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WASHINGTON - "Israel is not immune to the effects of the global economy. We feel the consequences of the global recession," Finance Minister Silvan Shalom said yesterday at the International Monetary Fund conference here. But he hastened to add that the country's "basic economic indicators are positive" and that the long-term outlook is good.

Israel took a leading role in the advancement of the technology sector and now is impacted by the market, he told representatives of the 184 countries in attendance at the conference. "In addition, we have had to deal with the economic burden of a war on terror, a war fought daily by every Israeli. In this battle fought by the entire world, we are determined to win," Shalom asserted.

"Israel recently implemented an economic reform plan slated to preserve macro-economic stability and accelerate the return of growth. The policy emphasizes employment and streamlining in both the private and public sectors and provides a response to current economic challenges and long-term growth."

In order to avoid detailing Israel's current economic situation, Shalom moved quickly into the long-term picture. "Israel's long-term projections are good. The stability and strength that led in the past to foreign investment and rapid growth will move the economy forward in the future. Basic economic indicators are positive. They reveal only part of the Israeli economy's strength, but there are other components such as Israeli companies that have reached important status in global technology, particularly in development and innovation.

"Israel has the highest per capita scientist population in the world. Moreover we have developed capability in the biotechnology, medical equipment and defense sectors. These factors add to Israel's economic strength and growth potential."

Shalom further maintained that "while closely regulating monetary management, fiscal discipline and structural reforms, we are also vigorously encouraging investment in human capital with uncompromising devotion to innovation and initiative."