"If the objective of the countries of the EU is to bring Israelis and Palestinians closer, and to promote peace, calls for a boycott run completely counter to this interest. Peace and good relations between the two nations cannot be achieved through penalties and boycotts. It would be better for them to change their approach on the issue," said Manufacturers Association of Israel president Zvika Oren today in response to widespread calls around the world for a boycott on Israeli goods.
"In the West Bank, there are 600 Israeli enterprises, which employ 6,000 Palestinians, who earn double what they could make at Palestinian enterprises. If there is a boycott on these enterprises, their employees will also be affected."
Oren's remarks, like those of other manufacturers, suggest that if a boycott against Israeli goods, it is at the margins. "I estimate that it is possible to count the number of Israeli companies operating from the West Bank and which are exposed to a significant boycott at fewer than ten. The problem is that the talk developing on the issue is disproportionate to the real situation. Israeli enterprises operating in the West Bank export $250 million annually, a third of which goes to Europe. This amounts to two tenths of a percent of Israel's annual exports, so even if there is a widespread boycott of Israeli goods produced in the West Bank, the macro effect will be very marginal," he said.
The Manufacturers Association today expressed concern that the threat of an extensive boycott could cause Israeli industry greater damage than the boycott itself. "Obviously, this is worrying because such a situation is liable to have an adverse effect on the business environment, and entrepreneurs are liable to vote with their feet. If an entrepreneur calculates whether to invest in Israel, given the situation of the dollar, regulation, and costs, another factor, such as a boycott, might enter the equation," said Oren.
While manufacturers are trying to depict the threat of a boycott as insubstantial, they are more worried about problems at home. The Manufacturers Association's quarterly survey conducted in recent weeks among 170 manufacturers predicts that enterprises' workforces will shrink in the first quarter of 2014. This comes after 22% of manufacturers said that they had to fire employees during the fourth quarter of 2013.
The latest survey found that 21% of manufacturers predict a drop in workforces in most industries, except for electronics, where they forecast hiring. Manufacturers also report difficulty in hiring skilled workers (80%). The shortage of skilled workers is especially prevalent in the quarrying and building materials, rubber and plastics, metal, and electric and electronics industries.
The survey also reports that 55% of small and mid-sized enterprises faced difficulty in securing new credit in the fourth quarter of 2013. In the same quarter, 45% of large enterprises reported difficulty in securing new credit, and 40% reported difficulty in meeting their credit frameworks.
"It seems that the coming year will be problematic, because expansion is forecast in the world, but we come to it with our tongues hanging out," said Oren about the survey's data. "Competitiveness is eroded because of the strong shekel, the extensive regulation, and high production costs. In this situation, we cannot participate in the expansion predicted in the world's markets."
Published by Globes [online], Israel business news - www.globes-online.com - on February 3, 2014
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