Hill Companies Inc. All rights reserved.
--
Posted via a free Usenet account from http://www.teranews.com
.
- Follow-Ups:
- Re: your economy sucks.
- From: Binyamin Cramer
- Re: your economy sucks.
- References:
- your economy sucks.
- From: Doc Martian
- your economy sucks.
- Prev by Date: BAHA'I ANTI-SEMITISM EXPOSED....
- Next by Date: The tide of sewage was a more elaborate work accident.
- Previous by thread: your economy sucks.
- Next by thread: Re: your economy sucks.
- Index(es):
Relevant Pages
|
|
