An indoor street fair of Israeli merchandise – much of it flown over expressly for the occasion – is scheduled for Mother’s Day at Congregation Kehilath Jeshurun in Manhattan. It marks just one of a series of events planned for the New York area to help financially troubled Israeli merchants.
After the rally in Washington two weeks ago, "everyone felt energized and wanted to do something," said Riva Alper, the congregation’s sisterhood president. "Not everyone could go to Israel, so we thought the next best thing was to bring Israel to us … and let vendors sell their merchandise here."
The congregation is flying over five merchants who have shops in the Ben Yehuda pedestrian mall. They will bring their own merchandise, as well as products from
other vendors. Alper said American distributors of Israeli products have also been invited to sell their products.
"We’ll have T-shirts, jewelry, posters, Judaica and skin care products," Alper said of the event, to be held from 9 a.m. to 5 p.m. on May 12 at the synagogue, 125 E. 85 St.
The event comes as the Knesset considers an emergency economic plan to revise the country’s $50 billion budget in the face of increased defense costs to fight Palestinian violence, which in turn has kept away tourists and undermined investor confidence.
The defense budget, which in the 1990s had been reduced from 13.5 percent of gross domestic product to 8.5 percent, is now back up to 9.5 percent of GDP.
Israel has been hurt, too, by the global economic downturn, which has hit the country’s high-flying high-tech sector that accounts for 15 percent of GDP. Although the tech-heavy Nasdaq has dropped 29 percent since the beginning of 2001, Tobias Fischbein, high-tech analyst at Lehman Brothers in Tel Aviv, told Business Week that his own index of Israeli tech stocks fell 63.5 percent during the same period.
Finance Minister Silvan Shalom told the magazine that since the outbreak of Palestinian violence in September 2000, Israel has lost $5 billion in tourism and other business. High-tech exports of software and other products dropped 10 percent, the first decline after years of huge gains. And venture capital for high-tech startups, which at its peak in 2000 totaled $3.1 billion, is not expected to attract more than $1 billion this year.
But Zohar Peri, Israel’s economic minister for North America, said the economic downturn in Israel is due primarily to the global economic slump in the high-tech sector and a worldwide economic slowdown rather than to Israel’s security issues. He said manufacturing continues, and efforts are being made to convince people that supplies are uninterrupted.
"The problem is that some businessmen confuse pictures of tanks [in the streets] with supply," Peri said. "We have had no supply problems. We have had all kinds of tensions and wars in the past, and we have never had a case in which Israeli companies were not able" to fulfill orders.
Business Week warns, however, that the "danger for Israel is that its economy could slip back to what amounts to a charity project sustained by donations of the U.S. and world Jewry. Israel got by that way in the 1980s, when the currency was a joke, inflation hit triple digits, and the bank system required a bailout. To be sure, Israel is still a long way from such dire straits."
Such a report, said Peri, leads to "big confusion." He pointed out that even when 20,000 people were drafted for Operation Defensive Shield, Israel’s 10-week incursion into Palestinian controlled areas of the West Bank to root our terrorist infrastructure, that represented only one percent of Israel’s labor force.
But he acknowledged that the consumer industry in Israel is "very weak" not just because of the economic downturn but because Israelis are afraid to go to shopping malls and stores following a wave of suicide bombings.
"Jewelry stores are dependent upon tourists… because of a weak internal market," he pointed out.
This week the shekel-dollar rate rose to a record of 4.904 shekels to the dollar, and the current annualized depreciation rate is a staggering 30 percent.
Shalom predicted that the rate would begin to fall once the Knesset approves the emergency economic plan.
As part of the plan, the government proposed cutting spending by more than $1 billion and imposing new taxes to raise about $750 million. The government is seeking as well to increase its budget deficit from three percent to 3.9 percent of gross domestic product.
And there are plans to boost infrastructure spending by reducing tax breaks to settlers and residents of northern Galilee and southern Negev areas. Plans to impose a salary freeze through the end of the year were scrapped by the government after the Histradrut labor federation threatened a general strike.
Although the violence caused Standard & Poor’s, the rating agency, to recently lower its outlook for Israel from stable to negative, Dun & Bradstreet concluded, based on March data, that Israel’s economy is expected to remain strong through the rest of the year. And Moody’s said Israel’s "plentiful and stable currency reserves" of $25 billion suggest it can "withstand temporary difficulties."
Yaron Neudorfer, deputy chief fiscal officer for the Ministry of Finance in North America, said that once the Knesset approves a new budget, "We’ll look at the currency needs of the state" and decide whether it is necessary for Israel to borrow more money through the sale of additional State of Israel Bonds. He said his office has experienced a "significant increase in the number of people who are calling and wanting to help."
"People feel a need to do something to feel part of the effort," he said.
Hanna Kamionski, marketing director for consumer products at Israel’s economic ministry in Manhattan, said she, too, has been "inundated with phone calls" from Jews wanting to help Israelís shaky economy.
"Today alone, I had calls from people who want to do street fairs …," she said. "A lot of events are now being organized."
Kamionski said she has a list of Israeli products sold in the United States and the firms that import them. The importers in turn have the locations of stores that sell them.
"I tell people who ask how they can arrange to have a street fair with different Israeli foods or a fashion show to promote Israeli designers," Kamionski said.
She said she has names, phone numbers and e-mail addresses of jewelry and Judaica artists in Israel, as well as Web sites of those who have their own Internet pages. Among the new Web sites promoting Israeli products is shopinisrael.com.
Kamionski can be reached at (212) 499-5624.