Israel eyes former Soviet market

ISRAEL'S bid to boost its economic ties with the republics of the former Soviet Union is being met with mixed results.

The state-owned Israeli telephone company, Bezeq, has signed a 10-year deal with the Azerbaijan government to set up a jointly owned subsidiary that will run the Central Asian republic's international communications. Under a separate agreement, Bezeq and International Business Machine Corp. (IBM) are planning to computerize Azerbaijan's public telephone exchanges.

Israeli companies have been busy in Central Asia over the past three years, exporting about $100 million worth of goods to the region and setting up turnkey projects - mostly in agriculture - worth 10 times that amount.

Exports to Russia have boomed as well, reaching $188 million last year. But Israeli Chamber of Commerce officials warn of a somber future in the wake of new Russian customs procedures. Last month Russia doubled customs duties on goods from countries that have not signed a trade agreement with Moscow. Israel has not yet reached such a deal, and until it does, the Russian market for its goods will be a difficult one.