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Finance Ministry Director General Yarom Ariav has a dream: to turn Israel into an international financial center. His goal is for the financial industry to join high tech, bio-technology and nano-technology - and for finance to become a leading growth engine for Israel's economy.

Ariav's dream of turning Israel into a Middle Eastern version of Singapore started taking shape before the recent crisis in world financial markets. The plan is supposed to be implemented after the cabinet approves the report of the so-called Ariav Committee on reforming capital markets and finance. The recent crisis actually makes the hopes of Tel Aviv becoming a major financial center even more important, partly because Israel is increasingly considered a rising financial power, but also since the reigning centers have suffered so badly.

Becoming a major financial center would help encourage economic growth and raise the percentage of the civilian workforce employed in the financial sector from 3% to 5%. It could encourage the return of Israelis working in the industry abroad and prompt the aliyah of others - as well as draw in large sums of capital. The dream envisions a large number of workers joining the upper rungs of the salary scales, too.

Ariav has been selling his proposal at almost every opportunity. Two weeks ago he did so in Boston and New York with leading businessmen, and before that he told his story to International Monetary Fund representatives in Jerusalem.

In September 2007 Finance Minister Roni Bar-On appointed Ariav to chair the committee on capital market reforms, sometimes referred to as the second Bachar Committee. Its goals are to modernize Israel's markets and to make them more competitive, open, efficient and attractive to global investors. Another main goal is to develop and export financial service industries.

In order to implement these goals, a number of steps need to be taken to make Israel's financial industry more attractive to foreign investors. It needs to broaden its non-bank credit sector and reduce the centralization in financial mediation services. Changes also need to be made to the Bachar reforms, including increasing competition in the banking sector.

In addition to Ariav, the committee includes four regulators: Yadin Antebi, the Commissioner of Insurance and Capital Markets in the treasury; Zohar Goshen, the chairman of the Israel Securities Authority; Rony Hizkiyahu, the supervisor of banks in the Bank of Israel; and Antitrust Commissioner Ronit Kan. Other members include Professors Eugene Kandel and Amir Barnea; former treasury director general David Brodet; Bank of Israel Deputy Governor Zvi Eckstein; Deputy Attorney General Didi Lahman-Messer; and the treasury's legal adviser, Yemima Mazuz.

The committee is scheduled to present its recommendations by August.

Ariav revealed his vision at a conference held in Jerusalem, which was attended by representatives of the IMF and the Bank of Israel.

He explained that in the U.S. and Singapore, 5% of the workforce is employed in the financial sector. In Britain the figure is 4.2%, while in Israel it is only 3% - some 83,000 people. And it is quite a good living. The average wage in the sector here is NIS 16,700 a month gross, over twice the average wage of NIS 7,600 a month.

Nowadays, the financial sector is responsible for 5% of GDP, amounting to NIS 30 billion. Ariav emphasizes that Israel has many advantages, including an educated workforce and an entrepreneurial culture.

Israel also has a large number of workers who speak foreign languages, and Sunday is a workday. He also referred to the Jewish connection in the financial industry, as well as in academia.

Of course not everything is quite so rosy: the geo-political situation here is still shaky, the government is not particularly stable, there is too much bureaucracy, there is no single financial regulator, a lack of competition in the financial sector, a high national debt, and a lack of financial education. Of course Ariav considers it his job to solve as many of those problems as he can.

In any case, such a dream will take years to implement, but the treasury views the goal as both realistic and attainable in the long term.