Israel has been advised to adopt an American blueprint for economic recovery if it hopes to attract foreign investments.
Fight inflation, expand free trade and privatize government-owned enterprises, Israelis were told this week at a meeting of the American-Israel Joint Economic Committee, which has met every six months since 1985 here or in Washington.
Richard McCormack, the undersecretary of state for economic and agricultural affairs, headed the U.S. delegation to the talks. Speaking at a news conference after the talks concluded, McCormack said that under existing circumstances, chances are slim that foreign entrepreneurs would invest capital in Israel.
“The Israeli economy needs to take drastic steps to cope with the great challenge of aliyah,” he said. He recommended greater flexibility in the job market so that hundreds of thousands of immigrants can find employment.
He called for further cuts in the annual inflation rate and greater exposure of the country to imports to make the local economy more competitive.
McCormack said foreign investors expect a profit margin similar to what they can get in Singapore or Greece. Otherwise they will not come here in significant numbers.
Herbert Stein, another member of the American delegation, suggested that further privatization would rid the government of an economic burden and advance the economy generally.
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