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	Israel		Info-Prod Country Guide
CHARACTERISTICS   INDICATORS   THE ECONOMY   PRINCIPAL SECTORS   INVESTMENT ISSUES   PROJECTS   PROSPECTS

Investment Issues Privatization While the Israeli economy has been growing in recent years, a number of fundamental problems remain to be resolved. The primary difficulties include the drain on the public sector by the Israel Defense Forces (IDF) (20 cents out of every dollar are spent on military expenditures); and government ownership of Israel's largest companies; e.g., Israel Electric Corporation, Israel Aircraft Industries, Oil Refineries Ltd., El Al (the national airline), and Bezeq (the telephone and communications company). Furthermore, the largest labor union in Israel, the Labor Federation (Histadrut) controls other major industries and services such as Tnuvah (an agricultural marketing cooperative), and Kupat Holim (a huge system of health care clinics and hospitals). The Israeli government's willingness to take the first steps toward privatization was evidenced by the government's sale of its interest in several of the largest banks in Israel. In 1992, the government sold its US$ 200 million stake in Israel Discount Bank Ltd., and in 1993 it sold off approximately 20 percent of the shares of Bank Hapoalim and Bank Leumi, respectively, in public offerings on the Tel-Aviv Stock Exchange. Additionally, the government sold its 51 percent interest in Mivnei Tassiyah, a major industrial real estate developer and its 26 percent interest in Bank Mizrahi, the fourth largest bank in the country. Today, in total, Israel has approximately 100 government companies that are slated for privatization either through sale or through the issuance of shares to the public on the stock exchange. Previous Chapter Contents Menu Next Chapter

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