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The declining Palestinian economy? 5 ‘success’ stories

15 June 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

For all its failings, the latest report from the World Bank on the Palestinian economy makes for grim reading; Low growth, high unemployment and little hope for significant immediate change.

So I was encouraged when several items came my way, which showed just how an entrepreneurial spirit can thrive within different parts of Palestinian society.

The Tunnel Economy in Gaza

The New York Times wrote an excellent summary of the “tunnel millionaires” – those people in Gaza who made a fortune from building the tunnels or being part of the teams that sold luxury merchandise smuggled in afterwards. It is often unreported that tens of children died in building the tunnels. And this new trade was forcibly ended when Egypt clamped down on Hamas, ending a commerce worth hundreds of millions of dollars.

However, from and academic perspective, this enterprise, which lasted around a decade and then mutated into an offensive plan against Israel, showed just how creative Palestinians society can be.

The Banking System

Hiding monies from suspicious governments in Gaza and in Ramallah has often been a problem for those Palestinians who can afford to save money. What I find absurd is that submerged amongst all the huge sums of avoidance in the HSBC, there are details of 55 Palestinians, scuppering away around US$150 million. Given the squalor detailed by the World Bank, that achievement is impressive.

I would love to know who this people are and how they managed to secure such holdings. It would make for a fascinating case study.

Mohammed Dahlan

Mohammed Dahlan has led an interesting life. He rose to fame via the street gangs of Gaza, originally opposing the established leadership. Later on he made his peace with Chairman Arafat, and was to make a fortune through various ‘business deals’ in Gaza. He was violently ejected by Hamas in 2007, yet Dahlan now plays the role of “Hilary Clinton” in Abu Dhabi. According to Newsweek and Bloomberg, he is amassing tens of millions of dollars in order to launch a presidential-style comeback.

What I do find a little uneasy here is how such vast sums of money end up in the control of Dahlan, yet the leaders of Hamas and Fatah argue that the average man in the street lives in poverty. It would seem that there is a certain lack of proportion to their arguments, a hypocrisy which comes to the fore when they demand more aid from the UN et al.

Gaza – the double hit

It is now a decade since Israel withdrew from Gaza. And while Israel and Hamas continue to lob weaponry at each other and while the international media is replete with stories about the endemic poverty in this fertile strip of land, it does seem that some progress has been made.

First, one has to be amazed at how Hamas has found plentiful resources to convert some of the former Israeli towns into training grounds for their militias. There is also at least one known rocket manufacturing facility. You could argue that this is a wonderful piece of economic energy, as it creates jobs for those who otherwise would have found themselves on the streets.

In parallel, other Israeli townlets, that had been noted for producing  fruits and vegetables, are now the sites of funfairs, university hospital, schools, etc. 

And it is these very last subjects that make the rest of the facts presented here so sad. Economics is the allocation of resources. If only more of these vast sums had been devoted to helping Palestinians rather than fighting Israel (or each other) or smuggled away for private greed, than the millions of Palestinians could be living lives of comfort and joy.

The cost of boycotting Israel

12 June 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

The BDS movement – Boycotting, Divestment, Sanctions – was founded by Omar Barghouti in 2005. An Israeli Arab, who received his degree from Tel Aviv University, he launched an international campaign to ensure that all Israeli products and services, commercial or cultural, are simply not available.

Theoretically, if Israel were to achieve peace through giving up the West Bank and Gaza, then BDS would lose its raison d’etre and close down. As BDS leaders oppose Israel’s very existence, that is unlikely.

It is estimated that a full economic boycott would cost Israel around 1% of its annual GNP, forcing a rise in interest rates and a potential destabilisation of the shekel. However, if peace were to be achieved, it is further estimated that this would boost the economy of the Holy Land by over US$100 billion in a decade. In parallel, the Palestinian economy would receive a 50% fillip.

Last week, the CEO of Orange, Stephane Richard, had to clarify recent remarks, which suggested that his telecom company had bowed to pressure from Qatar and was to leave Israel. Two days earlier, the National Union of Students in the UK had voted to enforce BDS regulations. In February, hundreds of artists committed themselves to refraining from any association with Israel.

I will leave aside the hypocrisy of the issue. After all, none of these boycotters have uttered criticisms of Saudi Arabia and assumedly continue to use plastic products made in Chinese sweatshops. Nor will they complain of the mistreatment of Palestinians by Palestinians or by other Arab regimes. And of course, the similarity of the BDS campaign to the 1936 Nuremberg laws is completely ignored.

However, what I find amazing is how BDS proponents appear to be oblivious to how their actions actually impact negatively on the Palestinian economy and society. Bassam Eid, a Palestinian social activist observed:

I’m opposed to the boycott because it only ends up harming the Palestinians themselves. Take, for example, the SodaStream plant in Mishor Adumim that is now moving some of its operations to Be’er Sheva. I’ve met with Palestinians who worked at the factory and were fired because of the move. They told me they were earning an average of NIS 5,000 a month there, and that today they are being offered salaries of just NIS 1,400 in the PA.

To give some perspective of the numbers of Palestinians involved, companies located in the Barkan industrial park in the heart of the West Bank have long been a target of the European Union. Yet of the approximately 20,000 employees, around 50% are Palestinians. Sanction these firms and you will hit those people you ware trying to help. And that is only one of many sectors.

Also forgotten in the inferno of politically-correct rhetoric is the impact BDS may have on fragile economies overseas. Consider the UK, which is still trying to emerge from the 2008 credit crunch. Sajid Javid, the Secretary of State for Business, is wholly aware that bilateral trade amounts for around US$7.0 billion, and growing. Tamper into that and that means lost jobs. Ouch!

Actually, it means more than that. Referring back to the NUS, if the lunatics at the student HQ were to implement their own resolution, they would have to throw out all computers with Intel technology. In fact, a similar threat would hang over their smart phones with GPS applications. And as if this was not making them thirsty, they would also have to stop using all water, as many authorities in the UK are now using Israeli tech to protect supplies or purify sources. And the list goes on.

This summer, Israel is hosting a roller-coaster of performing artists – One Republic, Bon Jovi, Dionne Warwick, etc. In England, the Curzon Cinema chain has refused to heed calls for a boycott of Israeli films. A conference in Jerusalem this coming September of Cognitive Behaviour will feature a spectrum of overseas speakers and will include an address how Palestinian children are effected by violence. The list of BDS rejection is thankfully still long and strong.

To close, I am bound to refer to the head of Google, Eric Shmidt, who ironically found himself visiting Israel earlier this week.

The impact Israelis are having on science and technology is immense, so that’s why I’m here and why I’m investing here. (In the modern world, for an economy to grow, there is a need for innovation and the establishment of new companies.) For this to happen, a country must invest in several areas – education, high-speed Internet connections, an open immigration policy that allows leading minds to move between countries, and also an environment that encourages entrepreneurship.

So what is the true cruel and despicable reason that BDS supporters want to hide and then to destroy this human triumph, otherwise known as Israeli society? And why do I suddenly hear echoing in my mind the song from Cabaret, when he whispers that “J” word?

The importance of a business coach; a story about a bakery.

10 June 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

I love my work as a business coach and mentor.

It is a wonderful experience to take a concept and help somebody convert that into a commercial operation. It is thrilling to help owners restructure a struggling outfit into a thriving business. I become invigorated, energized, when I see clients swallow up problems that weeks beforehand would have had them tearing out clumps of their hair.

Actually, I am lucky twice over. Much of my clientele is based in and around Jerusalem. This is a very special city, and not just because it is the centre for three global religions. Today, Jerusalem is a high-tech hub, especially in bio and medical fields. It even boasts a weekly ‘hacknight for women“.

Business mentoring is a mutually rewarding profession. Just this morning, I was talking to somebody in a networking session, as they described their wish to find a partner to help in setting up a new concept. I immediately pointed out that what they were describing were the functions of a coach or mentor (no, not me), and showed them how they could secure a subsidy for such a position. All are challenged to ensure the success of the adventure.

So, it is my pleasure to break a rule and mention a very specific client of mine, David Katz. He contacted me about 18 months back. Two things were evident from the kick-off: His efforts lacked a concise vision and thus could not be bound in a profitable manner. Yet, I was meeting a person of intense drive, supported by oodles of talent.

Over several months, David became more focused, creating new revenues, yet never quite “getting there”. One day, on return from an overseas trip, he announced with passion that he wanted to set up a quality bakery, using ovens to bake tasty bread. I was delighted, because I immediately understood that this was a concept that encompassed many of David’s key strengths and ideals.

This coming Friday, David will open the doors to his bakery to the general public. “Pat Bemelach” is located on the Kibbutz of Rosh Tsurim, just beyond south-east Jerusalem People will enter an atmosphere, which echoes an earthy, welcoming, late-Victorian feeling. The branding – logos, T-shirts, etc – is top class. While at very initial stages, with much to be proved in the marketing, the launch pad is there for a successful business.

And from a personal point of view, I am genuinely happy for David. He has showing a continued willingness to change, through a process of listening, when in the past he may have been reluctant. He has also benefitted from the allegiance of Anomarel Ogen, who David describes as his guru. And it is David’s personal skillset that is bringing all the separate components together.

I am looking forward to Friday morning and seeing the ovens working away. And that is why business coaching is fun.

Listen to the World Bank tell the truth about Palestinian economy

5 June 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

The latest report from the World Bank on the Palestinian economy makes for depressing reading. With specific reference to Gaza since last summer’s war, there is barely one statistic of encouragement amongst its 40 pages. 43% unemployment, 39% poverty rate, growth non-existent, 80% receive some aid, and so on.

Gaza’s economy is a disaster. The authors do not hold back. Israel’s blockade since 2007 created this humanitarian disaster. The way Israel attacked in 2014 merely enhances the problem. By implication, it is clear who must take responsibility.

So, it was strange that buried deep on page 17 was the observation: “Economic decline in Gaza started much earlier and has been linked with armed conflict …… Gaza’s economic performance over the past two decades has been at the global bottom, with only three economies experiencing lower rates of growth. Thus, Gaza’s total GNP is only a couple of percentage higher now than it was in 1994.”

Note! In 1967, lsrael captured the territory from Egyptian rule. 1994 was when Israel handed over control of the economy to the Palestinian Authority. A decade later, Israel withdrew from Gaza, leaving intact the highly lucrative greenhouse industry. By 2007, Hamas had violently overthrown the corrupt apparatchiks of Fatah.

And of the economy prior to 1994? Again according to prior work from the World Bank, “the annual growth rate (for the period 1968 to 1999) establishes itself at 5.5%.” As the author Sebastian Dessus observed, this was one of the highest rates in global terms, even allowing for population growth. It was also achieved during Israeli rule.

In other words, there is a disconnect. Under direct Israeli rule, there was a boom. The moment control was released to the Palestinians, this golden period drew to close and was followed by increased violence and economic doom. If you were a university lecturer, marking the May 2015 report, you would be forced to question if the facts justify the conclusion.

Permit me to become a little turgid and pick out some other salient points of the new report.

Page 12: “The wage bill (in the public sector) is over half of current spending. ….. The number of PA employees increased by 1,296…and mostly in the military sector, which raise sustainability and efficiency concerns given that the sector is already large by international standards…”

In other words, there has been an investment in military infrastructure rather than improving social services or industry. And much of this budget comes from the largesse of Western taxpayers.

Page 20: “The crackdown of the illegal tunnel trade between Gaza and Egypt led to a significant loss of employment opportunities”. Fair enough, but it was Egypt who closed the border and the tunnels, not Israel. So, to be precise, it is Egypt that enforces a blockade from its side, while Israel encourages a controlled flow of goods and personal from its side.

Page 26: The authors question what would have been the upside if there had been no hostilities or “access restrictions”. They estimate that the Gaza economy would have more than doubled in size, climbing by nearly US$4 billion. The implication is that Israel is directly responsible for this loss.

However, as the virtual university academic, I am mystified why the owners of the report failed to ask an alternative question. Why have the various rulers of Gaza since 1994 invested in a military economy directed at  Israel at the expense of their own brothers and sisters? Why have the greenhouses been converted into Hamas training camps? This policy has lead to war and destruction, as well as a period of deep poverty as summarised in the World Bank’s own stats.

Page 30: The argument that Israel is to blame was one of the key premises that saw the coming together of the Cairo Conference after the conflict of summer 2014. US$5 billion of aid was promised, of which 30% was specifically designated to Gaza. Of that sum-total, US$583 million – about one-third – has still to be delivered. And much of the other total.

If this is so important a cause, why are donors holding back? And, do the oil-rich kingdoms of the Middle East comprehend something that the West cannot recognize, because they only contributed 40% of that US$ 5 billion total? (By the way, it is evident that much of these billions was actually taken out of existing budgets and just renamed.)

Recalling an old joke about Stalin receiving a message from Trotsky, it is not what you say, but how you say it.

I am sure that the World Bank’s figures are accurate. Yet, they have been used selectively, assumedly to slot into a  pre-drafted politically correct narrative. In its current form, the report does not provide a guide for economic reforms in the Palestinian territories. It only serves one purpose – to supports the rhetoric of Hamas, whose raison d’etre is the destruction of Israel.

But how do I actually put together ‘an elevator pitch’? The Jerusalem version

2 June 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Elevator pitch – 15 or so seconds to tell somebody, as if you were in an elevator (or lift, for the Brits) with them, why you are so good at whatever and why that is important for them.

The web is full of comments about why this skill is so fundamental for most of us. I am particularly fond of a recent suggestion from a comedienne-turned-motivational speaker, who asks us to recall the meaning of a ‘punch line’. It makes you stop in your tracks and realise that something special has happened. In other words, get that ‘extra bit’ into your speech or pitch.

Here’s the catch. People are shown how to practice their pitch, like an actor. You can be encouraged to incorporate themes or facts. However, how do you bring it all together? What specifically are you going to say?

What made me think about this is meetings that I held this week with two business mentoring clients in Jerusalem. The first – call him Tom – is in the process of a creating a service business and has just benefited from a steep training course in an accelerator. Here, they drilled him through the routine of the elevator pitch.

I asked Tom to roleplay his speech, which he did to perfection. Only, I was left feeling empty, and blurted out ‘so what’. It was interesting and well delivered, but it lacked strong meaning and direction. No punch line. He had simply missed out a key phrase that made all the difference.

By comparison, today, I sat down for the first time with Wendy, a nervous biotech freak. Deeply committed to her field of expertise, I asked her why she wanted to become a consultant. The answer was uninspiring, and continued to be despite some extra probing. I was troubled.

So I gave Wendy a quick example, speaking as a business coach, explaining in a quarter of a minute how and why I was of value to an imaginary person standing opposite me in a lift. Wendy responded that I had not been fair. “In biotech, what counts is X, Y and Z. And that is where I have real experience,” she retorted haughtily. For the first time in the hour, she had become animated.

I let Wendy ramble on, and then brought her to a stop. She was unsure as to what had happened, until I had assured her that she had just uttered a great, if rough at the edges, elevator pitch. She smiled.

You see a core element to a creating a great elevator pitch is to understand your own passion. This is what protects and then enhances your commercial vision to a level that you want to share it with the world.

Who leads in innovation; London or Israel?

1 June 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Last week, I considered how Israel’s high-tech economy is able to create growth companies out of start-ups. The key is not to lose the emphasis on innovation and the innate drive for technological change.

Shortly after I completed that posting, I was faced with an article, which outlined London’s pathetic path towards creating an eco-system, enriched by innovation and change.

Strange, I thought. London has a captive audience of 8.5million residents, slightly larger than the populace of all of Israel. Resplendent in culture and history, it hosts some of the globe’s leading universities. Its financial heartland can support millions of start-ups. And yet, ….

And yet, when it comes to innovation, London loops in behind Israel, fifty percent of which is arid land. Further, Israel has two sub-populations, Arabs and ultra-orthodox Jews, known for their large families and poverty. It is a country surrounded (literally) by geopolitical threats to its existence. The government budget is defense-spending centric.

Given these restrictions, what is it that has allowed (or demanded from) Israel to jump on the start-up bandwagon decades ago and never get off to this day?

There is a quotation attributed to David Ben-Gurion, the country’s first and legendary Prime Minister. “Nothing is impossible until it has been accomplished”. Cute, but why the need to push the impossible and so relentlessly?

For me, the underlying theme is the country has to keep proving that it is one step ahead. Unfortunately, the day that the Israel declared independence in May 1948, it was invaded. That threat has yet to be removed. Add in to the mix the fact that allies have rarely actually fought on behalf of Israel, then the citizens come to realise that they need to find a way to make things succeed for themselves.

It is this desire for self-reliance that has created a high-tech culture in Israel, which has been difficult to match, even from places like London with its near unlimited resources.

From innovation to growth – when do you stop being a start up in Israel?

30 May 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel

For years now, Israel has rightly carried the label of start-up nation. In the past few days, David Page, innovation partner at Visa Europe Collab, echoed this very theme, when he announced his company’s new r&d centre for the Holy Land.

As Bloomberg posted back in February this year, Israel is ranked the fifth most innovative country in the world. Impressive for a people of barely 8 million people and where half the land is covered in an arid desert.

It was only a couple of years ago, that pundits loved to criticise the hype of Israeli high-tech. The argument cited too many quick exits and too few companies going on to employ hundreds if not thousands.

However, this coming Monday, the Israel Growth Conference will take a very different perspective. Featuring leading execs from Wix, Outbrain, Payoneer, Kaltura and others, the participants will discuss just how former start ups can progress. They have shown how it is possible to remain independent, while building up teams in Israel (and also overseas). In fact, Wix’s launch on NASDAQ sparked a flurry of other Israeli companies raising money on American soil. It is still considered a “buy’ share at this time.

“Calcalist” is a financial newspaper, which is hosting the conference. I was struck by a feature article which raised the question; ‘when do you stop being a start up’? The answers varied, such as:

  • when the key founders no longer meet in somebody’s kitchen, but field a team in a functioning office
  • when you move into profit or positive cash flow
  • when it just feels like you have progressed

I suspect that there is no definitive point in time for most. However, what Israel’s economy is beginning to show is that not only are new companies still joining the gravy train of trying to become the latest successful start up, there is a new trend. This reflects how young Israeli companies can adapt to their new commercial heights, yet remain located in their home territory.

Israel’s rogue economy – Part 2

25 May 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

Israel has a free and relatively strong economy, which includes a robust and open health system. Israel operates as a rogue state, and it is this anomaly that helps it serve its own and other peoples indiscriminately around the globe.

Thus I described how Israel’s economic ability goes beyond the obvious parameters, taking aid to Syrian refugees as well as victims of natural disasters such as in Nepal.

I was prompted to have a second look at the call last week from the World Health Organisation to examine how Israel proffers medical services to Palestinians throughout the region. The terms of reference are carefully loaded to make sure that the final report is hardly likely to be balanced.

So, I was struck by the words of two commentators, which portray a very different picture to what the officials of the WHO are trying to conjure up.

Stuart Palmer’s blog “The Haifa Diary” makes a purpose in showing the side of Israel rarely reported in the foreign press. I was stunned by the size and scope of the stats he quoted in his latest posting.

According to the report, Israel’s Coordinator of Government Activities in the Territories Unit (COGAT) has issued roughly 27,000 permits for Gaza residents—including both patients and their families—to receive medical treatment in Israel and elsewhere. According to the World Health Organization, in 2013, the most recent year for which there are statistics, 3,840 Gazans were treated in Israel.

Stuart goes on to relate of specific incidents. And his observations are backed up by an independent source, which ironically is known as a frequent critic of Israel. The New York Times, also citing COGAT sources, observed that “the fact that Israel grants any permits is somewhat surprising given the years of hostilities with Hamas, an Islamic group sworn to Israel’s destruction.”

An analysis of the World Bank reports on the Palestinian economy will note that, whatever meager resources are available, they are often invested in the public sector – a euphemism for creating tunnels and fighting units to attack Israel. In contrast, Israel registers humanitarian efforts that cross borders and continents. And the reason such aid is available is because the economy has grown by around 3-4% on average each year since 2002 – despite the Intifada, the rockets from Gaza, and the incursions from the North.

The question for the WHO is will it be able to focus on economics – the science of the allocation of resources – or will it yet again waste international taxpayers’ money as it succumbs to standard, inaccurate yet politically correct dogma?

“Free Economies” in the Middle East – the rogue anomaly

22 May 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel

In economically free societies, governments allow labor, capital, and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself. 

Heritage Foundation, January 2015

Of the 186 countries observed by the Heritage Foundation in their annual report, four states from the Middle East were considered ‘mostly free’, with Israel ranked at 33. Of the eight nations which could not be marked, five are members of the Arab League.

This freedom also applies to the health sector. I have written before of the amazing work of Israeli hospitals in promoting multiculturalism. Professor Ahmed Eid and Dr Aziz Darawashe are just two examples of leading non-Jewish physicians in the Holy Land. In any given ward in Jerusalem or elsewhere, patients of all backgrounds receive the best support from staff of all creeds.

So I was struck with the irony of three events coming together on May 20th and 21st this year.

  • In Geneva, 104 states of the World Health Organisation voted to prepare the way for a damning report on Israel’s treatment on Palestinians, implying that they are denied full access. This is the same grouping that recently declared how 125 million young females have suffered from female genital mutilation, yet none in Israel. It is essentially the same set of people who were criticized for ignoring the plight and massacre of Palestinians in Syria.
  • In Syria, ISIS captured the last border crossing with Iraq. This follows its triumph in the ancient city of Palmyra, where the massacres are reported to have commenced. As their supporters claim, ‘we love death as you love life’.
  • In an airplane, somewhere over the Indian Ocean, my wife and I struck up a conversation with a fellow passenger. As I described on the Facebook page of Sussex Friends of Israel, we were returning home from Bangkok. “Sitting next to us on the plane was a urologist from Nepal. He had just spent 4 weeks liaising with the Israeli medical teams in his home country, and could not praise them highly enough for the efforts after the earthquake. he saw them as hard working and enormously dedicated. Meanwhile, he himself was on his way to a Tel Aviv hospital to carry out a 3 week study programme that had been planned some months previously.”

I find the contrast ironic and sad. Numbering hundreds at its peak, Israel had arguably the largest medical team of volunteers in Nepal last month. I have not been able to obtain if other countries from the Middle East responded in kind.

And the reason Israel made such a contribution was not based solely on moral grounds. Nor on diplomatic gratis. Israel could afford to do so, because it has a free and relatively strong economy, which includes a robust and open health system. Israel operates as a rogue state, and it is this anomaly that helps it serve its own and other peoples indiscriminately around the globe.

How much time should a small business devote to marketing?

18 May 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel

I have several clients, who can be described as owners of small or medium-sized businesses. And the question comes up fairly regularly as to how much time they are required to devote to marketing and sales.

Much of my business mentoring and coaching takes place in the greater Jerusalem area. This week, I am in Melbourne, and the same subject cropped up here. For example, to paraphrase a conversation with a CEO of a software company: ‘I know I need to be out there selling, but I have limited resources and time’.

Fair point. And he is by no means alone. Later that evening, a similar conversation resulted in another oft-quoted question: “but where do I look for the new clients?’

In all cases, I offer two rules of thumb.

First; in an average month, set aside 20% of your time (and manpower?) for sourcing and then meeting new potential clients. This applies even if you are working flat-out. You never know when the supply line will dry up, which means that you must always keep new ‘blood’ running through.

Second; remember the old stories of the door-to-door sales rep? And remember how social or digital media marketing was supposed to replace that sort of pounding-the-streets approach?

Yes, there are some excellent methods to use the internet to enhance customer engagement. However, nothing beats getting out there and trying to put your face in front of potential customers. In other words, start joining networking groups and then attending regularly. Pick out key trade shows. Cold calls. And even speak to your friends to see if they can give you a lead.

I cannot guarantee you what will and will not succeed. All I know is that I once I began to practice what I preached, the results were impressive. And similar things can be said of my clientele, who implemented similar courses of action. By way of proof: In the middle of one of these conversations, as a result of my outreach work, a new potential client phoned me from Jerusalem.

(My thanks to the CEO mentioned above who unwittingly gave me idea for this blog).

Israel’s post election economics

17 May 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Last week, I pondered whether “after nearly 15 years of near continuous success, if the Israeli economic boom is about to be swallowed up in the squabbles of invisible and unaccountable politicians”.

A few days later, figures were released that showed Israel had raked in around 3.6 billion nis – almost a billion dollars – more than expected in tax revenues. Now to give that figure some perspective, it would more or less cover the handouts demanded by Netanyahu’s political allies to join his government. Alternatively, the Bank of Israel is already hinting at cuts required for the 2016 budget of around a similar amount. Whatever, Israel’s public finances appear sound.

So were my earlier warnings inaccurate? Well, it is certainly true, that extra dosh like this is a healthy windfall for any exchequer. However……..

However, look where much of the cash has come from. First, people are spending more than expected. So, there are indications of a mini consumer boom. Second, purchases of housing have leapt forwards, partially speared on by the threat of new taxes in this arena.

In other words, the growth has not come form higher exports or investment, and neither from a high-tech boom. With some pertinence, on the same day, figures were released, revealing how more people are now looking for work. And on Friday, we learned that the CPI has risen by a large and unexpected 0.6%. Is inflation on the move again.

So where does this set of news leave the Israeli economy? The answer has remained the same over the past few months – in need of some urgent leadership and solid management. Today, that is sorely lacking from Netanyahu. His team has four years to learn how to succeed.

Jerusalem – a high-tech hub?

12 May 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Time Magazine recently listed Jerusalem as one of the world’s emerging high-tech hubs to watch. For a city known as the centre of three great religions and that has spent much of its 5,000 year history lathed in conflict, that statement is quite a move away from the stereotype view.

Yes, the Hebrew University is ranked in the world’s top two hundred places for tertiary education. The bio / pharma sector has blossomed in the past decade with over with over one hundred companies located in the area. Intel has a major r&d plant in the north of the city. Meet up groups like the Jerusalem Business Networking Forum and PICO have emerged through street initiatives.

Yet while the list of attributes is impressive, come Friday late afternoon, as the sun descends, much of the holy city goes to sleep. The large government offices shut down. Aside from the Arab market and some of the pubs, Jerusalem rejects comparisons to Silicon Valley.

Maybe that is about to change. There are already ambitions plans to revamp the entrance of the city, creating large amounts of office space. Within a couple of years a new train line will link the city to the rest of the country. (For now, the old Ottoman paths are still in use). And despite this year’s downturn in tourism, new hotels are planned.

This week, Mayor Nir Barkat, a former high-tech supremo, launched a 5 year initiative for the city. The aim is to double the level of foreign direct investment into Jerusalem. The hope is to bring 5 major multinational conglomerates to the capital. To date the offices of Microsoft, Siemens, Lockheed Martin et al tend to remain in Tel Aviv.

Simply put, the number of jobs in the sector is expected to double and this should have a positive knock-on effect in auxiliary services. As part of this process, Barkat has encouraged the shooting of three major media productions in the past year alone. Portman, Gere and others have had an opportunity to visit the city recently.

Finding the resources to invest around US$8 billion over the next five years is a tall order. But then take a look at Our Crowd and Besadno. These are two private groupings, based in Jerusalem and investing tens of millions in primarily Jerusalem-based start ups. I wonder how the Davids, Solomons and Herods of old would have considered these near miraculous changes. The image of the city of Jerusalem is receiving an encouraging and sorely welcome commercial facelift.

Election results and an economic boost: UK or Israel?

11 May 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Scenario 1: David Cameron’s right of centre Conservative Party springs a surprise election win last week in the UK. The stock exchange in London surged ahead and sterling had fun at the expense of other currencies.

Scenario 2: Bibi Netanyahu’s right of centre Likud Party sprung a surprise victory in the Israeli elections two months ago. The financial outlook for the country looks uncertain.

Now both Prime Ministers have great credentials when it comes to the economy. In the UK, the Conservatives have taken the country beyond the grim era of the credit crunch. Netanyahu can claim much of the credit for Israel posting high growth figures, near annually, since 2002. So why the difference in perception?

The question is especially pertinent, when you consider that Cameron still faces many challenges on the economy. There are demands to hold back on spending to ensure that previous gains are consolidated. Yet the business sector and others are crying out for additional financial incentives. However, as the Cameron-Osborne team have done well to date (as was just confirmed by the electorate), there is an overall belief that they will pull through again.

In Israel, there remains confusion. On the positive side, Fitch and other agencies maintain Israel’s high credit rating. Unemployment is at a historic low – about 5.4%. At least according to the stats, inflation is minimal. Multinationals, such as Lockheed Martin and Microsoft, continue to invest in the Holy Land.

And yet?

  • Two months after the elections, and only today a government may (or may not) be formed. Where is the long-term management required? Everyone knows that a coalition based on one solitary vote does not allow the Minister of Finance to impose a budget that he believes in.
  • It is an open secret that during the negotiations to create the new coalition government, the various small parties made demands worth billion dollars. The actual amounts vary from source to source. For a cabinet that will be asked to cut a similar amount from the 2016 budget, that is simply stupid if not down right irresponsible.
  • Where are the true debates to reduce the price of housing for young couples? What has been mentioned to limit the power of vested interests such as the Fruit Growers Association or unions at the Electricity Company? Why will resources be diverted away from universities or from helping small businesses, merely in order to pay for ‘coalition bribes”? I could add more.

It is these issues that force outsiders to consider whether Israel’s new government – whenever it might finally commence working – has what it takes. After nearly 15 years of near continuous success, is the Israeli economic boom about to be swallowed up in the squabbles of invisible and unaccountable politicians?

Israel – that nagging racist theme

8 May 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Israel has hit the news for the wrong reasons just recently. The Jewish community that originates from Ethiopia has had enough of discrimination from the police and other authorities. It has countered with violent demonstrations.

However, it was the vitriol and damage that finally caused others to wake up to this disgrace.  The Prime Minister was shown greeting Ethiopian children. The President issued a strong statement, condemning the lack of help for these communities. As in any other trouble spot – Baltimore, Parisian ghettos, or elsewhere – racism is wrong. And it always impacts negatively on the economy to the detriment of most of society.

The only good thing is that this horror is limited in scope. For example, my children and their friends have openly learnt and served in the army with Ethiopians. And there is a more proactive side to Israel’s opposition to racism. Because despite a small population of eight million people and surrounded by peoples that seek its destruction, Israeli governments have consistently sought to work with, to support and to integrate as many as possible.

Here are 4 examples of this excellent outreach work from just the past few months alone:

Nepal: Did you know that Israeli volunteers comprise around 30% of all the medical teams, who are on the ground to help after the earthquake struck Nepal. Of the hundreds treated so far in Israeli built field hospitals, there have been at least five deliveries of new born infants.

Tanzania: I have written in the past about the Save A Child’s Heart team from Wolfson Hospital in south Tel Aviv. Amongst its numerous activities, it has trained hundreds of Palestinians doctors and save the lives of thousands of young children from around the world, 50% are form Gaza and the West Bank. Its latest project has involved the screening of hundreds of youngsters in Tanzania and Zanzibar – ironically(?) relatively close to Ethiopia.

Nazareth: Closer to home, encouraging the Arab community in Israel raises a host of emotional and geopolitical issues. That said, the efforts continue. NaserahTech is a hightech incubator that was set up last year in the ancient city of Nazareth, primarily to encourage the role of more Arab women in commerce. It has received support from the Prime Minister’s Office as well as Cisco.

MASHAV: MASHAV describes itself as Israel’s Agency for International Development. It has been active for decades, working in countries where few would expect it to be present. Maurice Ostroff recently reminded me that “mayors of Johannesburg, Cape Town, Randburg, George, Grahamstown and Port Alfred, (as well as) more than twenty South African Members of Parliament, and hundreds of local government officials and ministers of provincial councils had passed through MASHAV seminars.”

For Israel, racism is a term to be starred in the face and countered, actively. I could mention the wonderful Christian-Arab Israeli diplomat, George Deek, who takes pride in discussing how he grew up in Jaffa. And this week, Dorin Cioba, the king of the Gypsies completed a successful visit to the Holy Land. In parallel, 200 farmers from Gaza took part in the annual Agritech exhibition in Tel Aviv.

Israel may not be a perfect society. Yet, in the same breath, it actively practices what it demands of others: an openness to share its capabilities with all and on behalf of all economies, free from prejudice and regardless of ethnic background.

 

Just how difficult is it to work as a business coach and mentor?

1 May 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

I have been working as a business coach and mentor for nearly a decade. In truth, I was probably practicing the profession long before that without realising it.

I really enjoy the work. Primarily operating with small and medium-sized operations, it is immensely gratifying to see CEOs change how they think, sales pick up considerably, bank balances move into the black and much more. Only this week, I watched as the owner of a 25-person manufacturing operation initiated a new marketing strategy, which should have a direct positive impact on the bottom line in the financial statements. Three months ago, this movement forward had been just a remote possibility.

I recently read an interesting blog called “overcoming the common toughest coaching challenges“. Available from the Harvard Business Review and featuring case studies, I was specifically struck by the last few lines:

Coaching is meant to be about positive change……. Of course, you will run into tricky circumstances, but remember that worrying or focusing on those challenges won’t move you, or your direct report, forward. Make room for the change you want to see.

Much of my work takes place with in Israel, around the Jerusalem region. Now this is no easy market. It is very common in the first meeting for people to sit there, arms folded, starring pointedly straight at you. The body language is oozing ” you think you know better than me – I’ll show ya!”

And every time, I love the challenge from scratch. There are a few tricks that I have learnt over the years.

  • Never be flustered by the opening bravado.
  • Early on, find a gentle way to point out that you do not necessarily know better than the client, but……
  • ….but also allure to the fact that you have many other skills to offer that will compliment their knowledge. I rarely reveal the secrets in the first few sessions.
  • Just as they are launching in to an ‘I know it all’ lecture, challenge one of the initial so-called statements. More often than not, the ‘fact’ is merely the ‘expressed hope for the future’.

Yesterday, I was having a coffee with a friend in the holy city. Before I knew it, I was putting on my mentoring work hat. As he spilled out some of his salient issues and responded to my questions, it was fascinating to observe the changes in his approach. Business coaching can be an enormously satisfying and gratifying profession.

Experienced business managers – poorly written emails: Why?

27 April 2015
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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

Anyone reading this probably receives hundreds of emails every week. For all that, it is staggering how many of them are so badly written. And when I say badly written, I mean inappropriate, if not down insensitive. they just get under our skin, unnecessarily.

For many, email has become a medium for instantaneous response. We abbreviate what we want to say. We shorten words to single letters. And few reread what is written before the ‘send’ button is attacked. All of this is a recipe for disaster.

  • Have you ever received a message that says: ‘Sorry no time to explain properly, but…….’?  (What? You don’t think I am worth a few more seconds?)
  • How about the edited email that comes back to you full of corrections in the autoset colour of RED? (makes you cringe, and potentially down right humiliating).
  • And then of course there are numerous bosses who feel that they can hide behind the faceless screen and send out a barrage of criticism. (Whimps and more humiliation).
  • Yucky typos, insensitivity, lack of basic understanding, etc, etc – we receive them all……….and even fall guilty of such misdeeds ourselves.

As a business coach in Jerusalem, I probably spend about one session a week showing clients what they should (and should NOT) put into a message. I have just read a very interesting summary on this topic – why so many people fail to construct a decent email. The author, Andrew Brodsky, makes an excellent point. You do not have to hide an emotion, but there are so many ways to express it, both constructively and effectively.

I thoroughly endorse what Brodsky went on to suggest:

One strategy that has been found to be very effective across settings is to engage in behavioral mimicry (i.e., using emoticons, word-choice, and slang/jargon in a similar manner to the person with whom you are communicating). In a set of studies of American, Dutch, and Thai negotiators, using behavioral mimicry in the early stages of text-based chat negotiations increased individual outcomes by 30%. This process of mimicry increases trust because people tend to feel an affinity toward those who act similarly to them.

So let us make a pledge together this week. Before whipping out the next bunch of emails, take another 15 seconds just to think how the person will feel when they receive it and what it will prompt them to do. This extra investment of thought may well save you a fortune in time later on.

Israel’s economy is 67 years old – a lesson for others to follow

23 April 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

As Israel celebrates 67 years of independence, this is an opportunity to see just what its economic success can teach others in the region.

Remember: From 1948 until the mid 1980s, Israel’s leaders deemed it best to govern a closed economy, protected by high tariffs and government regulations. Since then, the country has witnessed spectacular growth, often characterised by the term ‘start-up nation’. According to the Ministry of Economics, “since the Establishment of the state, the number of employees in Israeli industry has grown from 65,000 to 400,000. Israeli exports have soared from $5 million to $47 billion.” Phenomenal!

And that growth shows no sign off stopping. For example: –

  • The Israeli economy grew 7 percent in the last quarter of 2014, its highest rate of growth in recent years.
  • Even Jerusalem is no longer seen as just a tourist centre for the religious, but a thriving port of call for high-tech and biotech investment opportunities.
  • In the past month alone, multinationals like Apple or Dentsu from Japan have upped their involvement in the economy of the Holy Land.
  • It is estimated for 2014 that 300 start-ups raised approximately US$3.4 billion in capital. A further 100 companies sold out for US$7 billion. 2015 is showing a similar pattern after just four months of activity.

The list of positives is very long. Although there is still much to improve, one commentator wrote: “Israel boasts one of the world’s most innovative economies with the highest ratio of startups per capita, the second-largest venture-capital industry and more than half of our exports deriving from the high-tech sector.” Unfortunately, despite the boom, ‘there is chaos all around’.

Let us compare this success story to the Palestinian economy of today. Proponents of Ramallah and Gaza argue ad nauseam that there will be no riches for its people until Israel takes down the military road blocks in the West Bank and rescinds the blockade of Gaza. Yet, there are now very few such army positions. And it is Egypt that has shut down its border with Gaza, while Israel allows in daily lorry loads of humanitarian supplies.

Inevitably, there are many reasons why the Palestinian economy is thread bare. To name a few: minimal efforts to collect taxes, corruption, a poor historical base, and yes Israel can take some of the blame. However, there is something more fundamental, something that Israel began to appreciate back in the 1980s.

A strong country cannot just rely on a strong military. The economy needs to thrive as well. That requires diverting resources into domestic infrastructure. In contrast, Hamas appears content to ignore the housing problem in Gaza, concentrating on building more tunnels to attack Israel’s towns. Fatah makes little attempt to install basic social principles of government. Where are simple programmes to encourage small businesses? As I wrote over a year ago, the Palestinian economy remains a story of “what if?”.

And if you are really looking to the answer to that question as to what could have been achieved: Well, success is not just measured in statistics. The beauty of Israel has been summarized in an amazing and stunning collage of 67 photos. They reveal just what a fantastic place Israel has grown to be and how it has come to prosper, for peoples of all faiths and dreams. Happy Birthday, Israel!

Elwyn – giving special people a new meaning to Independence

21 April 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Elwyn serves more than 3,000 children and adults with disabilities throughout Israel. Headquartered in Jerusalem and with centres throughout the Holy Land, Elwyn offers employment opportunities, vocational training, educational support, sheltered housing and more to a population that it is easy to ignore. Since 1984, Elwyn has ensured that thousands have found their way to become near self-supporting, when otherwise they would have had no place in society.

In recent years, I have been honoured to have played a small backroom role at Elwyn. It has been a fascinating experience, observing how the facilities have progressed. Time and again, statutory agencies such as the Ministry of Welfare have almost come to depend upon the organization, especially as it provides services for Muslim communities in East Jerusalem and minorities groups like the Druse in the north of the country.

The cross over between the ethnical divides is fascinating. It appears to be seamless, although it is the result of detailed professional work. The top team includes the observant Jew, the secular non-Jew and most ‘creatures’ in between. It is surely a lesson for most other countries in the Middle East. Elwyn simply strips away the stereotyping that journalists try to attach to Israel.

I dropped into Elwyn earlier this week, just as Israel is about to celebrate her 67th Independence Day. However, it must be stressed that Elwyn is not an isolated drop of racial harmony.

  • The commander of the crack Golani infantry brigade, Ghasan Alian, is a member of the Druse community.
  • Salma Fayumi is a nurse and was the runner-up in the reality TV programme ‘Master Chef’.
  • Dr Aziz Darawshe heads the Emergency Unit at Hadassah Hospital, arguably the largest medical unit in Jerusalem.
  • Israel’s amabassador to Norway, member of the Supreme Court, head of the Achva Academic College and…etc, etc,etc….. all come from minorities in Israel.

It is a very, very long list. In the words of a newspaper columnist, it is “simply inspiring” that a young female Arab journalist, Lucy Aharish, has been chosen this year as one of the celebs to light the traditional beacons of Independence, a ceremony broadcast live on national television to a large audience.

Sadly, there are still those that seek to portray Israel as openly and overtly discriminatory. Yes, the chanting at a couple of football grounds is to be deplored. However, that does not mean that Israel is some form of “catastrophe“. And as for claims of ‘ethnic cleansing’ – such as those offered in the UK’s Guardian newspaper – the brilliant efforts of Elwyn, Alian, Darawshe et al reveal the immorality and baselessness of such diatribes.

Israel at 67 has come a long way since it was invaded by its neighbours in 1948. It has more to learn. With the Elwyn’s of the country to guide, the Jewish state has a strong future ahead, one that can be shared by all.

Business skills- 3 tips to contemplate

17 April 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel

What makes me tick as a business mentor and coach? It is the new challenge that each client throws at you, helping them to move on and seeing their organisation succeed.

The issues vary; sales, finance, human resources, etc. However, be the customer large and established or barely past concept stage, certain subjects are common to all. Interestingly, although much of my work is concentrated in the Jerusalem region, I am aware that these same themes are discussed by colleagues around the globe.

1) Leadership

The internet is deluded with blogs on what makes a good leader. All CEOS strive to be and have often convinced themselves that they are excellent motivators. Unfortunately, most of them confuse leadership with management. Despite an obvious overlap, it is essential to understand how the two skill sets are not the same.

Gary Hamel delivered a refreshing guide last week in the Harvard Business Review to what makes a strong leader. Using Pope Francis as his model, Hamel latched on to the Pope’s desire for internal reform. “Leaders are susceptible to an array of debilitating maladies, including arrogance, intolerance, myopia, and pettiness. When those diseases go untreated, the organization itself is enfeebled. To have a healthy church, we need healthy leaders.”

Of the 15 points mentioned, I felt three are worthy of emphasis, if only because I see how often they hinder their work of my clientele. Too many leaders: –

  • feel that they are indispensable
  • try to prove their worth by being extra involved
  • suffer from ‘Alzheimer’s’ They have stopped learning, even forgetting established key techniques.

2) Creating new sales

I have previously written about Jonathan Gabay’s entertaining approach to the ‘hierarchy of needs’. He cleverly explains how to win over that elusive extra sale.

So many people just rush around, blurting out any old catch phrase that vaguely hope will trap the next potential fish. I find I have to explain time and again – sales is a process. And as Gabay points out, this timeline must not be laced with false empathy and promises. Globalisation and the internet demands higher standards.

3) Resilience

Every month, I eagerly await the latest writing from Dr. Robert Brooks. His key theme is how children can become resilient to hardships, using their strengths in order to succeed.

The latest blog from Brooks is fascinating. He reaffirms the crucial need for at least one supporting parent. Now, we all know that the work and commercial environment can be cruel. I had one person near sobbing to me last month, as they reported the loss of a few clients, a trusty member of staff quitting and the demise of their website.

By way of a solution, I noted what Brooks concluded on behalf of children:

A caring and supportive relationship is an essential foundation for resilience, but that relationship must be used to reinforce certain attitudes and skills if resilience is to emerge. One such attitude is related directly to a concept I have emphasized in my work, namely,personal control. Resilient people focus on events over which they have some influence or control rather than adopting what researchers have referred to as a “victim’s mentality” and constantly asking, “Why me?”

This is so true and something that all business mentors and coaches should convey to their clients.

Winning over new clients – following a ‘hierarchy of needs’

9 April 2015
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Categories: Afternoon Tea in Jerusalem, Business, Israel

Ever sat in front of a supplier, when you are hit by that “yuck moment”. For all the great salesmanship, you suddenly realise that you are being smothered by meaningless empathy. Next thing you know, you give a slight uncontrollable shiver of the body.

Yet, many of us have also been on the other side of the table. The question remains: how can we win over that next potential client and without sounding equally apathetic to their plight?

Everywhere you turn, you can see failed attempts by people who should know better, trying to win us over.

  • Turn on any TV advertisement and 90% are trying to capture our psyche. Almost humiliating.
  • Politicians only remember to pitch to us once every four or so years, and so it is no wonder that the West is full of cynical democracies.
  • When trying to rope in investors, it can sometimes feel that the gap is so wide between the two sides that they are from separate planets. And so on.

I have spent many mentoring and coaching sessions with business clients, who almost demand to know what is it that they can say that will excite the prospective bait. It is as if they are expecting me to hit on one word or phrase that will clinch their next big deal.

The truth is often very different. What our budding Prime Ministers, start-ups et al tend to forget is that selling is a process. It is developed over a time line, and takes both parties through a set number of stages.

One of the best descriptions of this approach has been crystalised in a new video from Jonathan Gabay, the author of a new book called Brand Psychology. (Disclosure: I know Jonathan personally). In the clip, Jonathan describes a four step process, which he has labeled ‘the hierarchy of needs’.

Essentially, the seller is required to build up a pyramid of four key emotions, and in the following order: belief, trust, faith, and hope. Without accepting these fundamentals, your prospective client is unlikely to sign up. They are unlikely to become a long-term revenue stream for you.

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