Special Report Despite War in Lebanon, Israel is Maintaining the Tempo of Its Peacetime Economy and

The Israel Economic Office here reported that, however the military and political struggle in Lebanon is decided, Israel is winning its campaign to maintain the tempo of its peacetime economy and to conduct international business as usual.

Despite the war, during the past month Israeli industry has experienced no appreciable dropoff in production or exports. Increased per worker productivity of more than eight percent, coupled with the smooth functioning of internal and overseas transportation and services, has achieved overall output of 95 percent of normal and almost completely eased the foreign trade consequences of Israel’s mobilization, officials here said.

For the first time in Israel’s 34-year history, conflict has barely inhibited local production or adversely affected overseas commerce. Industrial exports (excluding polished diamonds) were boosted in the first six months of 1982, amounting to $1,703 billion compared to $1,654 billion during the first half of last year, or a rise of three percent. June exports were a solid $274 million, a dropoff of only 14 percent from June 1981, which was an exceptional month, according to the report.

Exports this last month, despite the hostilities, included: electronics, $36 million, or 55 percent over the same month of 1981; textiles and ready-towear, $36.4 million, four percent ahead of last year; minerals, $20.7 million, up 19 percent; chemicals, rubber and plastics, $52.8 million, plus three percent; wood, paper, light industrial products $30.3 million, a 20.7 percent increase; and food products, $29 million, the same as June last year.

EFFICIENT MANPOWER CALL-UP

The officials said that the continued production in almost all industrial branches in Israel is attributed to highly efficient and selective manpower call-up with many key specialists exempted or released in a mobilization affecting less than 15 percent of workers in industrial sectors.

An additional reason is the availability of sufficient transport for the effective distribution of raw materials and shipments of finished goods, as well as substantial inventories resulting from enhanced capacities among Israel’s modern production export branches.

Israeli plants and merchants are expected during the coming weeks to supply substantial quantities of various manufactured goods for reconstruction activities in Lebanon, a further demonstration of continued economic capacities despite the war effort, the report said.

It is anticipated that Israel’s exports will reach $4 billion (excluding diamonds) in 1982, barring unforeseen military considerations which will represent an annual increase of seven percent in real terms.

Israel’s exports of goods and services in 1981 reached $10.9 billion or approximately $2,700 per person, one of the world’s highest per capita export performance. Negotiations are also being completed in Israel to assure wage and price stability for the coming year, the officials declared.