Establishment of Fund to Invest in Businesses in the Arab Sector
(Communicated by the Prime Minister's Media Adviser)

Prime Minister's Office (PMO) Director-General Ra'anan Dinur today
(Tuesday), 5.12.06, announced that the PMO had decided to advance the
establishment of a private equity fund, in cooperation with the private
sector and under its management, that would invest an overall sum of NIS 160
over seven-to-ten years in industrial enterprises, companies and other
businesses in the minorities sector. At a Jewish-Arab Center for Economic
Development conference in Herzliya today, Dinur said that he intended to act
towards, "one economy in one country," in order to, "realize the great
economic and human potential that exists in the Arab sector but which has
yet to be utilized."

PMO Dir.-Gen. Dinur said that the problem of self-capitalization necessary
for investment was one of the main obstacles to the growth of private
businesses in the Arab sector; therefore, it had been decided to assist in
this endeavor. He said that, "In our view, the establishment of the fund is
not only a financing mechanism but also a way of encouraging funds to invest
in businesses in the Arab sector in order to upgrade them in terms of
marketing, management, etc."

The private body that will operate the fund, following a tender, will be
asked to commit to raising an additional sum of at least NIS 80 million from
private investors. A source of investment financing worth approximately NIS
160 million will thus be at the disposal of the Arab sector. Any factory,
company or business will be able to apply for NIS 2-4 million in financing
thus enabling 40-80 companies to receive financing assistance in exchange
for stock.

PMO Dir.-Gen. Dinur said: "We want to prevent a situation in which Israel
has two separate economies - with different patterns of participation in the
workforce, different levels of participation and unequal opportunities.
Government policy must provide the tools to ensure the sector's ability to
integrate into the Israeli economy."

PMO Dir.-Gen. Dinur discussed the PMO's intention to establish a "Minorities
Sector Economic Development Authority" to utilize and advance the Arab
sector's latent economic potential and the integration of sector businesses
in wider economic activity, to encourage productive economic activity and to
create the tools to increase the businesses' sources of income. The
Authority will also act to raise the issue of the Arab sector on the
Government's agenda.

PMO Dir.-Gen. Dinur said that, "Children in the Arab sector will have no
future if we are unable to provide them with an economy that will advance
their integration and the utilization of their economic potential. Past
checks have shown me that the Arab sector's use of the tools provided by the
Government is very low. Therefore, we must - inter alia - deal with the
accessibility of these tools to the Arab business community."