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Israel eyes former Soviet market

ISRAEL'S bid to boost its economic ties with the republics of the former Soviet Union is being met with mixed results.

The state-owned Israeli telephone company, Bezeq, has signed a 10-year deal with the Azerbaijan government to set up a jointly owned subsidiary that will run the Central Asian republic's international communications. Under a separate agreement, Bezeq and International Business Machine Corp. (IBM) are planning to computerize Azerbaijan's public telephone exchanges.

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Israeli companies have been busy in Central Asia over the past three years, exporting about $100 million worth of goods to the region and setting up turnkey projects - mostly in agriculture - worth 10 times that amount.

Exports to Russia have boomed as well, reaching $188 million last year. But Israeli Chamber of Commerce officials warn of a somber future in the wake of new Russian customs procedures. Last month Russia doubled customs duties on goods from countries that have not signed a trade agreement with Moscow. Israel has not yet reached such a deal, and until it does, the Russian market for its goods will be a difficult one.

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