The US-Israeli Joint Economic Development Group (JDEG) will meet in Jerusalem tomorrow. A US delegation, headed by US Under Secretary of State for Economics, Business and Agricultural Affairs Alan Larson, will examine whether Israel has met the terms for receiving the second tranche of the $9 billion in US loan guarantees. The US delegation arrived in Israel last night.
Ministry of Finance director-general Dr. Joseph Bachar heads the Israeli JDEG delegation. Ministry of Finance officials, Minister for Economic Affairs at the Israel Embassy in Washington Boaz Raday, and US Ambassador to Israel Daniel Kurtzer will also attend the JDEG meeting.
The US loan guarantees were granted on condition that the Ministry of Finance economic plan is implemented. The US delegation will examine reports about the reduction in Israel's budget deficit and government spending, and acceleration of privatization.
The loan guarantees are being provided in three annual $3 billion tranches. Each tranche will be transferred on the condition that Israel makes progress in implementing the economic plans and reforms. The first tranche was transferred last year.
Tomorrow's meeting is for the approval of the second tranche, which is expected to be granted. Two weeks ago, Kurtzer said the US administration "will see that Israel's economy has become healthier since the loan guarantees were first proposed."
The US delegation will cite raise the subject of the US's widening trade deficit with Israel. Since 2000, Israeli imports from the US have fallen, while exports have increased. Israeli imports from the US fell from $7.7 billion in 2000 to $6.7 billion in 2003. The US delegation will demand that Israel give US companies equal access to tenders, and that Israel do more to protect intellectual property rights.
Israel will ask that its application to join the Organization for Economic Cooperation and Development (OECD) be expedited. The US supports Israel's application, but it requires unanimous approval by all OECD members, and Israel will have to wait for OECD members to take a position.
In the wake of today's bombing of a No. 14 bus in Jerusalem, it is unclear whether Israel will request, as originally planned, that the US State Department cancel its travel warning against Israel. Israel had planned to raise the subject, in view of the loss of hundreds of millions of dollars in revenue caused by the drop in American tourists since the outbreak of the intifada in September 2000 that led to the travel warning.
The US delegation met senior Palestinian Authority (PA) officials today, headed by PA Minister of Finance Dr. Salam Fayyad. The meeting markets a thaw in US-PA relations. The US delegation asked Fayyad to improve transparency in PA financial affairs.
Published by Globes [online] - www.globes.co.il - on February 22, 2004