Afternoon Tea in Jerusalem Blog

In addition to my work as a business coach, one of my interests is blogging about life in Israel. This is a country full of contrasts – over eight million citizens living in an area the size of Wales. You can see snow and the lowest place on the globe in the same day. Although surrounded by geopolitical extremes, Israel has achieved a decade of high economic growth. My work brings me in contact with an array of new companies, exciting technologies and dynamic characters. Sitting back with a relaxing cup of strong tea (with milk), you realise just how much there is to appreciate in the Holyland. Large or small operations, private sector or non profit, my clients provide experiences from which others can learn and benefit.

I have commented that the Israeli economy ended 2009 in a solid position; absolutely and compared to competitors. So what’s in store for 2010?

I am not a great fan of predictions. But, whether you are an analyst or investor, there are several positive commercial tends to watch out for.

No, I will not concentrate on the stock market or specific companies, here I will look at sectors. Let’s start with tourism. The responsible government ministry bypasses most budgetary cutbacks. It has its own new investment centre. Last week, it launched a plan for 15 new golf courses. And the ministry is seeking to boost hotel space by 5% very rapidly. Ambitious but relalistic.

Jerusalem, through the efforts of its ambitious mayor, Nir Barkat, intends to be part of that pull of inward tourism. And outside this field, Barkat is looking to expand Jerusalem’s commercial base. He has scrapped a plan to tax high tech profits.

Cleantech will continue to flourish in Israel. Next month sees the 3rd International Renewable Energy Conference at Eilat.This remote city drew hundreds of participants last year, and this year is set to be even better. The event is a symbol of the advances that Israeli industry has made in exploiting solar and wind energy, as well as other new technologies.

Diplomatic considerations are never far from the mouths of most Israelis. What is generally accepted as one leading reason for Israel’s innovative strength is the number of high tech graduates, who had previously work on military projects. In 2010, the IDF has no intention of letting its competitive advantage slip, a good sign for the long term future of the country in general and for the economy specifically.

Finally, I do not want to ignore the retail sector. Quietly in the past decade, Israeli chains have been moving towards overseas markets. Ahava, a manufacturer of Dead Sea cosmetics, has a flag-ship store in London. Castro, adult clothes, has shops in Europe and in the Far East. I am starting to cooperate with a successful franchise line, looking to tackle Europe and America.

Quite a lot for a country of 7.5 million people.

Mention the words “Israel & refugees” in the same sentence, and most people tend to think about the Palestinian issue.

Well here’s a little known fact about Israel. In the past decade, the country has absorbed 17,500 refugees from Sudan, Darfur and Eritrea. According to UN stats and quoted in the hebrew newspaper “Yediot”:-

  • 1,500 are minors
  • 7,500 are from Eritrea and 6,500 from Sudan
  • Around 16,000 are Muslims

Many quite simply walked to Egypt, entered Sinai, and then reached Israel across the porous desert border with Egypt. And the numbers continue to grow every month.

The article in the newspaper highlights that the communities are plagued by problems associated with poor immigrant communities; alcoholism, violence, drugs, etc. The crime figures do not make for pleasant reading.

So, on the one hand, these people arrive in Israel due to the awful conditions from they have come. And with no small irony, they deliberately seek out the Jewish state, despite the devout hostility of their own governments towards Israel.

In contrast, Israel finds itself with a moral duty to look after people, who have no where else to go. As just one example, the Tel Aviv municipality has set up special welfare departments to cope with the growing crisis.

And here’s the second irony. Repatriation is not an option. I guess that one reason is that Israel’s Ministry of Foreign Affairs could be worried that such an act would be considered racist and result in a motion of condemnation at the UN. I also assume that the vote would have the support of Eritrea and Sudan. (sic!)

Just as airports were beginning to relax security measures, the Christmas period brought a nasty shock to the Western world. The Nigerian affair has sent the USA, UK, Dutch and many other authorities rushing to tighten procedures.

Not pleasant. The traveler is delayed. The security checks are often unfriendly, if not costly. Much of the initial individual profiling is necessarily prejudiced and unfair. How does a society cope – maintaining its values, while protecting its freedoms?

On the one hand, technology is improving all the time. I am currently working with an Israeli company that is able to detect malicious intent. By using a combination of sciences – software, hardware and behavioural techniques – the firm has perfected the capability to pick out potentially dangerous people in real time; all this, without talking or touching the target. 

In fact, Israel offers an interesting model to see how democratic countries cope with terror, while preserving democratic and pluralistic standards.

True, the days of suicide bombers have passed (for the moment, at least). Yet, consider the stats for 2009.

  • 15 people were killed in terror incidents in Israel (36 in 2008)
  • 567 rockets / missiles were fired from Gaza (primarily) and elsewhere into Israel (2,046).
  • In the West Bank alone, there were 636 acts of violence (893).

Last night, hours to go before the onset of the new year, a grad missile landed in the quiet dormitory town of Netivot. There is no other country that suffers from such intolerable and inhuman premedidated violence.

And yet, in 2009, Israel conducted a general election, where the vote was open to all citizens. Its entry in the Eurovision Song Contest was led by 2 female singers of different religions. The country has continued to send hundreds of tons of provisions to Gaza almost daily. 

Free press; improved maternity leave for all; sporting successes achieved with players of different backgrounds; all these have been features of 2009 in Israel, and past years.

As Obama, Brown et al seek to clamp down on security lapses (and thus impose restrictions on citizens), it is to Israel that they should turn when wanting to learn how to proceed. 

Wishing all my readers a safe and free 2010.

Israel’s economy has come through 2009 very well – beyond expectations. It is time to say congrats to politicians, to senior bankers and to civil servants.

The IMF, finance houses, local analysts – they have all been repeating the same message for months now. Both in relation to other countries and to where it could have been, the Israeli economy is set to record healthy growth levels in 2010.

Some of the more recent stats continue to be encouraging. Unemployment has dropped to 7.7% and the pattern remains downwards. Inflation is showing signs of steadying, especially as the Bank of Israel looks set to keep raising interest rates in 2010.

No – not everything is rosy. Almost at the last moment, the Treasury has announced a 0.5% reduction in the rate of VAT, throwing businesses into confusion. Public transport will cost more from 1.1.2010. Local taxes are set to increase. And water rates will shoot up by 25% – if only they would guarantee that the extra income would improve the infrastructure!

The Middle East is notoriously unstable. Who knows if the new year will see Israel entangled in another military engagement? And yet, whether it be activities in Lebanon or in Gaza, that did not stop the local economy in the past decade.

In 2010, Israel’s stock market is set to join the Financial Times list of developed countries. The OECD is expected to accept Israel as a full member. There is a mood of quiet confidence in the financial community, and deservedly so.

It can be dreadfully boring to quote stats. Of Israel’s 7.5million people, around 11% live in Jerusalem. And of that number, around a third are Arabs.

Now let me tell you some really wow things about the cityJerusalem, a city which I love and am proud to be associated with. And to help me, I will quote from a lecture given by Mr Gideon Ben-Zvi, which I heard this evening.

Now when it comes to Jerusalem, Gideon knows what he’s talking about. He was born and educated in the Holy City. He has set up at least 5 high tech firms in Jerusalem. He is a friend of the current mayor, Nir Barkat.

Gideon observed that many local entrepreneurs have started out with an idea, originating from the heart of the Hebrew University in Jerusalem. Surprise? Well this educational establishment has possibly the highest number of patents in the world for a university – around 70% are in the life sciences.

And Gideon mentioned that teams from Hitachi, Siemens and other multinationals are regularly vetting the books of Yissum, the university’s biz dev commercial arm.

Now consider that Jerusalem hosts around 22% of the high tech companies in the country. This includes about a third of the biotech firms. And of the 760,000 Jerusalemites, large sections belong to the growing ultra orthodox Jewish communities and the Arab sector, many of whom exist outside the main workforce.

Jerusalem’s immediate commercial future looks bright, as the mayor looks set to continue with his plans. Jerusalem, at the turn of the decade, has a hopeful future to consider.

Intel has been operating in Israel since 1974.

Located on 4 sites. Over 6,500 workers. Export sales are expected to top US$3 billion in 2009. A successful r&d team, backed by Intel’s first production line outside the States. All-in-all, a very hefty operation for the multinational.

For example, the team in Haifa had a leading role in Centrino, found in many laptops around the globe.

The same set up has developed Sandy Bridge, a leading edge microprocessor. It will be larger and more energy-efficient than its competitors. And it should be on sale in early 2011.

Intel laid the path for many other conglomerates. Today, Siemens, Microsoft, Motorola, HP are just some of the many international conglomerates with larger facilities in Israel. Whether it be in the fields of medical devices, computer services, communications or otherwise, these companies provide a benefit to people around the world.

And here’s the catch, if not the hypocrisy. In Europe, and especially in the UK, there exist pressure groups, which seek to convince people not to buy Israeli products. These same people disseminate their information via their computers and their mobile phones……..which function with loads of tech from the Holy Land.

To quote my young teenager son: “Duh!”

It is a year since Israel invaded Gaza. Many NGOs report that the local Palestinian economy has been devasted. A closer inspection reveals a more complciated picture.

 Israel’s action was a response to the thousands of rockets that had been fired at southern towns since the withdrawl from Gaza in 2005. On the anniversary of the start of hostilities this week, Hamas organised a  “mass” demonstration of support. Estimates of the turnout vary, but as the Assocated Press commented:

…the Hamas call to rally was met with indifference. Ignoring a siren meant to call for a minute’s silence, cars whizzed by and pedestrians kept walking……”I wish they had commemorated the war by opening a factory. That would have been better than this,” said Gaza resident Rami Mohammed, 30.

And that is the problem for the Hamas leadership. Not all the people are stupid all the time. They will not continuously accept that Israel is to blame for their economic problems.

Take a look at the “tunnel economy”. First, it has created a new elite, where many of the members are linked to the Hamas leadership. And in true Orwellian irony, Hamas had ousted the previous Fatah leadership, which was seen as ridden with corruption.

Second, the underground economy has become an employer of child labour, a total contradiction of humanitarian ground rules, and thus a cause for more discontent.

There is another secret side to the economy. On the one hand, Hamas cries “poverty” to whoever will listen. And yet, when the time comes, it showers money on to the streets. Pictures from the Eid religious festival revealed shops full of produce.

Similarly, Hamas is thought to have invested around US$2 m in celebrating its battles against the Israeli army. But also this week,

…… sources in Gaza have reported of a new corruption affair in Hamas’ transportation ministry. According to one testimony, a senior ministry official named Ziad Harara took tens of thousands of dollars and disappeared……

This affair is related to the driving studies industry in the Strip. According to reports, senior transportation ministry officials take about $658-790 for issuing a driving license, even for people who do fail to meet the driving test’s demands. Hamas government workers receive a $100 bribe for letting people pass a theory driving test without taking it.

Motivating your worker: With all that cheer in the air, surely nothing could be easier at this time of year.

And yet so many of us just simply miss the boat.

I recently wrote about how inspiring bosses are those who find a way to become a friend with their colleagues. Call it “micro social networking” if you will.

An article in Harvard Business Review labels this as “progress”.

On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak. On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest.

Note how this is all based around “a feel good” factor. People want to put in more effort when they believe that are achieving something.

Interestingly, even when tasks are outsourced, the external team needs to be encouraged in similar ways.  In an executive brief, which I was recently handed, it was explained that:

The quality of an outsource team’s output is directly proportional to the satisfaction they have in fulfilling the demands of your business. And much of this hinges on how well you value them as workers and their work. How do you make them feel that they are an integral part of your success? How do you make them feel as if they were your employees instead of outsourced consultants and workers?

Yet again, it’s all about making the person – employee or supplier – feel much better about themselves.

An extension of this approach is getting teams to be creative, seeing beyond their comfort zone. A fascinating article by Sue Arnold in the December 2009 issue of “Ruminations” illustrates this point. She concludes by observing that “creativity is essential  for any business to survive and thrive. Everyone has latent creative talent within them, but this often remains an untilised resource”.

And we all know that we are at our most creative when we are feeling motivated.

Now there’s a message for all managers wishing to start off the new year on a dynamic note.

An announcement from the Israeli army caught my eye.

The Coordinator for Government Activities in the Territories, Maj. Gen. Eitan Dangot, and the Head of the Civil Administration in Judea, Brig. Gen. Yoav (Poly) Mordechai, met today (22.12.09) with Christian leaders, including ……the head of the Franciscan monastery, the Custodian of the Holy Lands, the Ambassador of the Vatican, the Greek Orthodox Patriarch, the Armenian Patriarch, and the Latin Patriarch to ……….

And that does include Prostestants and others. Can you imagine the logistical and security nightmare, ensuring that every group gets to its fair share of the Church of Nativity in Bethlehem? And all in 12 days.

Israel is considered the one country in the Middle East, where the numbers of Christians is rising. About 5% of the total population, the largest single group belongs to the Eastern Orthodox churches. But not all have had an easy year.

Start with those Protestants who live in the southern Negev desert. The largest group are the Black Hebrews, originating from America. Over the past few years, they have endured thousands of rocket bombings from Hamas. “Only” 200 were launched in 2009, a decrease of over 90%. My teenage son was talking to the community last week, and they felt that things were returning to normal.

Life in Gaza for the 3,000 Christians has rarely been easy since Israel departed 4 years ago, and especially more so with the onset of Hamas rule. As opposed to the past, it is hoped that this year, over 300 pilgrims will be permitted by the Islamic authorities to journey to Bethlehem.

In the West Bank, the Palestinian Authority has been more accommodating, although life is not without periods of harassment.

In an effort to promote further harmony, President Peres has sent a message to Christian communities throughout the area. It is now 25 years, when Peres became the first acting Prime Minister to take part in the ceremonies in Bethlehem.

Next year? Who knows. But Israel must be doing something right if Christians find security there coupled with the basic freedom of worship. Here is a seasonal message for others in the Middle East to read and learn from.

Earlier this year, I wrote about Emblaze, a typically successful Israeli hightech company, but which had found itself plunging towards disaster. I cited the reasons of poor management and hinted at an arrogant corporate culture.

Many have argued that similar approaches were prevalent amongst corporate and mortgage bankers in America. And in Britain, the government has been found wanting, trying to buy its way to growth while revenue was drying up. In all these sitations, sooner or later, somebody realises that “the king is naked”, and thus begins a very painfull fall out.

Correspondence with a gentleman, named Colin, has brought to my attention that Emblaze has turned itself around. He claims that much has to do with the role of Guy Bernstein, the CEO, establishing new commercial relationships.

As I wrote to Colin yesterday, it is always interesting to see how companies overcome the seemingly insurmountable. Lo and behold, in today’s Hebrew newspaper, Yediot, there is a listing of several Israeli companies, who have pulled themselves away from bankruptcy.

The companies are located in the clothing, food and retail sectors. And for all the unique stories and internal processes, they have common themes.

  • Most were bought out, but the basic concepts have been retained
  • Most have benefitted from a merging with other logistical systems, resulting in significant efficiencies.
  • Most have benefited from a small injection of money.
  • They all reaped the benefits of a strategic management team.

Bottom line: In a year of economic recession, they have survived, expanded, taken on new staff. It’s smiling time again.

And the lesson for senior management? The phrases of arrogance, resting on your laurels, complacency come searing to the surface.

The recovery programmes implemented were clearly not that difficult nor complex (although probably painful). Generally, the previous set of owners had misread the dynamics. It would appear that for a business to maintain its success especially in a downturn, it needs to have in place a mechanism to further management creativity and innovation.

This coming week, the Jerusalem Municipality will distribute free Christmas trees to the Christian residents of Jerusalem. A lovely gesture and not a solitary one from Israeli officialdom.

Yesterday, the Tourism Minister, Stas Misezhnikov hosted a special reception for Christian leaders of several denominations. This came two days after the Hebrew University in Jerusalem announced that its team had analysed the DNA of a man from the time of Jesus. The skelton was found in a tomb near Jerusalem’s Old City and presented clear evidence that leprosy existed at that period.

As Christmas approaches, the international media almost inevitably sends teams to the Holy Land. They usually ignore such stories. They will bypass the continuing harassment of Christians in the West Bank and in Gaza

Instead, Christmas is exploited as a further opportunity to demonize Israel. It is sad and ironic. Israel, the one democracy in the Middle East and the one country in the region where the Christian community is actually growing, suffers from this distortion of truth, and at such a spiritual moment in the calendar.

Most people have a marketing guru. Many of us have a favourite commentator on management or business studies.

And what I often find is that if you talk to people after they have finished reading a new item by their hero, they will say something like: “Brilliant, but…..” and then sigh. Why the disappointment? Why the annoyance?

Here’s what I mean. One of the most popular people around today is Keith Ferrazzi, and deservedly so. His latest 2 minute presentation showed people how not to be a “twitter idiot”. 5 innocuous tips.

And that’s the point. They are very simple and obvious. In a nutshell, he calls on people to provide generous help, but not to lecture. Rule numero uno of networking. Surely, we all know that and do that. But, Keith is correct. We forget and we do not. Cringe time!

Canadian Karl Bryan is in a similar field. In a recent post, he observed how all of us occasionally have to write copy to promote a project, but often we come unstuck just on the structure of the text. His five stages of approach to such an assignment are:

  • Command Attention
  • Showcase Benefits of Products/Services
  • Prove the Benefits
  • Persuade People to Embrace the Benefits
  • Call to Action

So why does the word “obvious” leap back in my head? Why don’t I (we) follow these basic procedures all the time? Ouch, how these people annoy me.

So, like it or not, we seek these gurus and their frustratingly simple mailings. And who needs them? All of us, whether you are a start up who requires guidance or a multinational with vast internal resources. We all forget the obvious, but should realise it takes an outsider to drag us back into line.

Let me close with two brief anecdotes to illustrate the point. Last week, I took my family cross country jeep riding. Unfortunately, there was a mistake with the booking and my wife was upset. The matter was sorted out and we had a good time.

Still, no compensation was suggested. Further, we later found out that there were also family discounts, which were never offered. So, we paid full price for a nice day, having been offended. Guess who will not back be going back there? And guess which salesperson has not realised the mistake in the big picture? Sad.

 A musician, Dave Carroll, had difficulty with United Airlines.  United apparently damaged his treasured Taylor guitar ($3500) during a flight.  Dave spent over 9 months trying to get United to pay for damages.  During his final exchange with the United Customer Relations Manager, he stated that he was left with no choice other than to create a music video for youtube exposing their lack of cooperation.  The Manager responded : “Good luck with that one, pal”.

The video has since received over 5.5 million hits.  United Airlines contacted the musician and attempted settlement in exchange for pulling the video. Naturally his response was: “Good luck with that one, pal”.

Taylor Guitars sent the musician 2 new custom guitars in appreciation for the product recognition from the video that has lead to a sharp increase in orders. https://www.youtube.com/watch?v=5YGc4zOqozo&NR=1

It’s been a bumper week for foreign direct investment in Israel. American pharma multinational, Abbott Laboratories, paid US$123m for control of Starlims, an Israeli data management software enterprise.

That news was preceded 24 hours earlier by the purchase of Optonol, a small company just outside Jerusalem, which has developed  a brilliant application to treat glaucoma. Medical device giant, Alcon, has offered a deal potentially valued at hundreds of millions of dollars.

This is all part of a growing trend. A UK based investor report noted that for the period August – October 2009, foreign direct investment in to Israel, hit over US$250 million every month.

Significantly, not all of this financial flow is directed at high tech. For example, in a statement released by the Israeli Tourism Ministry, there has been an “unprecedented demand from entrepreneurs to invest in hotels.”

37 entrepreneurs recently replied to the Tourism Ministry’s invitation for grant allocations to establish new hotels and to return buildings once used as hotels to their former use. The Tourism Ministry allocated 300 million NIS to providing grants for entrepreneurs within the framework of the 2009-2010 work plan for this dual purpose. An extra 100 million NIS will be allocated to this program next year in line with demand.

In accordance with the Law for the Encouragement of Capital Investment in Israel, the Tourism Ministry offers a higher level of participation: 20% of the total investment excluding land costs.

It has already been announced that the Ritz Carlton chain intends to open its first hotel in Israel in 2012.

Yuval Steinitz, Israel’s finance minister, issued a warning at the end of last week. Despite the growth foreseen in 2010, the year will still bring along some unexpected aftershocks from the credit crunch.

Possibly. It is certainly true that few expect the strong gains of the stock market to continue. Even the most conservative of unit trusts have gained 20% since the mid-summer.

With that noted, this week has again seen a string of good news.

An IMF team is currently in Israel. Despite reservations over the country’s tax reforms, planned for January 2010, the draft report states that:

 Since the beginning of 2008 it appears that Israel has been acquiring safe haven status.

Encouraging. So is the report that for the first time since the onset of the downturn, the current quarter will see more people hired than fired. This optimism is clearly reflected in the hightech sector, which has been of key importance in Israel’s continuous growth.

On a different front, 2 independent agencies have ranked Israel as top of their international list of growing real estate markets. This is significant because the building industry feeds into many other parts of the economy, and thus provides an all-round economic stimulus.

Mount Scopus, which sits on the rim of Northern Jerusalem, is about 850m above sea level. It hosts one of the world’s leading universities for r&d, two hospitals – one of which is run by Lutherans – and a British military cemetary.

At the back of the summit are the beginnings of the Judean desert. Travel 30km south east through the desert and you have dropped over 1,200 meters to the Dead Sea, the lowest point in the world. Between these two extremes, I took a cross terrain jeep ride yesterday.

What a fantastic adventure! Desert it is, dunes rising and falling, extending roughly from Jericho to Arad. And yet, because it is surrounded by hills on either side, unlike most arid regions, the Judean desert receives rain in the winter.

The journey took us to several vantage points. We saw a sheer drop, which looked like a snappling trail. In fact, next week, when the rains are due, it will turn into a gushing waterfall. We drove along some Bedouin encampments, waving to each other as we went by. We investigated a cave with inscriptions, and you realised that the place was used to collect water thousands of years back.

The most spectacular view was a peak approx 125m above sea level. Directly ahead we looked into Jordan, with the Dead Sea and the Jordan river separating the two countries. Immediately below was Nebi Mussa were Muslims believe Moses is buried and they come to worship annually. To the right in the distance we saw Herodian, a Roman palace curved out from inside a hilltop 2,000 years ago.

Continuing the panorama, but nearer to the Dead Sea, was the peak where the High Priest would make sacrifices every Day of Atonement. He would walk from the Temple to make this important journey. And if we looked up, we could see the outskirts of the Old City of the Jerusalem and trace the steps the old man would have made.

What was the contrast? It was not the many towns we saw going north, Jewish or Arab. Right next to us was a large crater. This was where the American and Israeli military had placed a patriot missile system in 1991 during the first Gulf War. My son also found some old shell casings, possibly even belonging to the Jordanians, when they had used the region for anti-aircraft training decades back.

It was a great day all round. It is clear how everybody is free to roam there today. It was also a reminder that the desert belongs to all. A future peace treaty, which ignores this fact, will not be worth the paper it is printed on.

“How is it possible that non-religious Israelis, often associated with those who want to talk directly and immediately with the Palestinians, are not prepared to consider similar discussions with their religious counterparts?

And how is it possible that religious, who constantly talk about the unity of the land of Israel, are prepared to dismiss so readily the views of their non-religious counterparts?” 

Thus wrote Yair Lapid in this Friday’s Hebrew edition of the Yediot newspaper. Lapid is the son of a Holocaust survivor, Tommy Lapid.

Tommy was a leading journalist turned politician, who made a name by lashing out at the power of religious institutions. His son has made no secret of trying to find a way back to religion, but outside the convenient definitions that societies hand us.

OK, Lapid junior’s questions are challenging, but so what? Dip into Jewish history. There have been two Temples. One was destroyed because of false religious practices. The other because of the horrendous way Jews treated each other, despite many being openly religious.

Skip to my experiences in recent years. How often do I get surprised looks when I talk to my non religious friends about contemporary music or tell them how my daughter mixes with young men of her age? In parallel, just as frequently, I am offended by religious people who say “those leftists don’t know what damage they are causing to the country”.

Both extremes are an anathema to me. I just wish that I had more courage to challenge directly those who make such statements.

Last week, I met somebody, who by dress and appearance could be taken for a typical non-believing person. After our discussion, he was due to go to his weekly study session in Torah texts. We stereotype to an extent that is a danger to society’s future.

Yair Lapid’s comments should be hung over the entrance of every school in country, unless we wish that differences of opinions also means different societies…….and the Jews of the Temple period saw what that can lead to.

Until 5th June 1967, East Jerusalem and the West Bank were part of the Hashemite Kingdom, a fact recognised only by Pakistan and by Britain. Gaza was governed by Egypt.

If you look at reports from the World Bank or various UN agencies for the period, these Palestinian territories were amongst the poorest in the world.

“The Israel Test”, a new book by George Gilder, throws some interesting light on what happened to the standard of living after Israel took control. Citing a string of UN reports, Gilder notes that the Palestinian economy took off. In an interview this week, he observed:

When Israel inherited the territories in 1967, it administered them, but much more loosely than it administered it own economy. And so the territories became the fastest growing economy on the face of the earth. Some 250,000 Israeli settlers moved to these previously Judenrein areas, and they attracted some two million Arab settlers. Eight Arabs moved in for every Jew.

This was a golden age for Arab Palestinians. Their numbers tripled, their per capita incomes also tripled, their educational levels soared, and their life expectancy rose from 42 to some 70 years.

……..the delivery by the international community of the territories to the PLO (in 1993), who then brought to a screeching halt all the economic development. The PLO caused a 40 percent drop in GDP per capita incomes, and just generally reversed the huge achievements of the previous 20 years.

The moment Chairman Arafat launched the Intifada in September 2000, the Palestinian economy was bound to go into free fall. Labourers were not allowed into Israel. The industrial area at the Erez checkpoint was decimated. Even money given to the Palestinians to rebuild Gaza after Israeli withdrawal – such as for the greenhouses project – seemed to vanish.

Today, there seems to be 2 Palestinian economies. Clearly, there are parts of the West Bank, which are doing well under the tutelage of President Abu Mazen.  For example, the Ramallah stock exchange is on a high.

Yet down in Gaza, after 2 years of Hamas rule, there appears to be little economic progress. Associated Press reports that the situation is so bad that people are buying fake cancer prognoses in order to leave.

Two actual work situations:

A) Companies are beginning to see the end of the recession. Many have survived after dismissing workers and / or cutting back on benefits. Not pleasant for those being squeezed, but understandable. And yet, now that there good times are on the horizon, we all know of senior management that do not return the favour in a tangible manner.

B) My friend returned home recently very upset. She was entering the final phase of a project for the parent company and a bug was found in one of her initial tasks. For all her significant efforts, she felt picked on.

Although I have condensed complex issues in to a few lines, they have a common theme. In the first situation, employees know that they have no reason to work hard, because they will never be appreciated. Similarly, my friend’s counterparts abroad will found it difficult to extract that extra mile out of her, as they could only comment on faults.

Bottom line: Nobody can manage to say thanks. Productivity, and thus revenue, and thus profits, suffers.

Simple, ain’t it. You don’t need an MBA to get it , and yet most mangers just cannot understand.

A few weeks ago, I attended a Dale Carnegie training course on this subject. The course is run all over the world, which shows the need and demand. Stats were quoted all over the place to prove the basic point. 

Research from Mercer Delta shows that engaged employees deliver 4 times more value to the organisation than non-engaged employees.

Dr Robert Brooks has written extensively on this theme.

If there’s one thing the winners of the Globe 100’s Top Places to Work have in common, it’s this: They all believe it’s good business to keep employees satisfied, motivated, and working hard. Show them respect. But in today’s economy, when layoffs are more common than bonuses and perks, how do you do that?…… In my consultations I have found that employees will be motivated to perform with quality and energy in those environments in which they feel appreciated, they feel their voice and opinion is heard and respected, they know that they can advance as their skills are honed, and they know that their bosses are accessible and supportive.

Brooks and the Carnegie lecture have two factors in common. First, they recognise that managers are often hired because of academic qualifications or experience, but little emphasis is focused on their ability to inspire.

Second, the key to inspiring is learning how to become a friend with your colleagues. In return, the advice offered and the requests inparted by “friends” are listened to and acted upon. In modern parlance, managers need to learn to network.

Find a way to show workers sincere appreciation and they will perform. It’s usually cheaper than a pay rise. No technology is required.

Ever wondered why so many people in positions of responsibility fail at this task?

European politicians have spent the past month arguing that Israel does not do enough for peace.

I have maintained that if you look at efforts on the ground, the above hypothesis remains simply that, a theory; the efforts of real life are very different and truly encouraging.

So here is an example of what I mean. What follows is a statement released today from Israel’s Ministryof Defense.  

Press Release:  Outbreak of Swine Flu in the Gaza Strip

 Israel has already transferred 10,000 doses of vaccine and continues to monitor the situation

 In light of recent cases of swine flu in the Gaza Strip, the Coordinator for Government Activities in the Territories (COGAT) and the Gaza District Coordination and Liaison Office (DCL) are working with the Palestinian Civil Committee in Gaza (associated with the Ramallah-based Palestinian Authority) to prevent further cases.

During the course of day, the passage of a sick person was facilitated and, upon examination, the individual’s illness was found to be swine flu.  Similarly, four other ill persons who also showed signs of swine flu also crossed.

The Gaza DCL is in continuous contact with health officials from the Palestinian Civil Committee in Gaza and as such is able to create up-to-date situation assessments regarding swine flu.  Meetings are held with high frequency and in accordance with reports from Gaza.

 As of now, approximately 10,000 doses of vaccine against swine flu have been transferred to the Gaza Strip via Israel, which remains ready to receive further requests.

 Since the beginning of 2009, approximately 8,000 Gazan patients and their loved ones have entered Israel for medical reasons.

Gaza DCL Commander Col. Moshe Levi said: “The Gaza DCL is making great efforts on all levels and through all channels to assist the non-combatant Palestinian population from the Gaza Strip, with an emphasis on the field of health.  This is part of our overall humanitarian effort vis-à-vis the Gaza Strip.”

Networking is one of those key buzz words, which is turned out ad nauseam by marketing gurus. However, a recent experience in Jerusalem focused the importance of the concept and why we cannot run away from it.

Let’s quickly examine how networking fits into our lives. Keith Ferrazzi summed it nicely. By liaising and mixing with people, we succeed. Therefore, we have to get up from our comfort zones and find out who can help us.

Simple no? Well, not if you are shy, physically restricted, uncertain, or whatever. In other words, the vast majority of us seemingly have no idea how to go about networking.

Enter Ezra Butler. I was the moderator at the latest meeting of the Jerusalem Business Networking Forum, when Ezra spoke. To sum up his 20 minute presentation in one sentence: Networking is all about making friends, and nothing more complicated than that.

It is friends who turn to each other for help in commercial matters. Friends trust each other on difficult subjects. Friends rely on the advice of each other. And you make friends by listening to the needs of a new acquaintance.

On the flip side, if you walk into a meeting of strangers and start pumping them with your value proposition, you tend to end up with nothing more than a 2 minute chat. Follow up is minimal at best. 

Listening often takes more than a couple of minutes of your time. The rewards are stronger and last longer.

Maybe there is a spiritual lesson in all of this. Jerusalem has been around for over 5,000 years. Its religious monuments have borne the stories of millions in that time. And the city still stands today.

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