patth@ccnysci.UUCP (Patt Haring) (09/04/89)
INJECTIONS OF S.AFRICAN CAPITAL CONTINUE INTO ISRAELI REAL ESTATE AS INVESTMENT RULE SIDE-STEPPED An amicable out-of-court settlement has been reached that will allow Corex, a company representing about 60 South African Jewish investors, to continue pumping money into real estate projects in Israel, writes a US correspondent. In May the investors filed suit in Israel's High Court, charging that a new Israeli policy requiring that all South African investment be directed to industry would force them to take heavy losses on partly completed real estate projects. The agreement was reached in July, but because the parties tried to keep it quiet, it did not become known until August 8, when the Jerusalem Post found out about it. One reason for hushing up the accord was the fear that other companies which channel South African money into Israel would press for a reconsideration of their rejected applications to invest in real estate projects. Another reason was the way that Corex prevailed - through the personal intervention of Mendel Kaplan, head of the powerful Jewish Agency. Kaplan is a wealthy South African who moved to Israel when he was elected to that post. Descended from the pre-state funding apparatus, the Jewish Agency receives funds from diaspora charities such as the United Israel Appeal and the United Jewish Appeal with which it purchases land and makes other investments in Israel. Kaplan petitioned a number of high officials. He admitted to the Jerusalem Post that he had appealed directly to Finance Minister (and Deputy Prime Minster) Shimon Peres. The paper said that Kaplan himself was given special permission to take $500,000 out of South Africa to expand a squash centre in Haifa. The center is a Corex project. Isaac Bloch, Corex's president, said that "the settlement puts us in a position to carry on with all our projects." But a treasury spokesman said that funding for only three of five projects had been approved. It is not clear whether Corex won exemption from the rule that limits project approval to one year. Since Israel's establishment in 1948, South African Jews have been given special dispensations to send money there in the form of donations and investments. In 1976 Israel and South Africa signed an agreement regulating the investment process and opening it to investors outside the Jewish community. The new regulation that upset Corex was propounded in December by the Israeli Investment Authority in order to guide the money from the glutted real estate sector that South African Jews have long favoured to the faltering productive side of the economy. This is not the first time that Mendel Kaplan's business interests might be said by some to have been in competition with his Zionist commitment. In 1984 his Johannesburg-based Gateway International company began flying bargain flights between Tel Aviv and Swaziland. His attempt to draw passengers from South African Airways and Israel's El Al quickly foundered, however - the victim of a falling dollar-rand exchange rate, reported the Jewish Chronicle of London on February 22, 1985. Meanwhile, some South African Jews have found a commercial outlet for their funds - in Ariel, the largest city on the West Bank. Those Israelis who believe they have a right to this land call Ariel the "capital of Samaria". Development Capital Industry (DCI), a company with offices in Johannesburg and Santa Monica, California as well as in Ariel, has brought at least $6m into the town of 8,000. Yoav Blum, who heads DCI, has persuaded South Africans to pump the money into a $3.5m commercial center and a $2.5m candy factory, Barkan Sweets Ltd. Both are under construction. In addition to raising money abroad, Blum has succeeded in bringing South African immigrants to the town by giving them a chance to buy a shop in the commercial center. They now own one-third of the shops and the supermarket and many live in the luxurious neighbourhood Blum has named Afriel (for Africa Ariel). Blum told the Jerusalem Post that the Palestinian Intifadah has not proved an obstacle to DCI's projects, because "the entire government of Israel, from left to right, is behind us." And even if tensions mount, he said, "all the buildings are rented, the machinery is portable, and at the end of the day, you can be safely back home in your Tel Aviv penthouse." However, in its August 11 report, the paper noted that a high tech industrial part, completed a year and a half ago, is still without tenants. In 1984, Ariel declared itself a twin city with Ciskei's Bisho, and now Israel's cash-strapped development towns are trying to see if twinning with South African towns will bring them the same bonanza that has blessed Ariel. In exchange for the legitimisation of sistership, South African cities have promised to invest in the towns, according a July 2 article in the Israeli paper Hadashot. According to the report, Dror Fogel, mayor of the small town of Ramat Yishai, is organising the effort. He claims that so far he has recruited 20 development towns to twin with South African cities. Located away from the main urb!6<ers and originally filled with Jews from Arab countries, Israel's development towns have never been given the funding to take off. After Israel occupied the West Bank in 1969, the lion's share of spending has gone there, for Jewish settlements. Meanwhile, the Arab, or Sephardic Jews have continued to comprise an underclass, although they are not nearly so downtrodden as Palestinian Israelis. "You must have heard of apartheid?" Hadashot's reporter challenged Mayor Fogel. "I am not disturbed by this," the mayor answered. --- Patt Haring | UNITEX : United Nations patth@sci.ccny.cuny.edu | Information patth@ccnysci.BITNET | Transfer Exchange -=- Every child smiles in the same language. -=- -- Patt Haring | UNITEX : United Nations patth@sci.ccny.cuny.edu | Information patth@ccnysci.BITNET | Transfer Exchange -=- Every child smiles in the same language. -=-