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Bank of Israel Governor Stanley Fischer called on ultra-Orthodox leaders to increase employment rates among both men and women in order to address the widespread poverty within this community.

Fischer was speaking at a convention sponsored by the Hamodia newspaper yesterday.

Wearing a black skullcap, Fischer told those present, mainly ultra-Orthodox business managers, that the Haredi community's low employment rates, particularly among men, are responsible for making it the poorest sector in Israeli society, more so than even the Arab sector.

In 2008, 60% of Haredim were living under the poverty line, and this number has been increasing, Fischer said.

The Haredi community contains an enormous cache of human resources. If put to work, this could serve as an additional economic growth engine while decreasing poverty rates, Fischer said.

Interior Minister Eli Yishai (Shas) took exception at Fischer's speech, however.

Yishai told conference participants that Haredi poverty is the central bank governor's doing.

Haredim are poor because they have large families and child stipends have been cut, and because the bureaucracy refuses to accept Haredis to work at government offices, he said. Nevertheless, the Finance Ministry's attitude toward the Haredi community has dramatically improved in recent years, he said.

Addressing the state of the economy, the central bank governor said there have been signs of growth in recent months - exports rose in May and June, and imports increased in the latter. The Bank of Israel's composite index has risen for the first time in 11 months, he reported.

In addition, larger companies have stepped up their purchasing and consumer confidence is growing, Fischer said.

Fischer called on participants to be optimistic, emphasizing Israel's strong economy, despite rising unemployment and inflation.

We still don't know when economic growth will resume; the situation is complicated, but it's good to see signs of growth, he said.

Nevertheless, Fischer said, there is some concern over growing unemployment.

Referring to the global economic situation, the central bank governor said the first signs of economic growth are apparent, particularly in the Far East, India, Indonesia and Singapore. There are also initial signs of growth in the U.S. and Europe. For the first time in the past two years, the International Monetary Fund has forecasted increasing economic growth, starting in 2010.