|
contents | news | |||||||||
| Israeli Economy Needs Innovation “The ability of Israel to strengthen its economy and achieve national economic security is now directly linked to the country’s ability to encourage enterprise, innovation and competitive, sustainable markets, ” Glenn Yago, Senior Koret Fellow and Director of Capital Studies at the Milken Institute said in opening a conference, Financing Israel's Future: Policy Innovations for Economic Development, organized by Koret Israel Economic Development Funds (KIEDF) at the Israeli Knesset in Jerusalem. According to three new economic studies published by KIEDF Koret Fellows, Israel must move more swiftly down the path of structural reforms that will enhance competitiveness and raise productivity. This requires reducing the dominant and distorting government role in budget and regulatory policies, which presents obstacles for entrepreneurs trying to open businesses, enter financial markets and compete across economic sectors. “Over 90 percent of listed companies are closely held by majority shareholders holding close to 70 percent of the shares, ” said Yago, who has supervised the work of the Fellows. “Only Finland and Switzerland have higher rates of banking concentration. The corporate bond market in Israel is only 3 percent of GDP compared with 70 percent in the U.S., 28 percent in the UK and 40 percent in Japan.” In the new studies, KIEDF Koret Fellows discussed policy issues related to urban revitalization, credit discrimination and securitization, asserting: Small businesses make up more than 96 percent of Israeli firms, but receive less than one-quarter of local credit. Less than 1 percent of all borrowers received more than 70 percent of all credit in 2003. Securitization of assets reached 220 percent of GDP in the U.S in 2004. By contrast, cumulative securitization in Israel from 2000 to 2004 accounts for just 4 percent of 2004 GDP. Israel's inner cities are crumbling, distressed areas are defined by 10-year-old statistics, and local laws prevent private or philanthropic involvement in urban revitalization by means of business improvement districts or tax incentives. write your comments about the article :: © 2005 Construction News :: home page |