Israel business community supports Labor

[UPI / DANAH SAADAWI]

JERUSALEM, May 26 (UPI) -- A Labor victory in Israel's national
elections would boost the economy and attract foreign investments,
leading Israeli businessmen said Sunday.
Senior executives from Israel's top companies took out advertisements
in the Israeli press endorsing Prime Minister Shimon Peres and the Labor
Party.
Koor Industries President Benyamin Gaon said he is firmly behind
Peres.
His company is one of Israel's largest and most profitable holding
companies.
Gaon said the Labor government has succeeded in replacing a socialist
economy with a market-based economy, has revitalized capital markets and
sent a signal to the world business community that Israel is a stable
country.
``Peace is the fundamental essence of everything,'' Gaon said. ``We
cannot afford risking the peace. The politicians are paving the way and
business people have to cement the peace.''
Gaon said a change in leadership would delay the implementation of
economic reforms.
Despite high inflation, and large trade and budget deficits, Israel's
economic woes do not feature in Peres or incumbent Benyamin Netanyahu's
electoral campaigns.
Instead, both candidates have focused on security issues and the
peace process, with the right-wing Likud insisting Peres' peace moves
cannot guarantee Israelis security.
Economic indicators are not favorable as inflation hovers at 12
percent to 14 percent, the trade deficit in the first quarter of 1996
stood at $2.9 billion and the budget deficit stood at $4 billion in
1995.
Some analysts are skeptical the peace process will affect the
economy.
Zev Galon, associate director at the Institute for Advanced Strategic
and Political Studies, an independent research institute that focuses on
Israel's economy, said a drastic change in economic policy is needed.
``We do not believe the peace process is the main indicator in terms
of the economy because all predictions made since Oslo have come to
nothing,'' Golan said.
The 1993 peace agreement signed between Israel and the Palestinians
in Norway is known as the Oslo accord.
The Israeli government, whether under Labor or Likud, will have to
cut the budget deficit, reduce inflation and stop relying on foreign
aid, Golan said.
``The Israeli economy is a fool's paradise with the single greatest
problem being the foreign aid which is artificially supporting the
economy,'' he said.
Israel receives $3 billion in U.S. aid annually, as well as $2
billion in loan guarantees, according to a report published by Golan's
institute.
Israel receives an additional $4 billion a year from Germany,
diaspora Jews and charities, the report said.
The business community believes the peace process advocated by the
Labor Party will bring economic stability, said a public relations
executive representing Israel's most profitable firms.
``The majority of top executives are supporters of Peres and Labor
because they support the peace process,'' the executive said, speaking
on condition of anonymity. ``The peace process will reduce expenditure
for security and the money will be allocated for other purposes.''
A top executive, who has not decided which party to support and who
spoke on condition of anonymity, said Israel's economic problems are
common to most developed countries
Though he favors Likud politically, the executive said the economy
can only flourish under peace.
``Only continuos peace will bring more companies into Israel and will
bring us success,'' he said. ``Israel's problems are common to other
countries in the world but nobody will trust us and do business with us
if there is war.''
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