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California, Israel Sign Economic Development Pact

by Tom Tugend

January 20, 2000 | 7:00 pm

A pact to spur economic development throughout the Middle East has been signed by California and Israel in anticipation that Jordan, Egypt and other Arab nations will sooner or later join in the partnership.

The memorandum establishing the California/Middle East Economic Cooperation Task Force was signed last week by Shimon Peres, as Israel's Minister of Regional Cooperation, during his four-day stay (Jan. 11-14) in San Francisco and Los Angeles.

Establishment of the task force is the latest in a number of California initiatives going back to 1993, when the state set up its own trade office in Tel Aviv, to boost two-way trade with Israel.

Previous agreements, however, were bilateral, linking California with a specific country, usually Israel. The new pact is the first to foresee a large measure of regional cooperation.

With considerable optimism, the founding signatories declared in a preamble that, on the cusp of the 21st century, "The Middle East is approaching a new era of peaceful relations, political reconciliation and economic cooperation."

In broad terms, the task force is to focus on developing trade missions, organizing professional seminars, creating a regional trade database, and making available California technological expertise in the information, environmental and biomedical sciences.

Much of the groundwork for the new agreement was laid by California Gov. Gray Davis last October when he led a trade mission to the Middle East and there pitched his regional economic plan to Prime Minister Ehud Barak, Egyptian President Hosni Mubarak, and Palestinian Authority President Yasser Arafat.

Despite the governmental imprimaturs, most of the work in transforming the pact's hopes into reality will depend on private businessmen, particularly Jewish and Arab entrepreneurs in California's high-tech and other industries.

Taking the lead is Zvi Alon, chairman and CEO of Netmanage, a Silicon Valley software company and head of the California-Israel Chamber of Commerce.

One of his first tasks, said Alon, will be to plan joint undertakings with the U.S.-Arab Chamber of Commerce in San Francisco and Los Angeles.

Not all participating companies will be in the high-tech field. One of Peres' meetings in California was with the president of GAP, the trendy apparel maker, which has set up manufacturing plants in the Jordanian-Israel industrial zone, as well as Egypt, to the benefit of all three countries, said Israeli Consul Eran Etzion in San Francisco.

Both Gov. Davis and his predecessor, Pete Wilson, whose state would be the world's eighth largest economy if it were an independent nation, have launched a number of initiatives in the past to promote trade with Israel, some more productive than others.

Builders for Peace, a widely publicized federal effort to boost the Palestinian economy through private American investments and business partnerships, collapsed after four years.

Some projects to aid the Middle East economy fell apart because there were no parallel political advances in the peace process, said Etzion. He hopes that the optimism expressed by the pact's partners will be validated in the 21st century.

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