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Economic Conclave Approves Permanent Agency, Giant Investment Project for Israel

April 5, 1968
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The world economic conference called by Prime Minister Eshkol ended here today after adopting a long series of resolutions and initiating new projects and enterprises designed to further Israel’s economic growth. The outcome of the four-day parley which brought together some 500 leading Jewish businessmen from abroad and several hundred of their Israeli counterparts, appeared to be a new era of partnership and mutual cooperation, based not only on substantial capital investments but on infusions of know-how and programs for training Israelis in managerial and production skills.

The principal resolutions called for the establishment of the conference as a permanent and continuing body and for the creation of a giant investment company, capitalized at more than $100 million, to provide long term financing for Israeli enterprises. Sir Sigmund Warburg, of Britain, one of the backers of the company, said that it would invest mainly in new enterprises and development industries. It would not compete with local finance companies but mainly work through them, he said.

The conference, which had gone through four days of intensive discussion, considerable hard bargaining and controversy, closed on a sudden note of high emotion. It occurred spontaneously when the regional chairman for South Africa, taking leave of Prime Minister Eshkol, burst into tears. As if by signal, hundreds of white handkerchiefs appeared in the chamber as delegates began wiping their eyes. Hard-headed businessmen embraced each other as tears flowed. Prime Minister Eshkol and Finance Minister Sapir were apparently too choked with emotion to speak.

Up to that point, however, the conference was conducted on a brisk, practical level and had a long list of achievements to show for it. It decided to set up an insurance company to safeguard investments in new enterprises and to do research into their profitability; it agreed to increase the capital of a re-insurance company owned by 32 Israeli insurance firms from $700,000 to $5 million. The conference committee on textiles and leather financed some 20 investment projects and marketing agreements. These included a million dollar investment in a ladies handbag factory in Israel of which 77 percent was already subscribed.

The conference resolutions are grouped in four sections. A preamble to the first section contains the personal pledge of each delegate to continue to help and support Israel in the economic field and in all areas leading to progress, stability and peace for Israel and the Middle East. The section contains the Government recommendations including provision of incentives to investment, price stability, improvements in productivity and reduction in unit costs. There is a pledge of the progressive reduction of high protective customs and tariff duties on imports.

The third section outlines ten points on which the delegates committed themselves. These include development of their home markets for Israeli products and the mobilization of the interest of potential investors and merchandisers in Israeli products. The final chapter lists recommendations and conclusions and proposes that the Prime Minister should, from time to time, convene successive economic conferences for review and evaluation of the developing situation. It proposes that the conference presidium should meet at least once a year to review the activities of the regional committees which will function continuously in their areas. The staff of the Israel Investment Authority will coordinate all these activities.

Two conference decisions which attracted much comment were for the establishment of an insurance company to safeguard investment in new enterprises and to do research into the profitability of proposed investments, and for the recapitalization of an Israeli re-insurance firm.

Simon Mirelman, chairman of the South American committee, told the conference that he would personally follow up the conference decisions by visiting each Latin American country. Alan Bronfman. Canadian chairman, said a national committee would be established in Canada with a professional director. Victor M. Carter, of Los Angeles, chairman of the American mission, praised Prime Minister Eshkol’s initiative in calling the conference. Francois Pereire of France, said that the deals concluded by the European delegates during the conference would provide work for 2,500 people. David Sussman of South Africa, termed the conference the “Four-Days War.”

The organizing committee for the investment firm will be headed by Mr. Carter and Dr. Astorre Meyer of Italy. Subscribers to the capital shares of the new firm have already been registered from five continents. They each pledged $100.000. One-fifth of the capital will be provided by Israelis, including the Government, but Sir. Sigmund Warburg stressed that the Government will not control the firm nor even have a decisive influence.

In his concluding remarks, Prime Minister Eshkol paid tribute to “my friends, Ed Ginsberg, Abe Feinberg, Sam Rothberg and Louis Fox.” The organizations they head, he said — the United Jewish Appeal, the Israel Bond Organization and the Council of Jewish Federations and Welfare Funds — “make up a glorious chapter in the history of Jewish solidarity. Today they face new challenges. They will have to finish the job they have started and prepare for the absorption of tens, and hundreds and thousands of immigrants yet to come.”

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