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ACTIVITY DATA SHEET PROGRAM: Israel TITLE AND NUMBER: Support Policy Reform for Financial Stability and Structural Adjustments Needed for Rapid Sustainable Growth, 271-001 (271-K640) STATUS: New PLANNED FY 2001 OBLIGATION AND FUNDING SOURCE: $840,000,000 PROPOSED FY 2002 OBLIGATION AND FUNDING SOURCE: $720,000,000 INITIAL OBLIGATION: FY 2002    ESTIMATED COMPLETION DATE: FY 2002 Summary: The purpose of the Israel Cash Transfer is to support policy reform for structural adjustments in Israel to achieve economic and political stability in Israel and the Middle East region. The FY 2001 Cash Transfer Program is aimed at strengthening Israel's civilian economy to enable the Government of Israel (GOI) to more easily balance requirements to pay foreign debts while financing other annual government expenditures. Through this process, the economic pressures on the GOI will be eased. Economic and political stability in Israel is essential to the achievement of U.S. foreign policy goals in the region. The U.S. Government's (USG) economic and other programs in Israel are aimed at enhancing the GOI's ability to take the steps necessary to reach agreements with its neighbors on a host of peace related issues. Key Results: The U.S. does not condition the cash transfer to Israel on economic policy reform. However, the U.S. does seek certain results. The Joint Economic Development Group, chaired by the U.S. Department of State, encourages Israeli efforts to: 1) reduce government spending and deficits; 2) reduce the balance of payments deficit; 3) improve tax and public wage structures; 4) increase privatization; 5) reform labor markets; 6) continue liberalization of the trade regime; 7) expand business investment and governmental infrastructure investment; and 8) sustain export growth. Since 1993, export competitiveness has improved, and inflation has been reduced. Performance and Prospects: FY 2002 funds will be provided as a cash transfer and will be used by Israel primarily for repayment of debt to the United States, including foreign military sales debt, and purchases of goods and services from the United States. The U.S. Department of State will continue to encourage Israeli reforms to reduce government spending and deficits, to improve tax and public wage structures, to increase privatization, to reform labor markets and to continue to liberalize its trade regime. Possible Adjustments to Plans: None. Other Donor Programs: The United States is the largest bilateral donor to Israel. Principal Contractors, Grantees, or Agencies: The transfer is accomplished by a direct grant to the Government of Israel. Selected Performance Measures: The program encourages more investment and economic activity, thereby resulting in increased foreign exchange earnings. Increased domestic and regional stability is anticipated through improved economic performance in Israel. U.S. Financing (In thousands of dollars)   Obligations   Expenditures   Unliquidated   Through September 30, 1999    0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 2,280,000 ESF 2,280,000 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA   0 CSD 0 CSD 949,056 ESF 949,056 ESF 0 SEED 0 SEED 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 3,229,056 ESF 3,229,056 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 0 DA   0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA   0 CSD 840,000 ESF 0 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA   0 CSD 840,000 ESF 0 SEED 0 FSA 0 DFA       Future Obligations   Est. Total Cost   Proposed Fiscal Year 2002 NOA 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 720,000 ESF 0 ESF 4,789,056 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA

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