Effect of Peace on Israel’s Economy Under Consideration

Government economists and private industry in Israel have begun to give serious consideration to the effect that peace in the Middle East would have on Israel’s economy. The private sector envisages an important market for Israeli goods in the Arab countries, especially Egypt. Efraim Dovrat, economic advisor to the Finance Ministry, said today that a special ministry team is already studying the economic repercussions of peace on the budget.

According to Dovrat, it is agreed that there would be no reduction in defense expenditures for the first few years after a peace settlement. He noted that Israeli withdrawal from occupied territories would require additional investments to transfer bases and installations and for the acquisition of new equipment. Another team is preparing plans for possible mutual development projects to be undertaken jointly by Israel and its Arab neighbors.

In the private sector, the Israeli irrigation corporation, Tahal, says it is prepared to assist Egypt and other countries to develop their water resources. Aryeh Gissin, director general of Tahal, observed that “they know very well who we are and what our achievements are.”

The electronics industry is convinced that it can market many of its products in Egypt and other countries once peace is established. The Tadrian and Amcor Companies each believes the refrigerators it makes would appeal to the Egyptians and other producers see a lucrative market for all kinds of electrical appliances in Egypt.

The Ti’us Co., which manufactures medical equipment and appliances, says it is ready to export thermometers, hypodermic syringes and stethoscopes to Egypt. It also sees a market there for its plastic goods, suitcases and travel Kits. Israel’s textile industry presently has all the orders it can fill but is ready to expand production to meet anticipated demands from Egypt. The food industry meanwhile has begun a study of Egyptian eating habits. They assume that appetizers and Italian-style pasta made in Israel would be welcomed by Egyptian consumers.

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