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The International Monetary Fund (IMF) has issued a surprisingly optimistic projection for Israel. Accordingly, the Israeli economy will grow 5.4% next year, compared with anticipated growth of just 0.7%. What is surprising is that the Finance Ministry based its budget proposal for the coming year on projected growth of 4%, and that the Bank of Israel was severely critical of even this level. The Bank of Israel as well as economists in the business sector estimate that there will be growth of only 2-3%. The IMF expects that the Israeli economy will recover more rapidly than any other developed country, and that unemployment in Israel will drop to 8% next year compared with 9% this year. The Fund also recommends that the Israeli government should not cut its budget (due to fears that tax collection will drop), but is also strongly against expanding the budget. This week the Israeli company "Pharmos" sold the American company "Bausch & Lomb" the rights to two pharmaceutical products against eye infections and allergies, and another molecule which it is developing, for $49 million. The medications are Lotemax and Alrex, as well as another substance, which is active in medication marketed by the company in the US. The substance is nearing the end of clinical trials and is intended for treating eye infections, which may be the result of bacterial infection. The Israeli Company "Sinal" has begun to market biometric identification systems (using fingerprints) to business companies in Moslem countries in the Persian Gulf region, including Bahrain and Dubai. According to projections, sales are expected to grow substantially to other Gulf States, to the tune of millions of dollars. Contacts with the Gulf States were formed in Britain and distributors from these Arab states asked to purchase security and monitoring equipment from Israel. The product, which identifies employees, was developed a year ago at a plant in Yoqneam and is also sold to Israeli companies. The system has been translated into Arabic. This week, 10 days after winning a tender for establishing cellular communication infrastructure systems in Mexico, the Israeli company "H. Mer" was awarded another project in South America: the company will perform work for cellular communications operators in Brazil (using GSM technologies) to establish sites worth $15 million. Further agreements are expected to be signed with these operators, so that the scope of the work will eventually reach $30 million. The Israeli bio-technology company QBI has signed an agreement for the development of cancer medication on behalf of "Astrazneca", which was founded by the Swedish company "Astra" and the British company "Zneca" and is considered to be the second largest company in the world in the development of cancer-treatment products. The deal between the Israeli company and "Astrazneca" is estimated to be worth millions of dollars. Sales by "Astrazneca", which is considered to be one of the five leading pharmaceutical companies in the world, are in the region of $15.8 billion annually. The Israeli company "Ormat", which specializes in the construction and operation of geothermal power stations, particularly in the Third World, has announced that it is about to complete negotiations for the purchase of a complex of six geothermal power stations in Imperial Valley, South California, for $41 million. Ormat is currently one of the three leading companies selling electricity from geothermal sources in the US. "B.V.R. Systems", which specializes in developing military simulation systems, will supply the European aircraft manufacturer Aermacchi, with a multi-task simulator, designed for use in training aircraft. As part of the agreement, worth $7.1 million, "B.V.R." will also supply a trainer and logistical support for three years, and a precise replica of the cockpit. The Israeli company "Olympia Real Estate Holdings" has purchased a site in the Hungarian capital Budapest, planning to build 120 apartments at an investment of $5 million. "Olympia" is currently building a residential project, including 4,000 apartments in the Polish capital Warsaw, in a joint venture with two other Israeli companies - "Rubenenko" and "Ben Yakar Gat". "Chromagen" of Kibbutz Sha'ar Ha'amakim, which manufactures solar water heaters, will establish a plant in Spain for manufacturing solar heating panels at an investment of ? 5 million (Euro). The plant is to be established in the town of Esija in Andalusia as a partnership with local businessmen, and will be called "Chromagen Espania". The plant will supply solar energy systems for heating water, initially in the Andalusia region and later throughout Spain. The plan expects to expand its operations in the near future and supply other European countries, North America and South America with such energy systems. The Ministry of Finance issued a special statement for overseas investors who wish to invest in Israeli hi-tech companies within the framework of Israeli venture-capital funds, that they will be tax exempt until 2004. The decision is aimed at lifting the hi-tech sector out of the doldrums. Finance Minister Sylvain Shalom said that assistance to the hi-tech sector will help promote growth, adding thousands of jobs to the employment market. The Manufacturers' Association announced that industrial exports since the beginning of 2001 have declined by 12% in comparison to average exports during the last quarter of the year 2000. Exports began to drop during the second half of the year 2000, following six months of growth. Thus, 2001 is expected to close with a 3% drop in exports compared to the average for the year 2000. Last week, the rate of exchange for one US$ reached an all-time high at NIS 4.370. For the first time since October 1998 it surpassed the previous high of NIS 4.367. Since the beginning of September the dollar has risen by 3%.
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