American investments in Israel in 1978 increased by 50 percent compared with the previous year and reached an estimated $120 million, according to Dr. Zvi Dinstein, Israel’s economic minister to the U.S. and Canada, and Uriel Lynn, director general of the Government of Israel Investment Authority for North America.
Declaring that 1978 was “a very good year for North American investments in Israel, Lynn, addressing a press conference here this morning together with Dinstein, said that “in 1978, many more American companies realized that Israel is an ideal location for their research and development and high-technology operations.” He said that the last year’s investments included investments by National Semiconductor, Motorola, Chromalloy and Baldwin and were part of 50 new projects.
“This is a 50 percent increase over the $80 million invested in 1977,” Lynn said, noting that total foreign investment in Israel rose to an estimated $165 million, an increase of 43 percent over $115 million invested in 1977.
Both Dinstein and Lynn predicted that 1979 will even witness greater increase in investment in Israel by American companies. According to Dinstein, “hundreds of American firms are already involved in Israel economy,” among them firms from the “big league of companies” in America.
REASONS FOR THE INCREASE
According to Lynn, the reasons for the increase in American investment in Israel could be attributed to the liberalization of the Israeli economy in an effort to move toward a free market system, including total elimination of foreign currency control for foreign investors; the weakening of the impact of the Arab-boycott against Israel in view of the anti-boycott laws passed by the American government the prospect of peace in the Mideast; and Israel’s duty free access to the European Economic Community (EEC).
Highlighting the new investments by U.S. companies in 1978 were projects in the high technology field, involving either new investments or expansions of existing facilities, Lynn said. He added that 1978 also signified a diversification of investments, a broadening beyond the high technology industries.
He observed that there is increasing interest in financial and real estate ventures. Canadian investors are about to buy the government’s share in the largest mortgage bank in Israel a group of investors from the midwest has indicated a desire to buy the government owned Maritime Bank a U.S. insurance company is finalizing negotiations to buy on insurance company in Israel.
There is also substantial private investment in real estate and construction projects, Lynn said. A major U.S. company is exploring the possibility of setting up a village for senior citizens on the shores of the Mediterranean, similar to such complexes which it has built in U.S. Projects related to tourism are now being boosted, possibly with a view to the expected influx of tourists lured by reduced airfares and the prospect of peace. Hyatt Hotels will manage its first hotel in Israel in the Haifa beach area.
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