Pages

Jerusalem – biblical ecocentre or thriving economy?

20 August 2014
1 Comment
Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Mention Jerusalem to an outsider and they will often associate the city with the bible, modern day conflict and religious tourism. All very true, but there is another totally different side to this Holy City. As demonstrated at the first annual conference of the Jerusalem Business Networking Forum (JBNF), Israel’s capital possesses a nucleus of new technology that is already making an impact around the globe.

At a time when Israel’s overall growth is slowing down and the war with Hamas is having a dire effect on small businesses, Jerusalem is managing to take a lead in a more positive direction. Just taking the first seven months of 2014, there are at least 122 new start ups. Consider Orcam that received US$15m from Intel to perfect glasses for the blind and severely visually impaired. At the other end of the spectrum, Mobileye’s recent IPO on the New York Stock Exchange raised over US$1 billion, the largest ever for an Israeli company.

The JBNF conference summarised the ten or so incubators, hubs, and accelerators  that have sprung up, each with its own niche community: women, young entrepreneurs, Arab, ultra orthodox, and plain boring ‘mixed’. For example, Shaindy
Babad, director of Temech, announced the opening of an incubator for observant women. Ziv Barcesat, presented Yerushalab, a community centre for artisans in Musrara neighbourhood, with their own 3D printers. The list is too extensive to present here in detail.

Hanan Brand, from Jerusalem Venture Capital and which specialises in new media, observed that the level of known funding of Jerusalem-based startups has almost tripled in as many years; from US$45m in 2012 to US$110 million in 2013, and now has already reached US$122m for 36 start-ups in the first 8 months of 2014.

The Jerusalem Development Authority (official sponsors of the conference) via BioJerusalem is deliberately targeting the pharma sector. It is estimated that 50% of the start ups can be found in the field of biotech and nanotech. Marx Biotechnology and NDT Ultrasonics are two fine examples of this entrepreneurial trend featuring disruptive technologies.

Where to next?

Evidently, Jerusalem has moved on since the days of the prophets, the siege of 1948 and even the Intifada of 2000. Mobileye can be mentioned in the same breath as Glide, Revelator, Brainsway and many more whose Jerusalem-based technologies can be seen on the mobile phones of tens of millions, promoting the pop music as countless talented artists and enhancing the health of the previously untreatable. It is time for the world to welcome the Jerusalem economy.

The tragedy of Gaza’s dual economy

10 August 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

On either side of the Gaza-Israel divide, hundreds of thousands have fled their homes. That means countless livelihoods destroyed or close to ruins.

Because of the greater loss of life and larger physical destruction, the focus has been on the Gaza side. After all, in recent years Israel’s high tech economy has seen it become a member of the OECD and enter the top rung of stock exchange indexes. And by this reasoning, the harm done towards Israelis has a lower social value to news followers overseas.

Read any economic report on Gaza since 2000, when Chairman Arafat launched the Intifada, and there is very little positive information. That ranks in stark contrast to the three previous decades, when the World Bank estimated that under Israeli rule real annual average GDP growth was around 5.5% .

Today, unemployment is in the tens of percents. The border with Egypt has been sealed shut for nearly a year, and around 95% of the smuggling tunnels have been destroyed. On the Israeli side, hundreds of trucks still deliver provisions daily, even during the war, as many locals depend on food hand-outs.  It is an accepted fact that by mid summer 2014, the Hamas junta was bankrupt and could not even pay its supporters. (It should be pointed out although most factories were barely operating, the military underground complex continued to be funded and extended).

There are those who argue that Gaza can return to its better days, especially by leaning on the Egyptian economy. What people forget too readily is that up to 1967, Egypt ensured that Sinai and Gaza had remained a pathetic economic backwater. The irony is that the World Bank has confirmed that the main commercial boom for Gaza in the past century emerged during Israeli governance after 1967.

However, for one strong minority, this analysis is irrelevant. Since 2007, a nouveau elite has come to the forefront in the Gaza Strip, as described by the BBC. For the all the squalor, a Pan-Arab newspaper, estimated that there were around 600 millionaires in the area.

Many of the party and military elite are rumoured to live in the Rimal district. There you can find the Palestinian Presidential Palace, the Governor’s Palace, the Gaza Mall, the Roots Club (frequented by most overseas journalists), and the United Nations beach club. Interestingly, the quarter also hosts the Al-Shifa hospital, which is considered the HQ of Hamas military operations. It is nearby that the Prime Minister of Gaza, Ismail Haniyeh, purchased his four million dollar home in 2010.

Rimal has not escaped the attacks of the Israeli air force. For example, one assumes that Haniyeh has now sought the help of the local insurance companies for what happened to his own property. There again, one wonders just how many times the area needed to be targeted, assuming that Hamas was not readily prepared to use this specific community as a cover to launch Kassams.

I have previously cited Doron Peskin from Infoprod. For Peskin, Raed Al-Atar symbolises this new group of Gazan yuppies. Today, Al-Atar is head of the southern command of the Hamas military wing. This gives him direct control over the tunnels going out towards Egypt – there were probably over 1,000 at heir peak, creating annual revenues estimated between three and nine billion dollars. Somewhat unsurprisingly, given his biography on Wikipedia, Al-Atar would make an excellent occupant of Broadmoor or Alcatraz.

It was through these tunnels that new cars entered the district and the fashionable shops of Rimal could be stocked. Peskin estimates that this micro-economy was controlled by between 600 to 1,200 cohorts. I assume that many of these people have ensured that they have remained hidden away from the war in the underground labyrinths built for them………..by underage slave labour.

I live in Israel. I see my commercial clients cry, as the war dampens local sales. And from my comfortable chair, I read the reports of the suffering of 1.5 million people in Gaza, where a military oligarchy has invested billions in violence and hatred rather than in its own people. And that is the tragedy of the two economies of Gaza.

What Israeli society just does not get

7 August 2014
No comments
Categories: Afternoon Tea in Jerusalem, Israel, Palestinian Society, Palestinians

Yes, the overwhelming majority of Israelis have supported the war in Gaza. Even bastions of opposition to government policies in the West Bank, such as internationally celebrated author Amos Oz, gave an unequivocal thumbs up.

And yes, Israelis do not understand why they have annoyed many of the world’s diplomats and politicians, who reject such actions. Can the two views be justified?

On the one hand, hundreds of lethal rockets have been lobbied callously into Israel every year from Gaza, and the world kept silent. The Hamas fire prior to Israel’s response had yet again turned tens of thousands into refugees. Using aid given as charity, Hamas has dug dozens of threatening tunnels under the homes of kibbutzim and other civilians. This netherworld has been furnished with weapons, chloroform, and even motorbikes – all to be used to kill, kidnap and maim – yet that is seen as a casus belli by Israel’s opponents.

However, when Hamas broke a UN-sponsored ceasefire last Friday with a murderous and premeditated act, the primary concern of Philip Hammond, the British Foreign Minister, was the plight of the poor Palestinians as opposed to Israelis blown to pieces (literally). Israeli society just does not get it. As I quipped previously on Facebook, the world appears interested in peace in Gaza – fair enough – but few are concerned about peace for Israelis.

Moving forwards and now that the fighting has ceased (for the moment), are neutral observers that interested why and how Israel believes that it went above and beyond the letter of international law in order to protect innocents during the fighting? The points below are not extensive, but I was warned how they might be interpreted as repetitive and even patronizing.

And so the list goes on. Israel can justifiably pat itself on the back for its past achievements. Israel in 1948 was a country of refugees and today is a member of the OECD. Gazans consider themselves to be refugees, yet their rulers invest in teaching hatred and destruction, a tasteless recipe for poverty. Hamas main building project has been the construction of tunnels to attack and then murder its neighbours.

And yet most of Israel’s 8 million citizens do not understand why the neutral observer and many world leaders do not buy into their arguments. How else, they cry, can you defend yourself against Hamas, dedicated to the violent destruction of a Jewish-based democracy, protected by human shields?

This international rejection was driven home on Sunday. When it seemed that Israel had bombed a school and killed children, the international media rushed to cajole global leaders into condemning the Israeli military……..even though much of the story is turning out to be a sick and cynical hoax!

Similarly, in an interview on Channel 4, seasoned British reporter Jon Snow repeatedly challenged the Israeli ambassador to the UK as to when the killings will stop. The denigrating implication is that Israel is responsible for the deaths. What Mr Snow managed to forget was that Hamas had flagrantly broken six ceasefires.

And during the conflict, Israeli newspapers observed how ‘the neutrals’ have responded to news elsewhere in the world.  Planes have been downed around the globe; ancient Christian communities have been wiped out; ISIS slaughtered children in Iraq; a few more thousand Syrians have perished, as thousands of others face torture. These are terrible acts, but the world, the UN and Ban Ki Moon have not been forced to move too far out of their comfort zone…. except when it comes to Gaza.

In an interesting anecdote on Al-Jazeera television, Israel’s Minister of Economics was interviewed. He explained that it comes down to: “Do I let Hamas kill my mother or do I take pre-emptive action?”. What characterizes this conflict from Syria and others is that Israel has fought back, without waiting for permission. And it is this proficiency that acts as an embarrassing projector on the inabilities of Hammond, Moon et al.

I offer that Israeli society should learn to accept that neutrals are not anti-Israel, yet they are driven by two intertwined considerations, which count against the Jewish State.

First, when the world sees pictures on destruction on their TV screens, the revulsion about tunnels and rockets and the facts of Hamas using human shields all become redundant. Blown up buildings imply de facto that Israel has not reacted ‘proportionally’. Such images do not appeal to a sense of fair play. In England, it is not cricket.

(For the record, it must be stated that many homes were destroyed and innocents lost their lives. This is not the place to drown in an argument over stats. However, it must also be stressed that Hamas fought the war in built up areas, as per their manual.)

So what is allowed, proportionally? Apparently 2 million poor Gazans can attack 8 million Israelis. Or as Rabbi Ari Kahn observed, Israel was encouraged to release over 1,000 Palestinians in return for Gilad Shalit. And David Miliband, leader of the British socialists, argues that Israel has his backing to defend itself, so long as Gaza is not attacked, whatever that may mean.

The true disconnect of the proportionality debate is that it is designed to force Israel to accept current UN standards, which demand …..… inaction. Proportionality is a baseless and malicious argument because its proponents fail to explain what Israel can do to ensure Hamas ceases to launch rockets from built up citizen areas. (And yes, that is a war crime in itself, yet ignored).

The other consideration about neutrals brings me to an interesting discussion on CNN led by Wolf Blitzer, who asked why the international media seem to target Israel. The BBC is a great example. (For the record, It is estimated that over 700 journalists form 42 countries entered Israel to cover the war, doubling the current high entourage.)

The CNN panel concluded that the ‘world expects more or better’ from Israel.  Enough said, no?

No! Better than what? Than Hamas? Of course not, because there are no expectations about those naughty people. OK. Better than how the West has performed in the Middle East? Well, a thousand kids have been killed in Afghanistan so far in 2014.  Or more moral than South Africa, whose countryperson is the UN High Commissioner for Human Rights.?  There, the abomination of rape is now an accepted instance of life, and commonly practiced by the teaching profession.

Israelis are livid. There is mounting evidence that Hamas bludgeons reporters into silence. Witness the features from Italian and other correspondents. So-called massacres in Sejaiyah have been miserably misreported. Networks like the BBC so rarely show Hamas soldiers in uniform. France24 has taken off its website a video showing the launch of a Kassam missile from the al-Shifa hospital, where the Hamas high command is encamped.

I think that the phrase ‘expecting more’ has the same function as ‘proportionality’. It is a polite way for the world to ask Israel to shut up. Politicians, diplomats, intellects and journalists around the globe are demanding that Israel does not force them to analyse some their own moral inadequacies.

So maybe I started out from the wrong premise. It is not really a case of what Israeli society does not understand about the world. More poignantly, it is time to consider what the world does not want to comprehend about Gaza. Just because Hamas operates with halo of the underdog, the biblical David,  that in itself does not automatically mean it has ‘right’ on its side

In effect what Israel has done in the past three weeks is to force the so-called leaders of the world to ask what they would have done if they had been in her shoes. And that change in the way of thinking, just like many other changes in life, is very difficult to accept. And the consequences of that new opening are not too easy to digest.

Over 30 years in Israel, but this Gaza war………

30 July 2014
No comments
Categories: Afternoon Tea in Jerusalem, Israel, Jerusalem, Palestinians

I have been living in Israel since 1982. I write about Israeli society and the economy. For all the battles and bloodshed, I never seen a war like this one in Gaza.

I live in a country, where nobody agrees on anything. Nearly 80% Jewish, there is an old Yiddish joke – in a conversation with 2 Jews, there will be 3 opinions. There are frequently demonstrations against government policies – any government, on any policy. Even now, the army has called the fight with Hamas “Operation Protective Edge” while the Israeli media labels it a war.

But this war…….Surveys reveal that 90% of the public supports it fully. Talk to just about anyone and they are saying the same thing. Despite the heavy price of soldiers’ lives, the hit on the economy, the roaring uncertainty of Kassam missiles, Israelis are in favour (for now) of continuing the fight.

In over three decades, I have never seen such a commitment to unity and for so long. What has changed? How can this be explained to an outsider, who is primarily exposed to the harrowing pictures from CNN, BBC and SKY?

Israelis do not ignore the fact that Gaza is such a tiny strip of sand. I have read off-line witness accounts from journalists, and I am sure they are not exaggerating about the amount of destruction left after the fighting. The near constant Israeli gunfire must be horrendous to live with. Whatever the numbers, and we know they are exaggerated, even one innocent killed is one too many.

So what is it that unifies the Israeli consensus? Why does Israel, which sends aid to the Philippines, Haiti and to elsewhere, find itself going to war? Why should this country sacrifice tens of its best youngsters in the army? Why does my client plead in front of his bank manager as clientele are staying at home, yet he is in favour of the war?

Please understand that the answer does not lie in some hatred of Palestinians. I long for the days when I used to buy in Bethlehem. Neither is it because of some subconscious militaristic drive in Israelis. Our neighbourhood alone is replete with parents petrified about what is happening to their beloved ones at the front. And while I am no big fan of our Prime Minister, I refuse to accept the pathetic accusations how he has launched a personal crusade for future glory.

Four very obvious buttons have been pressed at once, which the mega media channels, Ms S Gomez, Mr M Ali, Ms P Cruz  and other celebs prefer to ignore, for all their state of politically correct ignorance

First – Hamas war crimes will no longer be accepted by Israel: Since Israel left Gaza in 2005, Hamas and its allies have launched thousands of rockets against civilian populations centres in Israel. If the US, UK et al can send troops to Afghanistan and Iraq, Israel has a right to defend itself militarily, and that includes from within Gaza.

To put it bluntly, Hamas built a network of tunnels, deep into Israel, designed to attack, maim, kill, kidnap and destroy. Which country in the world would accept that from a neighbour without a military response? No more.

Second – Israel is refuting and rejecting actively the inhumanity of Hamas: It was the shouting antics of Condeleezza Rice, who twisted Israel’s arm to withdraw from Gaza. In turn, Hamas threw out Fatah a year later. UNRWA schools, funded by Western taxpayers have become military establishments, which teach hatred. Having rejected at least 5 ceasefires, Hamas armaments are killing their own children. It slays opponents without due recourse to law. Hamas admits to exploiting human shields. Israel is saying a big NO to this way of life, both in a military manner and, in parallel, by providing medical supplies to Gazans.

Third –  Israel is no longer prepared to accept the malicious rhetoric of Hamas. The proponents of Hamas argue that the inhabitants are densely caged into a narrow strip of land. Yet, every day including during the war, hundreds of trucks cross into Gaza from Israel. It is the border with Egypt that is sealed hermetically. And anyway, the wealthy yet tiny Singapore is far more congested. It is clear that Hamas has attacked and will continue to attack for reasons of pure hatred.

Fourth, and potentially the straw that broke the camel’s back, Israel has watched as the West has repeatedly failed to keep moral commitments. In 2014 alone, tens of thousands have died in Syria, Iraq and elsewhere. Compared to the diplomatic noise over Gaza, politicians and civil servants have been pathetically inactive. Even while Israel has been forced to destroy the military prowess of Hamas, the 60,000 ancient Christian community in Mosul, Iraq, has been wiped out.

Take all of these points together and you can understand why Israelis, even though the government has accepted ceasefires, are very wary of laying down their weapons so quickly. For example, the Druze commander of the Golani brigade, which has seen some of the worst fighting, was injured yet publicly announced his determination to return to the frontline a.s.a.p..

And while we are talking about it, what is a humanitarian ceasefire, as opposed to any other truce? And If Hamas are so worried about its people, why has it not stopped fighting long ago?

This war started back in early July. The 4th of July is noted in Israel to recall the Entebbe raid of 1976. An elite Israeli crack unit rescued those stranded in Africa because of their religion, their nationality. Led by Yoni Netanyahu, Bibi’s brother and the only fatality during the action, Yoni famously addressed his troops before departing. “If we do not do this, nobody else will”.

Let me repeat that: “If we do not do this – get rid of those tunnels, rockets, hate –  nobody else will”. Thanks to Hamas, this Gaza war has never made the Israeli public so united in decades.

Gaza and Israel – the economies after the war

25 July 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

Call it a war or an operation. Support whichever side you want. What cannot be denied is that the lives of hundreds of thousands of people on both sides of the Gaza-Israel divide have been shattered.

In Gaza, one estimate is that barely 100,000 people had employment with a regular salary. As most of that was in the government sector, the number could be about to drop sharply. Today, whole neighbourhoods are deserted.  700 hundred have died to date and around 5,000 are wounded. (To give that some perspective, approximately half those numbers are assumed to be men in arms. And in Syria, this week,  700 were slaughtered in two days.)

France, the USA, the UK, the UAE and others have all promised initial aid for Gaza. However, something more substantial will be needed.

Over in Israel, the international press cannot (thankfully) report such casualty figures. And yet, for years around 1.5 million people in the south of the country have lived in daily fear of their lives from Kassam rockets. Understandably, yet again, many have fled northwards this July. Reports from the retail sector and other businesses in these districts report a 30% drop in revenues. Tourism across the country is also down by around 30%. At least four significant offerings planned by Israeli companies on the USA stock markets have been postponed. And now that 50,000 reservists have been called up, small businesses are bound to suffer.

There are some bright spots. The Israeli shekel has actually improved its position against other leading currencies. The Tel Aviv Stock Exchange has hauled back the sharp losses felt at the start of the battles. The Bank of Israel has described the economy overall as “resilient“.

In Gaza, there is not too much hope. The Hamas economy was dependent to the tune of billions on smuggling tunnels, which Egypt had blocked months ago. Daily aid still comes through from Israel. The private wealth and homes of Khaled Mishaal, Haniyeh and other leaders has not been obviously touched, while the average citizen has to wait for a new dawn.

Moving forward, historically Israel’s economy has tended to emerge from wars in an improved position. Simply put, the pick up afterwards helps to generate a mini boom. And the IMF deputy spokesman William Murray explained how he expects this phenomenon to continue: “However, we need to make clear that once the conflict ends, we expect growth in Israel to rebound relatively quickly”.

Meanwhile, the Hamas has already made it perfectly clear that it expects to be bailed out by the international community. In a fascinating comparison, CNBC financial news summarized that:

Just since 2001, Israel’s GDP has grown 1,000 percent and its economy is now larger than Egypt’s economy despite the fact that Egypt has 10 times Israel’s population. At the same time, the Palestinian Authority and Hamas have received billions of dollars in foreign aid and support. But instead of joining in Israel’s modern economic boom and encouraging partnerships, the political leaders have clearly invested in rocket launchers and terror tunnels instead.

Where to now, especially for Gaza? They cannot blame the so-called Israeli blockade, because goods come through, yet not from Egypt. They cannot complain about the density of the population, because places like Singapore have shown how this can be turned to an advantage.

I was struck by three developments this week, which possibly indicate how the respective governments will seek to look after their peoples after the guns have stopped firing. As noted by the Ma’an news agency, the Israeli army set up a field hospital in Gaza to treat the wounded. Further north in Jerusalem, a brand new centre was opened to treat people with Alzheimer’s, whatever their ethnic background. Third, no such equivalent initiatives could be found from the leaders of Gaza.

 

Seeing it through – the benefits of mentoring

23 July 2014
No comments
Categories: Afternoon Tea in Jerusalem, Israel, Jerusalem

My posts recently have reflected on the economic absurdities of the Hamas war with Israel. Yet while battles are fought, sectors of the population try to carry on with their business.

Somebody called this isolating or ‘compartmentalising’ issues. Maybe. It is certainly about self control.

A blog by Annie Pilon considered how this can characteristic can be a critical factor in driving towards commercial success. Amongst her tips, she stressed the importance of achievable goals and – one of my favourites – sticking to proper eating diets. Pilon also referred to recognising one’s limits.

I disagree with the emphasis of  last point. Instead, I believe that we should concentrate on our strengths to carry us through. And here is what I mean.

This week, I completed a contract with a small client in the Jerusalem area, as she tries to build up a small business with minimal resources. Unprompted, as we were saying our goodbye, she blurted out; –

You see the good in people. You articulate it and thus allow them to get ahead.

I hope, dear reader, that you forgive the immodesty here. However, my point is that we all have core strong skills that are sometimes buried amongst mounds of self doubt or other subconscious factors. Mentoring and coaching help you see the way through to your vision.

 

What is the cost-benefit of building a tunnel?

21 July 2014
4 Comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinian Society

An outsider looking in on the Middle East must be wondering why Israel and Hamas are fighting a war over a series of tunnels. After all, if Gaza is so poor, as its supporters maintain, how could they afford to build such a network?

It is an open secret that for at least a decade how the tunnel economy has funded Hamas, even before it came to power. Before Egypt shut down the Sinai side of the operations last year and sealed up its side of the border, it is estimated that via taxes and sales the trade was valued in billions for the Hamas exchequer.

So how much does it cost to build a tunnel?

I have already cited Doron Peskin last week. Yesterday, writing in Hebrew, he estimated that one meter costs about US$200, and tunneling work can achieve about 20 meters per day. The cement used to be smuggled through from Egypt. More recently, it has come in ‘regular’ lorry-loads via Israel. Since 2011, Qatar has replaced Iran as the prime paymaster.

Israeli reserve Col.Miri Eisen – former deputy head of IDF’s combat intelligence corps and former assistant to the director of Military intelligence, commented in an interview: –

It is a lucrative economic job in the Hamas. It is their top-tier unit, which is called the tunneling unit. They have put an enormous amount of money when they saw that the tunneling itself was something which Israel has intelligence challenges in finding the tunnels themselves while they’re building them. They put an immense amount of money and effort. They put the best into the tunneling units. They’ve built tunnels from the Gaza Strip into Israel that are a mile, a mile and a half, a mile and 800…I mean incredibly long tunnels and we’re not talking about a little mole tunnel which is dug and a person goes through like in [Shawshank] Redemption… We are talking about tunnels that are done in the tunneling mode, the way you would build nowadays trains, roads, anything that goes underground into a mountain. They are tunneling out, they are using their money, their capabilities, with little Caterpillar tractors that go in and dig out the dirt, covering it with an enormous amount of cement, and you’re all aware of the issue of cement going into the Gaza Strip.

However, in economics, for every cost, there is an alternative cost. In other words, if you can spend on X, that means you did not invest in Y. And therefore, those needed the benefits of Y lose out.

I have no idea how many tunnels exist in Gaza or how long they are. The IDF claims that it has already found 13. So, let’s assume conservatively there are only 20 in total and each one is 2 kilometers long. By my wobbly maths, that is close to a US$100m investment. The alternatives?

Point 1: 13 tunnels may have been found so far. There is no record of a one public bomb shelter being discovered in Gaza. In contrast, history has forced Israel to build one in every one of its homes in order to protect its citizens.

Point 2: BBC journalists and others decry the lack of medical services in Gaza. Now this is compounded by Hamas fighters using ambulances for transport. On the other hand, how is it possible that Israel has managed to establish a field hospital for Gazan citizens during the battles (as it has done for Syrians), while Hamas officialdom is nowhere in sight?

Point 3: Hamas relies on UNRWA to provide a schooling system. And yet the facilities are abused to store weapons. (I understand that UNRWA has since returned the equipment to the government)

The war could have been avoided. As Egypt’s foreign minister said last week: “Had Hamas accepted the Egyptian (ceasefire) proposal, it could have saved the lives of at least 40 Palestinians.”

The pathetic reality is that while Hamas leaders are safely closeted in the tunnels that they have erected for their own means, far more than 40 lives have been lost. The true cost of the Gaza tunnel network, for both sides of the diplomatic divide, has to be measured in terms of emotional loss, a horribly unnecessary evil.

The economics of the Gaza-Israel fighting – Part 2

14 July 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

Two days ago, I questioned  what would have happened if Hamas had invested its capital from the tunnel economy in human resources and social infrastructure rather than in military might. Where would the Gaza economy stand today and would Hamas still thus feel the need to support the frightening cycle of violence?

By way of a follow up, I spied two headlines almost side-by-side in yesterday’s newspaper. The first questioned how Israel will find the money to pay for the additional costs of war. This is expected to top 3 billion shekels or close to a billion dollars. By way of comparison, the annual budget of the Ministry of Defense, the heaviest in the country, already stands at 51 billion shekels.

Now we know that Israel is no longer a third world country. Outside the EU and America, it is one of the UK’s leading trading partners. Many of the world’s high-tech leaders, such as HP and Microsoft, have set up r&d centres in the Holy Land. The Prime Minister, Netanyahu, owns properties in Jerusalem and in Caesarea.

Compare that to the second article, which considered the growing riches of the Hamas leadership. Proportionally, it appears that the Palestinian Prime Minister in Gaza, Ismail Haniyeh, can match the largess of his Israeli counterpart. Back in 2010, Haniyeh purchased a 2,500 sq meter property for around 4 million dollars.

It is not that I am trying to preach a stringent form of Communism. However, we are talking here about Haniyeh, who claims that Gaza is a financial backwater that demands Western taxpayers to support his flagging economy. Haniyeh practices his Islamic religion on his sleeve, branding himself as a man of modest means. And Haniyeh is one of the key leaders of Hamas, which ousted the corrupt fatcats of Fatah from Gaza.

I detect a whiff of deceitful disconnect. You may call it the triumphal return of the pigs from Animal Farm.

For several years, there has been a growing amount of evidence that the Gaza economy can only be explained in a bipolar manner; the poor who have remained desperately poor and the nouveau riche, many of whom have ties with Hamas. There are now hundreds of millionaires in the Gaza Strip. Palestinian commentators have long looked at “the new class of rich“. New cars have been readily available, at least while Egypt kept the tunnels open.

It appears that Haniyeh is not alone in benefitting from the poverty of his electorate. Khaled Mashal is thought to have stashed away over US2.5 billion, according to Egyptian analyst, Dr Ahmed Karima. Chairman Arafat was no friend of Hamas, but the fundamentalists have clearly studied his financial techniques. Arafat took his fortune with him to the grave, and I suspect that the Hamas leaders are also not interested in sharing their gains with their constituency.

The Gabble from Gaza focuses on the numbers of rockets launched or how many people are displaced. Both, from whatever side of the border you come from, are a tragedy. The truth is that not far behind the bloody headlines are pecuniary considerations and personal interests that Hamas is bound to protect, even at the cost of the suffering of its own people.

The economics of the Gaza-Israel fighting

13 July 2014
2 Comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

As Israel and Hamas slug it out yet again and as thousands are traumatised, killed, displaced, it strikes me how these two tiny bits of land can afford to keep bombing each other? Together, they are barely bigger than the size of Wales, either in land mass or numbers of inhabitants.

The question is particularly pertinent because resonating through the ‘Gaza Gabble” is one Palestinian argument that repeats itself; Israel’s response is disproportionate. (For the record, when discussing causes of war years ago in school, I do not recall anybody in history saying “we will not fight them because they might retaliate heavily and that would be awfully unfair). So, what allows Hamas to join the fight with Israel?

As I have repeatedly pointed out, until the onset of the Intifada in 2000, the World Bank identified the Palestinian economy under Israeli supervision as one of the fastest growing global economies over three decades. Once Hamas had secured its regime by 2007 and thrown out the former Fatah corrupt figures, the Gaza economy slowly began to make up some lost ground.

The previous economic infrastructure, such as greenhouses abandoned by Israel, was rejected. Instead, the focus was on the underground economy, literally. According to Doron Peskin from Info-Prod and quoted in the Hebrew paper “The Calcalist”, the contraband tunnel economy was worth around US$200m per month for the Hamas treasury. Jazeera says US$700m a year. Peskin cites an Egyptian source that estimates the sums at 9 billion dollars annually!

Either way, this is certainly enough to pay for 15,000 Hamas fighters, finance new shopping malls, encourage the import of luxury items, and see hundreds on new millionaires. Maybe only a top elite could afford this new economy. However, factor in how the cement is provided for free by Israel, and it is not difficult to understand how Hamas could afford to invest in factories that manufacture thousands of missiles that are then lobbed in to and all over the Holy Land.

For the record, Peskin believes these production lines are not very sophisticated, especially as the missiles are not smart devices. (After all, they have also landed in Bethlehem, Hebron and the outskirts of Ramallah). They cost about US$500 each. Accordingly, smugglers may demand about ten times that for an anti-aircraft Sam trajectory.

Last year, the new Egyptian ruler, Sisi, shut down the tunnel economy, flat and simple. Despite the severe financial hardships and even though the Sinai border is now also closed, Hamas does not attack Egypt. This leaves it with a problem – to find a way to pay for its 50,00 employees.

On the other side of the border, the Israeli economy is very proud of its achievements since 1986. Then bankrupt and suffering from hyper-inflation, today the country is a member of the OECD and has a first class stock exchange. Annual growth has rarely dipped below 3% since 2001.

Israel’s exports are led by the world of high-tech (eg Intel), diamonds, and military technology. And as the country has invested in these areas, it has found the resources (just) to create bomb shelters for much of the country and hospitals for most people. The electricity plant in Ashkelon also supplies Gaza, as could the new desalination plant, although both are currently under attack from Kassam.

Undoubtedly, the fragile Gaza economy is taking a hammering. It is still dependent on supplies from Israel, which keep coming despite the hostilities. Back in Israel, the commercial sector continues as best it can, and much depends on proximity to the Kassam launch pads. The stock market, which dropped initially, has rebounded. The shekel is fairly steady. Over the past decade of military campaigns, it has been the small business sector  that has suffered, as owners have been called up to the reserves.

So my question is this? If Hamas had invested its capital in human resources and social infrastructure, as its neighbour has done, where would the Gaza economy stand today and would it need to support this frightening cycle of violence?

Human suffering in Gaza, and elsewhere?

11 July 2014
No comments
Categories: Afternoon Tea in Jerusalem, Israel, Jerusalem, Palestinians

The current bout of fighting between Israel and Gaza raises old issues of the economic poverty amongst the Palestinians.

And now this week’s bombing, which has resulted in tens of lost lives, makes it easy for outside news agencies to highlight these woes. Sky TV has reported the suffering from a local hospital. The BBC has shown ample footage of the wounded being carried around and other collateral damage. The NGOs are have issued a string of complaints regarding Israel’s actions.

Also this week, at least 50 bodies were found in Iraq. The UN reported that civilian casualties in Afghanistan are up 17%. And the Ebola epidemic in Africa is slaying hundreds. So, if these issues barely rank a mention amongst the educated world media, I begun to wonder if the ‘gabble from Gaza’ had also succeeded in hiding a secondary level of suffering far closer to home.

However good reporters are, we know that they cannot portray a complete story in a two and a half minute clip. Sky omitted to mention that Gaza children continue to be accepted and treated in Israeli hospitals. The BBC has been forced to admit that in its rush to put out stories, facts have become distorted in places. And not for the first time, the NGOs have accepted the sanctimonious rhetoric of the ‘underdog’ in their rush to condemn Israel without due concern for the facts. Again, is there another story?

Lets us accept for now the stats of the Palestinian Ministry of Health that tens have been killed, including women and children. It is not clear to me, how they died.  Do these same figures include Hamas soldiers killed in their own tunnels or taken out by Israeli gunfire? As for the bombings, by whom? It is known fact that up to a third of all Kassam rockets do not make it out of Gaza, falling back on the same population that launched them.  Is that not a crime against humanity?

Next, if the population of Gaza is around 3 million, there are just over 8 million in Israel, of which about 75% is Jewish. Now, the improved Kassam missiles can reach about 80% of the population in the Holy Land. Actually, one landed last night in Beitunia, close to the house of President Abbas!

This means that by attacking Israel, Hamas is waging war against nearly three times the numbers of people in its own territory, highly disproportionate. (And these people have between 15 to 90 seconds to take cover before the rocket lands.) Further, as Hamas leaders boast, the Kassams are directed at civilians, where as Israel is aiming at military targets. Another crime that the International Court of Justice prefers to ignore?

As I wrote last week, Gaza is suffering. While Hamas invested in a large underground (literally) military infrastructure, the leadership has lacked the money to pay its own followers. Resources have been channeled into weapons that kill rather than towards the creation and protection of life. If a different path had been chosen, then

Palestinian firms could be natural partners for Israeli companies – and others – looking to export to the larger Arab markets, notably Saudi Arabia, Egypt and Iraq. The nascent Palestinian technology sector would find an experienced and willing partner in next-door Israel, with its highly developed technology industry. Israeli venture capital firms could provide much-needed financing, support, and know-how to export-oriented Palestinian entrepreneurs.

Hamas has chosen a separate path, wrecking havoc on everyone, starting with its own. This is not a story about fighting in Gaza. This is a war inflicted on civilians of all religions by an Islamic leadership whose human values are deformed, putrid and vile.

The fact that the greater media refuses or is unable to recognise this wider picture concerns me. Ben Cohen has written how the Palestinians have hijacked the language of Auschwitz “to maintain their position in the Western conscience as the world’s most downtrodden nation“. Howard Jacobson observes that Israel’s critics have adopted the language of anti-semites without even realizing it. He defines this as the “gradual habituation to the language of loathing. Passed from the culpable to the unwary and back again. And soon, before you know it…….”

Gaza is suffering? Yes, and because of Hamas. And that misery is passed on in disproportional numbers to its neighbours. If only the Palestinians had a leadership that genuinely cared about human morals. And the world press has a duty to all to find a way to convey that message.

Can the IMF alone find economic relief for Gaza?

5 July 2014
1 Comment
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

The past week has seen heightened violence between Gaza and Israel. While the timing seems odd, in parallel, the IMF issued its latest survey of the economy under Hamas rule in the territory. Summarising the conclusion, Israel is responsible for a situation of high unemployment and stunted growth.

You cannot fault the logic. Israel does not let workers from Gaza come into Israel. The traffic of goods between the two is carefully monitored. Ergo, Israel is to blame for the demise of the Gaza economy, no?

I did wonder if the IMF wrote similar things about Afghanistan or Iraq – withdraw the troops, which seek to protect the peace, and the economy will boom (sic?).

Leaving sarcasm to one side, jump back a few years and recall how Hamas started out. It was a neighbourhood organisation that provided social services to the poor. It deliberately fed on the nepotism and corruption of the Fatah strongmen led by Mohammed Dahlan. When Hamas violently ousted Fatah from Gaza nearly a decade ago, there was little crying amongst the locals.

Initially, the Hamas economy prospered. While the commercially successful greenhouses left by Israel became military training bases. Gaza thrived via the tunnel economy. Hamas built them, controlled the contraband, and ran the finances as taught by ‘Professor Al Capone’. Shopping malls opened. Car imports soared. Unemployment began to drop.

So why in July 2014 is Hamas apparently so interested in a fight with Israel? I understand that until Thursday, most of the shelling from Gaza towards Israel came from more fanatical groups like the Islamic Jihad factions.

First, remember that President Sisi of Egypt has spent a year closing down the Sinai entrances to the tunnels. If there were around 300 operating at the time of former President Morsi, today barely a dozen are left. There goes the tax collection.

Power supplies, 30% of which comes via Egypt and much of the rest was financed by Qatar. Well, the money from the Gulf ran out some time ago. This week, the region was almost plunged into darkness before President Abbas assured Israel that it would be paid for new fuel supplies.

As for wages, there are reports that 50,000 Hamas workers have not been paid their salaries for about seven months. Given the size of the average family, that lack of liquidity probably impacts on about a third of the Gaza population.

It is difficult to argue that these financial restrictions apply to ‘those at the top’. Corruption and the siphoning off of foreign aid remains endemic. The granddaughter of the Hamas Prime Minister was treated in an Israeli hospital. There are estimated to be over 1,700 millionaires in the area.

So, it appears that the fizz has gone out of the Gaza economic dream. And this deeply restricts the ability of Hamas to care for the poor, its home constituency. When you factor in the growing influence of the Islamic Jihad and Salafists, what is left for the local leadership to do, but to attack Israel?

The Hamas military machine probably includes tens of thousands of trained soldiers. It is assessed that the arsenal contains tens of thousands of Kassam missiles. In other words, Hamas has invested singularly and heavily in military prowess as opposed to the development of human capital.

The IMF targeted Israel for Gaza’s economic woes. Yet have we not just found the missing billions that the IMF has failed to write about……………and why are these brilliant economists so quiet about it?

Look who is investing in Israel – June 2014

27 June 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

My daughter asked me the other day why the Presbyterian Church voted to divest from Israel. The question was pertinent when you think just who is coming to Israel at the moment.

  • On 19th June, the Hebrew paper “Calcalist” reported that Coca Cola will invest a further US$0.5 m in Israeli start ups. That will make about 10 young companies in total.
  • A few days later, the German specialty chemicals group Altana announced that it will take a minority stake in Landa Digital Printing to the value of US$135m.
  • Final, a rather anonymous company from Herzylia that ‘dabbles’ in algo-trading, is rumoured to be considering a buy out offer, valued at US$4 billion, give or take a dollar.
  • In the past six months, six Israeli companies have raised a combined US$500 million  in share offerings in America. Next to join the list will be Cyber-Ark looking to bring in US$75million.

In other words, at a commercial level, 99% of global commercial leaders are ignoring the calls of Presbyterians and their fellow thinkers.

In other walks of life, the pattern is similar. I mentioned earlier this month how Palestinian leaders take advantage of Israel’s medical services. To that commentary, I could add the story about the Palestinian child, treated in Tel Aviv, at the very time when Hamas had cruelly kidnapped three Israeli teenagers.

In the field of music, no BDS fuss blocked the brilliant appearance this month of the Rolling Stones in Tel Aviv. Hip-hop artist Epicc has just spent a week in the Holy Land and released a special clip to celebrate. Ceelo. Green, Neil Young, and Kylie Minogue are a few of the artists booked to feature over the summer months.

I did mention to my daughter that the Presbyterian Church had been hijacked by a powerful anti-semitic minority. We discussed the stupidity of the boycott; for example, HP has been targeted, because its hardware prints the permit entries for Palestinians coming into Israel. We noted that while Israel is the only democratic country in the Middle East, the Church had been deafeningly silent in its condemnation of abuses against Christians in the region.

However you cut it, once you remove the spin of the BDS movement, two items remain. First, its basic traits and demands and targets have disturbingly similarities with Nazi laws of the 1930s. Second, Israel’s drive towards globilisation remains unhalted, thus ironically ensuring that those who hate the country end up benefitting from its capabilities.

How Israel remains a ‘start-up nation’

19 June 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel

It is five since Dan Senor and Saul Singer described Israel as a ‘start-up nation’. They analysed how a desert tariff-based economy emerged from bankruptcy in 1986 to become a force on the high-tech scene.

Whether you put the factors down to better governance, improved access to global markets, the impact of ex-army types moving over to industry or otherwise, the question remains if this triumph can continue to repeat itself.

Yesterday, I visited Beersheba. It is nearly a two hour drive from Jerusalem. There are few good hotels. The area is known as where Abraham sojourned, and where the British passed through in 1917. Actually, despite being on the edge of the Negev the city is geographically almost placed in the centre of the country. So what?

In 2014, Beersheba will open an r&d centre, co-sponsored by Lockheed Martin and EMC. In parallel, CyberSpark will offer a new complex for the blossoming cyber industry in Israel. And separately, the Advanced Technologies Park was officially launched this year.

All very encouraging. However, what I saw yesterday on the Ben Gurion University campus in the heart of the city was even more impressive. Innovation 2014 was the fifth annual event of its kind. It was spread out over several buildings. Aside from keynote lectures by reps from IBM, Microsoft etc, there were several hundred presentations from students. Each stand represented another potential breakthrough in its specific field.

Here is just a preliminary list of examples:

  • Software to help decision-makers understand if an autistic child is suitable for a course.
  • Numerous solar powered applications
  • The ability to detect underwater threats
  • An app to help small businesses manage queue line
  • Robotic solutions for industry, operating rooms and more

The human sciences were not to be excluded. Projects were exhibited in the tourism, the branding of Bedouin villages, natural cosmetics companies located in the region, and much more. You left with the feeling that almost every other student has an idea and is determined to commercialise it, as soon as possible.

Years ago somebody commented to me that in America, students come up with an idea, stay in-house until they are ready, and then  start a company years later. As shown yesterday, blame the hot Middle Eastern sun if you want, the opposite is true in Israel. Israelis run almost irrationally to register their company.

It is arguable which is a better business model. In Israel, around 40% of new businesses do not make it to Year 5. That said, hindsight reveals that this is the approach that helped to launch the amazingly successful ‘start up’ anthem of Senor and Singer. It looks as if it will be around for some time to come.

Who kidnapped Israeli society?

17 June 2014
2 Comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem, Palestinians

Last week was a busy one, even by the bewildering standards of the Middle East. Sunni militants (ISIS) launched a violent offensive in Iraq against the government, slaughtering civilians who objected. America and the UK initiated a bizarre rapprochement with Iran. And on Thursday night, three Israeli teenagers were kidnapped, assumedly by Hamas supporters.

Measuring the posts of the international media, the Israeli story is the least important. In fact, SKY News believes that the key crisis in the Holy Land is not the immoral act of the kidnappers, but the inappropriate reaction of the Israeli authorities.

I believe that the reporters have missed a trick. If they were to focus on Israel, they will be able to appreciate with greater clarity what is happening around the oil wells in the sand dunes. Here’s what I mean.

1) Israel’s economy: Despite on-going geopolitical uncertainty, the economy grew by 2.7% in the first quarter of 2014.  And yes, that includes increasing trade between Israel and Palestinian firms.

2) Hightech: Israel’s start up economy has not stopped forging new links. Russian billionaire and owner of Chelsea FC Roman Abramovich has just invested $10 million in StoreDot, an Israeli startup developing electronics based on bio-organic materials. A Jerusalem-based company is (ironically?) developing an app to help prevent kidnapping. And CellBuddy is set to create a consumer revolution which should slash the prices of mobile phone calls.

3) Health care: The medical sector is short of cash, doctors, nurses and more. However, it must be doing something correct. Hundreds of Syrian civilians, wounded in the civil war, have been treated in Israeli hospitals. The granddaughter of the Hamas PM has been operated on in a Tel Aviv hospital. Even the wife of Palestinian President is now recuperating in a private clinic near Tel Aviv.

4) Tourism: Only yesterday, Masada, a World Heritage Centre in the desert, rocked to the sounds of La Traviata. Hundreds of tourists flew in especially for the event. Concurrently, the City of Jerusalem is running its annual Light Festival, which spectacularly winds its way around the different ethnic quarters of the Old City.

No country is perfect and that includes Israel. Yet, for all the threats surrounding it and for the morose horror of the kidnapping of the school children, Israel continues to thrive though a policy of inclusion and pluralism where possible. You have to ask: Why is this theme so hidden by the media giants?

The boys have disappeared, feared murdered, and their families are helpless. Unlike the poor girls in Nigeria, Michelle Obama has not published a post in support of the three missing religious Israeli teenagers. Catherine Ashton, EU foreign affair supremo, has yet to find time to comment on the matter.

And what else has been kidnapped? The openness and success of Israeli society, which should be promoted to serve as a light to the Iraqs and Irans of his world. Where has the world media hidden these triumphs and why?

Why 4 gentlemen need a business mentor

13 June 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Four gentlemen are walking around Jerusalem looking for a business mentor. It almost sounds like an opening line to a long joke.

The truth is the opposite. Over the past 6 weeks, I have become acquainted with four people from the Jerusalem area. I do not believe they know each other. They grew up on three different continents. Their social backgrounds reveal no obvious synergy. Academically, their skills range from the ultra brainy down to school drop out. Two are quiet types and two will not stop interrupting.

On the commercial front, they are all trying to set up in Israel for the first time, but again in four diverse fields; publishing, internet, trade and home services. Their prior experience ranges from decades down to months. If you were to put them all in a room together, you would come up with a list of talents several lines long.

So why have they sought out a business mentor? What is the common theme?

While chatting with one of these gentlemen earlier this week, I suddenly realised that there was a trait or characteristic that the four of them possessed in equal amounts. For all their vision, none of them allow themselves to focus on achieving their key ambitions. It is as if they deliberately try to sidetrack themselves.

Here is what I mean:

  • Adam (not his real name) looks to discuss grand theories of life, avoiding the specifics of his business.
  • Bryan talks of his competitors, and at length, but not about what he should be doing.
  • Colin comes up with new ideas, often good ones, at every meeting, but does not try to consolidate what he has achieved to date.
  • David likes to contemplate his next move, for hours, but rarely crosses over to the conversion side of this thought process.

And that is where classic business mentors can make the difference. They can break the mold of these patterns of behaviour, which may seem brilliant to the incumbent. It is the mentor who can bring them to understand and to internalise that these ‘business models’ only result in minimal income

It is the role of a business coach to show clients that something has to change and why. The question is whether these gentlemen or other people like them are up for that challenge.

 

The new economics of hailing a taxi

12 June 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel

Apps are supposed to improve the lives of people. The taxi protest in London, Paris, Madrid and Berlin yesterday against the success of  Uber seemed to have the opposite effect. The lives of millions were disrupted for hours.

I am not convinced that these demonstrations will lead to much. On Friday, Uber “revealed that its latest funding round had raised another $1.2bn (£700m) at a valuation of $17bn (£10bn), and its backers now range from Google to Fidelity Investments”. That is a lot of financial clout.

While Uber may be the largest player around, it faces competition. Besides Hallo, Lyft and My Taxi, the next largest is arguably Get Taxi from Israel. While Uber’s sales are estimated at about US$500 million,  the start up from the Holy Land rakes in about US100m. The founders of Get Taxi expect a fourfold growth by 2015.

Again, big bucks however you look at it. And Get Taxi is also looking to raise money, maybe on a valuation of US$3 billion.

What’s next. All the competitors will be looking to expand their reach, and Uber is already active in nearly 40 countries. There are also indications that the size of the taxi market is growing, as more people are able to play the role of ‘driver’. In turn, this should allow the consumer to benefit from better prices.

The joke is worth repeating. taxi drivers tried to disrupt lives of million, because their industry – protected from change for decades – is now forced to respond to a classic disruptive technology. Yeah for the software engineers of America and Israel.

3 tips for a successful business meeting

11 June 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel

We have all been there; sitting through minutes and hours – which seem like years – of time wasted in meetings, where the point of them has been…..well to put it politely, ‘difficult to discern’.

Yesterday, I attended 5 separate meetings. I ended two of them early, as we had accomplished all that needed to be said. Unfortunately, one session, ironically sprinkled with reps from leading areas of Israel’s commerce, left me bewildered. Why, after all these years, do people still not know how to behave in meetings so that they are efficient, effective and even fun.

It is some years since the British comedian, John Cleese, issued a series of videos, using humour to illustrate the problems of modern management. From a more sober angle, a blog on the Harvard Business Review this week argued “Yes, you can make meetings more productive.” Steve Jobs was renowned for ensuring that participants were reduced to a bare minimum.

For me, there are three key factors for ensuring that a meeting has great purpose.

First, the chairperson has to issue a firm agenda, preferably circulating it in advance

Second, participants must know what they want to obtain from the discussions. The contra of this is that the chairperson is left to do 90% of the talking and thus the meeting turns into a dialogue. Creativity is stifled.

Third, arguably the most important factor, time limits are critical. The chairperson should ensure that the meeting starts on time and that the meeting finishes by an hour agreed in advance. Otherwise, participants will know that they can arrive late  – in Israel this is know as “Jerusalem Mean Time” – and leave whenever they want to.

So,  why do we not learn? Why do we continue to waste countless minutes in our fast-paced lives in rooms filled with hot air?

In business, are you able to spy your vision?

2 June 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

The story of the twelve spies in the Bible is known to billions. Leaders of children of Israel were commanded to check out the promised land, ahead of their jubilant entry. Instead, they bought back false reports and the march forward towards Jericho was delayed 40 years.

Commentaries on the text are rich and varied. One of my favourites comes form Rabbi Ari Kahn, who explains how the Jewish princes wee  asked to “see”, not spy, what was in front of them. Personal fears and intrigues led them to cover up the truth. In modern parlance, the mission became a fact-finding expedition, where vision and purpose were thrown out of the back of the tents.

I was reminded of this story when I was sitting yesterday with a client of mine in a Jerusalem restaurant. She has a very pertinent disruptive technology in the field of clean energy. I am not sure if there exists a description for a typical entrepreneur, but she would not fit the ticket. Nevertheless, she has grouped together a team, has created a working prototype, and is about to set off for an expenses-paid trip to a multinational manufacturer.

Our lady in question showed me a response she had recently received from the Israeli subsidiary of a conglomerate, which is known to help entrepreneurs. In fact they have a special programme to empower start ups run by females. Almost word for word, the letter questioned how the company could get this lady of their backs. She was a pest that needed to be got rid of.

Blunt? Rude? Absolutely. Shortsighted? To be seen. However, while hurt, my clientesse, has been able to look at the situation very wisely. The letter has enabled her to recognise the strengths of what she has achieved to date. She is very determined as to what are her end goals. In parallel, she has been prompted to identify with greater clarity where her weaknesses lie.

With hindsight, what happened was that when she first examined the letter, she had been handed a mission. Was she motivated enough to see her vision while others and events tried to distract her?

The answer? She has two requests to represent her company overseas in the next month or so, and the commercial insults are not going to stop her.

Should tech leaders avoid Israel?

28 May 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel

Thus wrote the Financial Times earlier this year:

Israel brands itself as a “start-up nation”, the second-largest source of innovation after Silicon Valley, as measured by the value of its tech start-ups. The country is the world’s third-largest source of listings on New York’s Nasdaq, after North America and China.

But for all the hype why would a big multinational or conglomerate invest in Israel?

In yesterday’s supplement of the The Calcalist (Economist) Hebrew newspaper, there was an interesting item detailing the most sought-after employers that operate in Israel. The top 10 included 4 mega players on a global scale – Intel, Facebook, Microsoft and Google. Of the next 40, at least a further 11 are also well-known international brands, like eBay, IBM and Pfizer.

And here’s the point. While Israeli salaries may be lower than European or American counterparts, the article makes it clear that these corporations are paying well above the domestic average wage. Why?

Let’s face it. Israel remains surrounded by geopolitical uncertainty with r&d centres in the firing lines of those who value human life differently from corporate America. The country has few natural resources. There are extreme differences between rich and poor. And Israeli brashness come sometimes become oppressive, to say the least. So why Israel?

The answer is simple. Back in 1986, Israel began to ditch the “desert economy’ attitude and learnt to offer quality content to the world. In parallel to this increased openness, the high-tech industrial revolution took place, where Israel has much to offer in the fields of internet, nanotech, mobiles, solar energy and much more. And in local brawn power, often tried and tested within the military, you end up with the very formula that leading multinationals cannot readily find elsewhere.

There are those that oppose this openness. They demand that the world boycotts Israel, (although they frequently allow their own products and services to be marketed in the Holy Land).

But here is the real irony. For all the shouting of the hate campaign, their supporters are totally unable to cut out the effect of eBay, Siemens, Intel et al on their lives. Even the logo of Google was designed by an Israeli.

It is that momentum that has encouraged “Global Corporate Inc” to seek out the Israeli job market.

Israel’s economy – 3 strikes are you are “in”

26 May 2014
No comments
Categories: Afternoon Tea in Jerusalem, Business, Israel

When Fitch affirmed Israel’s economy “A” credit rating this week, the news was not greeted with any surprise.

Among key drivers behind the Fitch rating, analyst Paul Gamble cites the fact that fiscal consolidation remains on track. The central government deficit narrowed to 3.2% of GDP in 2013 compared with a budgeted 4.3% of GDP and a 2012 deficit of 3.9% of GDP, due to tightening measures and various one-off factors. Revenue strength resulted in a small surplus in the first quarter of 2014, compared with a deficit of 0.5% of GDP in the first quarter of 2013. Political commitment to consolidation appears strong and a fiscal rule has been tightened, Fitch says. It forecasts a further narrowing of the central government deficit to 2.5% of GDP in 2015.

What is important to realize is that when it comes to Israel, Fitch is dead in line with its rivals; Moody’s and S&P. All of them have Israel in the “A” or above bracket.

Yes, there are problems. Just look at how the unions at the ports are still able to maintain their restrictive practices. The geopolitical situation remains unsteady, as it has done throughout Israel’s rapid economic growth since 1986. And many ask if the economy is too dependent on revenues from the new found off-shore gas reserves.

My point is different. A technical writer once explained to me that if you want to emphasise a point to a reader, you should cite three examples, one directly after the other. These international credit rating companies have together shown to the international finance community just how positive is the current positioning of the economy in the Holy Land.

Client Feedback

"Michael transformed the way I think and approach working, and also how to monetize my social media and communal projects."

CEO of digital media company

"Michael helped my high tech company take off."

CEO of clean energy start up

"Michael has been an invaluable resource to me throughout all of the steps of starting up my business."

Art Studio owner

“Working with Michael Horesh is like having root canal treatment, marriage counselling and business coaching all rolled into one, successfully.”

CEO of digital media company
CEO of clean energy start up
Art Studio owner