$13.9b reciprocal procurement in past 5 years

Ziva Eger

Reciprocal procurement added over NIS 12 billion to GDP and 41,000 jobs in 2013-2018, the Ministry of Economy and Industry reports.

Reciprocal procurement by foreign companies in Israel totaled $13.9 billion over the past five years, 2.3 times the amount required under reciprocal procurement agreements. 190 foreign companies made reciprocal procurement orders from 1,840 Israeli industrial companies during this period.

Figures provided by the Ministry of Economy and Industry show that reciprocal procurement in 2018 was 135% the amount in 2013.

The figures come from a comprehensive study by EY and Rotem Strategy commissioned by the Industrial Cooperation Authority in the Ministry of Economy and Industry. The study examines the contribution made by reciprocal procurement to the Israeli economy in the past five years. These companies are committed under reciprocal procurement agreements to spend 35% of the amount of their deals on reciprocal procurement. The Industrial Cooperation Authority is responsible for enforcement of reciprocal procurement, subject to the Ministry of Economy and Industry foreign investments and industrial cooperation division, headed by Ziva Eger.

The study reported that most of the required reciprocal procurement by governments is carried out in the transportation (32%) and defense (29%) sectors. 65% of all reciprocal procurement was in conventional industries, including the metal, electrical, vehicle, and aviation industries. 35% was in high-tech industries, including software, medicine, and electro-optics.

The study also showed that 484 of the Israeli companies that benefited from reciprocal procurement by foreign companies in recent years were small and medium-sized companies that signed deals ranging $1 million to $100 million.

Reciprocal procurement contributed over NIS 12 billion to GDP in 2013-2018, added 41,000 jobs, and boosted state revenues by NIS 1.7 billion. The foreign companies also contributed knowledge and work methods to local industry, gave Israeli companies a foothold in new markets, and opened the door to future deals.

Published by Globes, Israel business news - en.globes.co.il - on February 7, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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