Israel Archives - Page 44 of 67 - Michael Horesh Business Coach and Mentor

2 December 2011

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Categories: Blog, Israel, Jerusalem

Type “Jerusalem” into google and you will end up with a million and one news items, which together seem to indicate that the holy city is burning all over; ultra-orthodox Jews bashing up each other, a new light rail system that has suffered delays and strikes, and the usual geopolitical turmoil.

Walk down 99% of the streets throughout the city and you will find a very different Jerusalem, one riddled with culture, multiple religious backgrounds, peoples from 200 countries and much more. How to explain this “split personality” to an outsider?

Eric Silver’s posthumous book, “Dateline Jerusalem“, neatly encapsulates the conundrum. Silver was a wonderful journalist, staunchly Zionist but never afraid to criticise Israeli governments. His wife has just released a compendium of his writings on Jerusalem that read like a version of “war and peace”, where he describes the beauty of what is for many but mixed with the pain of what often happens on the political stage.

And what is that beauty today?

Take the latest event, “Hamshoushalayim“, which is a corruption of the Hebrew words for Thursday, Friday and Jerusalem. Running every weekend during the month of December, the festival combines food and culture, dance and science, churches and synagogues. All reports from last year were positive.

This is no one-off piece of spin. The second annual Jerusalem Design Week is about to open in a grand building, designed in biblical theme by a German architect after the First World War. Jewish artists, Moslem musicians and overseas guests will all feature.

Earlier this week, I attended an event to honour new immigrants to Jerusalem. The mayor, Nir Barkat, gave the key address. He recalled that tourism to Jerusalem has close to doubled to nearly 4 million visitors over the past three or so years. His vision is for 10 million.

Realistic? Well the annual Marathon, scheduled for March 2012 is set to capitalise on last year’s success and thus should help to boost the numbers. And so I can go on.

So what’s happening in Jerusalem? As my daughter would say, plenty of “good stuff” for all. Shame that the international media cannot see fit to feature it.

28 November 2011

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Categories: Blog, Business, Israel

Here’s simple question for Western economists to consider. Aside from Israel, how many other countries have continuously reported 4% economic growth since 2003, including this current year? Apart from China, not too many.

Israel’s economy is similar in size to Greece, Portugal and Ireland, although it shares few of the problems of these territories. These countries ran up large debts. Bankers were prepared to allow the red numbers to grow for too long. And the politicians have dithered in coming up with a solution.

So when former finance minister and now Prime Minister, Binyamin Netanyahu, says: “”We must continue this responsible management. This means that we will need to reject with an iron fist populist draft legislation – both from the coalition and from the opposition,” it should be time for others overseas to listen in on Israel’s plan.

For all of Israel’s economic and high tech successes, the country will not be immune from any slowdown in Europe. So, it is hardly surprising that this week, the Bank of Israel is expected to announce a drop in the central rate of interest. And reports in the Hebrew press suggest of work in progress for an emergency budget, which will contain some severe cuts – if the looming recession was to demand it.

Just how serious is the Prime Minister? Can his Finance Minister deliver? What will be the position of the Bank of Israel?

It is easiest to start with the latter. The Governor of the central bank, Stanley Fischer, is an internationally renowned central banker. Over the past few years, he has taken on vested interest groups, local banks, government ministers and his own workers’ union, and usually won convincingly. Local and oversees observers are sure that he will look after his end of things.

The finance minister, Dr Steinitz, has deservedly built up an excellent reputation over the past three years. However, you begin to wonder just how much he has the full support of his boss. Oops – room for some worry here.

As for Netanyahu himself, he knows how to talk the talk, but…..If he were to give in on the wage demands of hospital doctors, it would make him very popular. However, that decision would kick in a chain of other public sector pay claims. The defence budget is almost certain to require a heavy upheaval, as threats surface on the borders of Syria and Egypt. And, as usual, the government is a coalition, compromised of many small squabbling factions; bad news for strong government.

hw will all these factors effect Netanyahu’s looming election planning? Personally, I have never seen him as a man who stands up to pressure.

There is much to praise about the Israeli economy. Shaul Rosenfeld’s recent blog makes for an excellent summary. What is not clear to me is what is the biggest threat to the recent economic achievements in the Holy Land – poor European financial leadership or a local team that will lack fight and direction at a critical moment?

25 November 2011

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Categories: Business, Israel

When a business mentor starts off with a new client or meets up with them after a bit of break, there is often a feeling of “positive tension” in the air. What the devil am I going to be asked now? Can I help? Can I direct or coach them?

One common starter thrown to me is: “How do I find new clients?”. Funnily enough, I often find that the client already knows the answer. They just have a mental block looking at what may be the very obvious.

For example, earlier this week, I was asked this question in a very challenging manner by a customer. 10 minutes later, after cooly forcing them to consult their contact list on their mobile phone, they had compiled a healthy list of people to call.

Time management is another of those recurring themes, which is often discussed at my sessions. And I have written about it extensively under various guises.

Possibly a different approach is to consider what one blogger has determined as “the third rule of business“. Put it simply; if you don’t keep focused, you don’t get nowhere slowly.

Let me expand. If you have a clear sight of your vision, then you will know how to form a strategy. If you have a definitive methodology, you should be able to identify what tools you are missing. And whatever is lacking, you will dedicate yourself to go out and get it, somehow, legally.

No focus means lots of opportunity for commercially valueless tasks, which is a politically correct term for poor time management.

Another topic, usually raised by tech-savvy entrepreneurs, is why they have to invest so much time managing. Why can’t people just get on with their tasks by themselves?

An article in this month’s Harvard Business Review cheekily posed the challenge: “Let’s fire all the managers”. After all, “management is the least efficient activity in your organization“, no?

The study is worth reading in full. My point is somewhat more basic. An entrepreneur tends to come into commercial life, wishing to concentrate on his “baby”. They soon face the startling realisation that they have to take responsibility for a whole concern; admin, finance, sales, strategy, legal and even the post. Time and detail. Yuk. Remaining focused ain’t always that easy.

As for the mentor, well they have their own enterprise to operate. Fortunately, they should have the skills to empower the client to engage successfully such subjects.

So, I suggest that the first question the customer should ask is what experience the coach has handling all of these an similar subjects.

18 November 2011

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Categories: Business, Israel

Prof Stanley Fischer is well into his second term as governor of the Bank of Israel. A highly experienced and respected international banker, who has the ear of Ben Bernanke in America, he has rightly taken a lot of credit for guiding Israel through the 2008 credit crunch.

Most predictions leave economic growth for 2011 around 4.7% in the Holy Land. G7 eat your heart out.

Is there a looming “but”?

Most of this surge took place in the first quarter (7.2%). Private consumption for the second half of 2011 is almost certainly in the negative sector. Exports in the third quarter collapsed by 16.9% compared to the same period last year. And nobody doubts that the Euro blues have yet to fully impact on future orders or foreign direct investment.

In the words of leading financial commentator, Avi Temkin:

The word “concern” can describe most thoroughly Bank of Israel Governor Stanley Fischer’s mood, at least according to what he said at a press conference on Tuesday. In the meantime, Fischer is not expressing more than concern. His essential message can be reduced to a warning not to increase expenditures and not to let the deficit expand beyond what stems from slowed growth.

What Temkin is saying is that Fischer believes that Israel can get through any global downturn or recession. Growth could stick at a very respectable 3% in 2012. There is one big proviso – politicians do not force the mandarins at the Finance Ministry to cave on to populist measures. Social protest movements, army generals and even strikers may have a point, but not all changes can be made in one shot.

Where to now? The economic world is in a period of instability. In such an era, those with clear heads and a vision are a rare breed but definitely the order for the day. Our man Stan fits the bill. I just hope he continues to meet the political needs of the Prime Minister.

15 November 2011

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Categories: Business, Israel

For all the protests outside St Paul’s Cathedral in London or around Wall Street in New York, many have traced the origins of the 2011 street protests to events in Tel Aviv.

For all the many successes of the Israel economy over the past decade – even this year, growth will hit the 4% mark – the housing market remains unfordable for many newly weds and the prices of standard food items are viewed as higher than necessary.

The first reforms are on the way. Manufacturers have acted positively. The government has moved. The cry of “social justice” has made its mark. Good.

And yet….

Currently, Israel has three mobile phone service providers, all making humongous profits. One of these giants is Orange /Partner, which is in the process of laying off employers, primarily from its customer support teams.

Orange blames its problems on increased competition and government interference with pricing policies. As somebody who jumped ship and moved to another company this year, I suggest that the corporate decision-makers look at their treatment of customers. “Bad” would be a complimentary description from my perspective. After all, please note where the cuts are being made.

However, the problem does not stop there. Bank Leumi has a heavy position in Partner. This financial leader has just posted a profit warning, along with its two main rivals (Hapoalim and Discount).

What is my issue?

1) I have yet to see a mention of bonuses being reduced for the top guys at the banks or the mobile companies.

2) If the banks do not have enough extra money, then liquidity becomes a problem and thus lending starts to dry up. In parallel, bank charges will probably rise to cover partially the gap.

Can you now understand the average customer / consumer / person on the street for being concerned about greed going unpunished?

11 November 2011

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Categories: Business, Israel

It was just another monthly meeting of the Jerusalem Business Networking Forum. As the co- moderator, I had asked three people to introduce themselves via elevator pitches:

Phil referred to his new concept for developing a unique rotor for verticle take-off. This was layman’s speak for a new kind of helicopter.
Stephen spoke of his diagnostic kit to prevent “graft versus host disease” a tragic and frequent complication in stem cell treatment.
Pinchas described his company’s ability to offer significantly more memory space on mobile devices.

Was I just lucky in choosing these three people from the audience?

I think not. The guest speaker was Dr Ed Mlavsky, a pioneer in the early 1990s of creating venture capital facilities in the early 1990s, specifically in Israel. He listed a host of interesting stats.

During 2010, Israel saw the creation of 250 high tech start ups. In the state of Michigan, the equivalent number was barely three. In the same 12 months, 391 Israeli firms raised US$1.26 billion in investment! Not bad for a slow year in the global economic cycle.

From the other side of the coin, it is worth reflecting that there are now over 124 multinationals operating in the Holy Land. And why? Well, much of this trend was started by Ed, when he led the nascent Bird Foundation project. This partners American multinationals such as Oracle with local start ups with 50% of the cash coming from the mutual governments.

The result? In the first 13 years alone, US$4.5 billion of direct sales were created via 300 companies. The knock on effect to the rest of the economy – in terms of income tax, employment, higher IP, export and more – has yet to be verified. Israel now has similar agreements with several more countries, including Singapore, Russia and Korea.

These are not isolated anecdotes. Telmap was founded in the year 2000. A decade later and with over 200 employees, the company was recently purchased by Intel. Israeli IPOs on Wall Street are still very popular today. And the reasons why I could detail an extremely long here was neatly summed up this week by Francisco Sanchez, the US Under Secretary for Commerce.

There is a lot of American money invested here, mainly because Israel has done good work good work on money laundering, and this country has amazing skills. In addition, the Israeli government also strongly supports innovation.

It is very likely that 2012 will see a global recession. Israel will not be immune to that. The point is that others struggle, Israelis believe that thy have an economic model that will lessen the fall out and can be readily copied. If you do not believe look at what Phil, Stephen and Pinchas have already achieved.

17 October 2011

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Categories: Business, Israel

Consumer brands have bombarded our subconscious – and won

Thus summarises the Financial Times newspaper in a discussion on a timely new book, Brandstorming, by Martin Lindstrom.

In many ways, this is what the Wall St protests are all about. With disturbing similarities to the social exhaustion caused by the 1929 financial collapse, and the Great Depression, people around the world are fed up combatting a double whammy: the continued perceived domination by big business and the empty rhetoric of their leaders.

If the protests remain in the social sphere – ie, do not spill over in to something more sinister – can they realise their targets? During the summer of 2011, Israeli consumers proved what can be achieved through non-violent mass action.

It all started with a nondescript posting on Facebook. Why Facebook? One reason is because Israel’s democracy is based on PR and thus has no constituencies. Politicians in Jerusalem do not have to listen to their voters.

In fact, members of Israel’s ruling elite have been “sidetracked” by two parallel issues. First, there is the persistent existential issue – Iranian nuclear threat, a dissolving peace treaty with Egypt, Hamas, et al. And, there has been a need to protect Israel’s economic achievements of recent years. For all the anger, the country will register growth of nearly 5% in 2011.

From June to August, the streets of most major cities in Israel were home to a wide array of protests, “tent towns”, musical artists performing for social change and more. In a country of 7.8m people, it can be estimated that over 1m made their voices known. And the result?

1) Last week, the inflation index showed a drop of 0.2%, partially caused by the fall in the prices of many staple products. The prime sellers of milk and canned products have all rushed to reduce prices, partially prompted by the calls for boycotts by large consumer groups. Similarly, newspapers have run stories, comparing prices of brand-for-brand products between America, Europe and in Israel. The reading makes you feel a fool, if you happen to be living in Tel Aviv.

As a side bar, Globes published a critique of Unilever Israel and its so-called price cuts. The newspaper found large evidence that the changes were illusionary in the main, possibly reflecting some of the conclusions of Martin Lindstrom.

2) The Israeli housing market has not been seriously perturbed by a global credit crisis. Prices continue to rise. To that end, the Trajtenberg committee has proposed a serious of measures, which will ensure that there will be a greater volume of cheaper housing available for young married couples. The governor of the Bank of Israel has added his voice of approval.

And what is this committee? Led by the chief economic advisor of the Prime Minister, it was set up to provide answers to the questions and demands posed by those same demonstrators.

3) It is a matter of debate (for now) if Trajtenberg has gone far enough. But it is definitely a start. The professor went further. He is providing an avenue to shift resources to different social groups in the economy.

That is not only to say that the budget of the defence sector will no longer be seen as a sacred cow. “Economic powerbrokers” – those who own mobile companies, finance houses and who knows what else through webs of shareholding arrangements – will have to sell off some of their assets.

It is too early to predict how the protests in America or wherever will turnout. Will they be beaten by the wintry weather of the East Coast or encouraged further by politicians seeking fuel for the election campaigns.

Either way, so far, they have been wrapped in strong overtones of racism and antisemitism. By comparison, the student leaders in the Holy Land had gone out of their way to seek support in minority communities, be they Muslim, Druse or ultra orthodox Jews.

And maybe that last point is the clue to what is really going on around Wall Street and how events could eventuate. Is it (just) the economy, stupid?

14 October 2011

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Categories: Israel, Jerusalem

Google “Jerusalem” and you will emerge with billions of references to biblical issues or the latest updated geopolitical drama.

Now think again: Remember that it is a city can boast over 5,000 years of history. It has to be full of charm and interest that has to reach beyond the standard issues that interact with ordinary travel guides or editors of global media giant, often simply looking for instant copy.

How do I know this? Well let’s start with some boring stats for proof. In September 2011, a record number of people visited Israel, around a quarter of a million people. Most of them visited Jerusalem. Surely, they were looking for more than a few explanations about Crusaders or the Wailing Wall?

What is special about Jerusalem? Because it is the centre of three mega religions? Because it is just 45 minutes drive from the Dead Sea, the lowest point on earth and considered by many as one of the wonders of the world? Because a walk on its roof tops offers a most surprising multicultural experience? Because……

Maybe. Here’s my take.

Earlier this week, my family hired some quads and left the city westwards through the Jerusalem forest. Within seconds, we had put behind us the hustle of the Middle East and emerged into a “time warp of tranquility”.

All those cute lines about getting out into nature, birds chirping, wild animals around you – suddenly became a reality. Who would have suspected this, just kilometers away from the Old City, one the central issues in the Middle East conflict? It was fun, exhilarating.

The authorities are obviously trying to protect the area. New trees are visible. Picnic spots are clearly designated and clean. Walking and biking paths were well-marked. And kudos to the team at Jerusalem ATV Tours for a great ride.

My point? Jerusalem is more than just a city of hot political and religious news. A melting pot of around three-quarters of a million people, it hosts a deep inner beauty that needs to be seen to be understood and treasured and protected from the ignorant.

10 October 2011

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Categories: Business, Israel, Palestinians

A couple of weeks ago, I wondered why if G8 economies are plunging into a debt-driven recession, they are handing over US$80 billion dollars to Libya, the world’s sixth largest oil producer. Non comprende on my part.

Yesterday, I learnt of another Eastern absurdity that is fooling Western politicians.

The European Parliament (EP) budget committee proposed to increase financial aid to the Palestinians by €100 million in 2012.

Let me be clear. There is nothing wrong in giving to the Palestinians per se. The ec onomy of the West Bank may have picked up. A lovely new mall has opened in Gaza. But the economic base is still very limited.

That said, the question is whether in a time of severe economic instability, foreign monies – extra cash at that – is to be handed out to a grouping, which has a poor record in abiding by the principles of accountability and transparency?

ITEM 1: For years, the Funding for Peace Coalition (FPC) provided an excellent job, monitoring European transfers to Palestinian organisations. The report card for Brussels was so poor that the EU was not even able to publish its own investigation into the issue.

It is nearly a decade since Nigel Roberts, the previous World Bank’s top official in the region, described global financial support for Palestinians as “the highest per capita aid transfer in the history of foreign aid anywhere”. And still the questions remain. Where has it gone to? What has it achieved?

ITEM 2: Numerous UK-based investigative groups over the past few years have posed similar questions to the FPC. The Daily Express newspaper was forced to post the headline: “How 100m of your cash goes to fund terror.” A year later, The Taxpayers Alliance pressure group similarly wondered why aid is distributed without reasonable scrutiny. And I have seen similar articles in Germany, Australia, et al.

ITEM 3: NGO Monitor is an academic group, based in Jerusalem. Over the past decade, it has forced several governments to reconsider their funding efforts of teams, supposedly advocating peaceful change on behalf of Palestinians. In fact, on many occasions, a more deceitful agenda has been hidden from the national Treasuries concerned.

One excellent example is the Dutch government. Over the past 18 months, it has realised the need either to downgraded or to eliminate support for NGOs that have effectively encouraged a policy of incitement against Israel, while purportedly focusing on bettering the lives of ordinary Palestinian citizens.

And so on.

All of the above have no small share of their critiques. They are despised as right-wing with a narrow – even Zionist – agenda. Even if all this was true or partially true – and in many cases that is inaccurate – , “so what“?

Public taxpayers money is being distributed without due regard. That is unacceptable!

These are not empty words. Just google the phrase “Palestinians + corruption”, and see what you end up with. Abbas, Arafat, Arafat’s family – the list is endless of top people associated with creaming off money. And as Palestinian tax revenues are weak, most of those funds must have come from………… Deja vu!

Will the next load of European dosh support the peace process? “Tawfik Tirawi, former commander of the Palestinian Authority’s General Intelligence Force in the West Bank, has said (last week) that Fatah has not abandoned the armed struggle option against Israel.” Can this threat be interpreted as a case of ‘give me the money or I start blowing up the peace process’?

What next? I quote a very simple line of thought from Laima Andrikiene, MEP and vice chairperson of the European Parliament’s Subcommittee on Human Rights:

It was about time the European Parliament showed some common sense and demonstrated that it can base its policy with countries beyond the EU on clear-cut strategy and reason.

3 October 2011

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Categories: Business, Israel, Jerusalem

The Israeli government is revamping its mentoring programme. As one of the referees from the Ministry of Industry said to me last week: “Where we need to improve is in our planning and management skills”.

No doubt about that. The question is if the Israeli public sector capable of following the advice it offers to others?

Tomorrow morning, Tuesday 4th October, 730 specialist doctors located in hospitals around the country are about to quit. Yup – simply walk out of their jobs. Now, before you scream “How could they? What about the oath, etc”, I caution you. These are not lazy or greedy people.

One of them was interviewed on television last night. When he downs tools, it will be after completing yet another 24 hour plus shift.

Typically, these are people in the 30s and 40s. They are fully qualified, and have often taken on extra army service along the way. Their average basic wage is around 29 shekel per hour (almost US$8). By comparison, my teenage kids earn around 24 shekels waitering in part time jobs.

The whole country knows the situation. Medical unions have been demanding changes for years. My father was unexpectedly hospitalised earlier this year – it was hours before he was seen by a doc in the ward.

So let’s assume I was appointed mentor to the Prime Minister, with a specific emphasis on health issues. What questions would I ask?

Why have you failed to appoint a full Minister of Health, but only a deputy minister? Are coalition affairs more important than the lives of 7.8 million citizens?
Why is this deputy minister rarely seen in public or in newspaper interviews? What is he hiding?
With all your advisers and your own experience, why have you let this situation develop? What could you be doing better?
Are you not able to see how desperate are hundreds of medical experts that they are prepared to abandon a system for which they have trained years to enter and to better?
And if you cannot negotiate with doctors, who are the core of the middle class and a positive influence on society, what does it say about your ability to “deal” with Israel’s enemies?

Meanwhile, as the two sides play out the final hours of bluff in the national media and in courts of arbitration, the Israeli government continues to boast of managing a falling budget deficit. Great, but….,

And here is my final question, can good fiscal policy simply be measured in financial stats? Is not the Prime Minister responsible for the lives of his country?

28 September 2011

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Categories: Business, Israel, Jerusalem

Jews in Israel and across the world are about to celebrate their “New Year”. 10 days later is a fast day, the Day of Atonement. It is a period of celebration, combined with deep reflection.

The past week has seen several leaders in neighbouring areas, calling on the world to take action against Israel, including a call for economic sanctions. So what is it about Israel, that when they do their own reflecting, gets them so bugged?

Is it because Israel has invented so many modern technologies which billions around the world take for granted: internet chat, solar window, minute digital cameras, electric cars, disk-on-key, etc, etc, etc.

Is it because of the availability of free speech, so craved for in other countries. Last Friday, Israelis were able to see all of the verbal debate between Netanyahu and Abbas at the UN. However, the screens in Ramallah went blank when the Israeli Prime Minister spoke.

Is it because of the fact that Israel can boast 9 Nobel Laureates, including 5 successes in the past decade alone? For a country which still has officially less than 8 million people and few natural resources, that is an amazing achievement. It is just over 1% of all the awards.

And of course there is the contentious issue of Jerusalem, the centre of three great religions. Well, I ask you: Where else in the world are the praying rights of such diverse sectors maintained, protected and upheld, despite the momentous geopolitical pressures surrounding the city every day? That is some achievement in my view.

As the year 2011 begins to wind down in the econmic dumps, Jews are starting to celebrate the lunar year of 5772. Israel’s economy has had another boom year. Next year,who knows? But I bet there will still be some jealous people out there, hiding their frustration in politically correct hate, because Jerusalem endeavours to protect its precious freedoms.

24 September 2011

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Categories: Business, Israel

I am plodding my way through David Clutterbuck’s book “Everyone Needs a Mentor”. Ambitiously described as UK’s number one mentoring book, the subtitle is very poignant – fostering talent in your organisation.

Talent – there are many different ways to apply this word; intelligence, nous, skill, calibre, clear thinking, and….well don’t let me stop you.

In the past week alone, I have come across this issue three times, each one in a different context.

Deborah (not her real name) has been drifting commercially for a few years. With a first degree from America, she now lives in central Israel. She has asked me to look at a new idea of hers. In one of our first discussions, I suggested that she consider what skills she has and how they can contribute to the project.

Briefly, she cut that part of our meeting, declaring the subject irrelevant. Since then, there has been progress, but it has not been rapid. But a few days ago, she found her mantra and asked me for advice aas to what kind of partners she needed.

“What kind of tasks need to be fulfilled?” I responded.

And Deborah duly walked in to my trap, when she asked if I thought she had the right abilities. I started to recall the earlier discussion re talent, and my client was stunned that she had previously ducked out of the conversation. Her face indicated that it is time for a change.

Subject number two is the engaging and – lady, Sarah. Similar to Devorah, Sarah has held a number of positions over the past few years, not all in her field. However, she has now decided to become self-employed and strike out on her own. Can I help her?

Surely, and by the way I quickly wonder: “What are you skills?” Silence! Hard and fast bemusement. It is as if the subject is either taboo or too painful for contemplation or simply the question of a lunatic.

And the amazing thing was that I actually knew the answer, which the client struggled to face up to.

Finally, I ask you to meet 37 year old, Mr Ilan Bracha, who was featured in today’s weekend paper. Ilan grew up playing football and eating fast food in a poor town, south of Tel Aviv. When he enlisted, he found his way into a crack unit.

After the army, Ilan left Israel to “try to make it” in New York. Skipping university, he learnt his business acumen on the street. 15 years later, he is considered one of the city’s most successful real estate agents. How?

Ilan Bracha recalls what the army had to teach him; be smart, think ahead of the enemy (or competition) and be aggressive. Ilan Bracha knows what he has to offer his 117 agents and does it very well.

It is this understanding of Bracha’s – the open appreciation of his skills – that most mentors try to instill in their clients.

23 September 2011

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Categories: Business, Israel, Jerusalem

So, it’s official. Yesterday, Thursday, the world’s banking elite queued up in front of the media to announce that policies of “muddling through” are passe. Stocks and shares duly plunged, with London’s market estimated to have lost a mere 64 billion dollars…..or was that pounds.

Everybody knows that it is all about handling debt. To be more precise, it is about grown up politicians around the world not having the sense and courage to take the responsibility to manage their own debt.

For example, in America, Democrats and Republicans fiddled around before they just about squeezed out an agreement to ensure that Washington did not default. In Italy, the Prime Minister has been too busy fiddling around per se in order to handle has country’ financial black hole. Madam Merkel in Germany is preoccupied with pending political defeat, and that conundrum is hindering her from bailing out the Euro.

Debt, debt , debt and nobody knows how to make it go away. So here are my two suggestions. They will require some bold moves from decision-makers, who are often intent on just being politically correct. Let’s venture off to the Middle East.

First, I wish to turn your attentions to the oil producers. Much of the debt of Western consumers ends up in the pockets of petroleum’s big guys, who are not often the best proponents of democracy. So, by chance, let me pick on the world’s sixth largest manufacturer of oil, whose leader is rumoured to have laundered a fortune in bank accounts around the globe.

The problem is that I am talking about Colonel M Gaddafi. And nobody seems prepared to empty his treasure trove worth…well probably well over what the London stock market leaked 24 hours ago.

Contrast that thought with the fact that the rich G8 countries – including the faltering economies of America, Italy and Britain – have pledged US$80 billion – I repeat EIGHTY BILLION DOLLARS – to support Libya and others. And now it emerges, that the Libyan rebels have discovered a US$23 billion “bonus” in tha vaults of the central bank.

If I can spot these misfits, why can’t the politicians?

Item number two is Israel, currently taking its annual whipping at the UN. Understandably, the Palestinians are demanding recognition from the Assembly, while doing a good job refusing to acknowledge the needs of Israel’s security.

But just step back for a moment and look at Israel’s economy. Despite being surrounded by enemies and seeing European export markets dry up, the IMF is still expecting Israel’s growth for 2011 to climb to 4.8%. Yes, this is revised downwards from previous assumptions, and yes, 2012 will be lower. How much so?

3.2%, with inflation down and unemployment expected to hold steady. America et al don’t come anywhere are not predicted to come anywhere near this achievement. (And the numbers are supported by the Bank of Israel forecasts.)

So, if world decision-makers stopped criticising Israel and started analysing its strengths, would stock markets be where they are today?

19 September 2011

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Categories: Business, Israel

Israel was founded in 1948. For decades before and afterwards, the leading political elite came from the socialist side of the spectrum. Members of the kibbutz movements often figured in key positions in society and industry.

Those days have gone. As the economy was freed up from 1986 onwards and with the advent of globalisation, Israel’s economy has usually registered around 4% growth each year during the past 10 years. Jerusalem is now a full member of the OECD.

And yet?

The summer of 2011 saw hundreds of thousands take to the streets in protest at the lack of housing,the limited availability of reasonably priced housing for first time buyers, inflated prices of basic goods like milk products, and a feeling that the well off were doing well on the backs of others.

To take this one stage further, 16 family groups now control around 50% of economic output. This concentration of economic resources is arguably having a negative impact on different sectors and restricting competition. It is not just a case of envy. The consumer suffers.

So what has the Israeli government done about all this? Two academic committees are due to report over the next few days. The Trajtenberg subcommittee, looking at changes in the composition of the Israeli budget, is set to recommend diverting sources from the enormous defence expenditure to social or infrastructure projects. In parallel, there are plans to prohibit the wealthy from controlling large corporations, even when they may barely hold 10% or 20% of the shares.

Many of these considerations have still to be debated before new laws are legislated. Interest groups will work hard behind the scenes. But for all this noise, one small fact has been near ignored.

Back to the OECD. As Sever Plocker pointed out in the Hebrew press, most developed European countries spend around 25% of their budget on social items. In Israel, that figure collpases to around 15%.

If politicians were to understand the implication of that difference, they might finally begin to understand why people are so unhappy with how resources are allocated in Israel. And, amzaingly, these decision-makers might begin to really change things for the better. Now there’s a dangerous thought!

18 September 2011

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Categories: Business, Israel, Jerusalem

I love the Jerusalem Business Networking Forum. Over four years, Joe van Zwaren and Avigail Frij have set up monthly meetings that have resulted in dozens of business deals and employment contracts.

As the event moderator, I have great fun creating the structure of each get-together. Last week, over a hundred people came to listen to a panel of experts, discuss how to secure a new job. If there was one common theme – it was all about networking.

For example, many human resources specialists are ignoring CVs, deliberately turning to the social media for info on likely candidates. Increasingly, more key jobs are being found via word-of-mouth. Websites exist, which aggregate vacant positions. And these factors are not just typical to Jerusalem or to Israel.

As the participants arrived, they politely sat down in the auditorium and waited patiently. The start was slightly delayed and people waited,..and waited. I took the microphone, explained the situation and then took a risk.

I requested that everyone present move three seats down and start talking to a person they did not know. Surprised looks all round was quickly replaced by a deafening noise of interesting chatter. Networking had taken over. Comfort zones were pushed out the door in an instant! People were moving forward.

As one person indicated afterwards to me: It was only after talking with and listening to so many other people that they realised how many additional talents they had. They intended to highlight those skills over the next few days.

The Financial Times recently emphasised the importance of such meet ups.

“I have got references for amazing people and I have found amazing people to hire at networking events. Many of my best ideas have come after a couple of drinks at the bar and talking to people,” says Michael Acton Smith, chief executive of Mind Candy, the games company. He started Silicondrinkabout, a Friday night social event for developers in London, named in reference to the capital’s so-called Silicon Roundabout tech hotspot in east London.

Where and what next? Each to their own, but don’t ‘keep it a secret’. Yesterday, I was nervously approached by somebody asking if I knew how he could find space for his expanding business. He looked somewhat quizical when I began to mention all the other people he could speak to.

13 September 2011

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Categories: Business, Israel

Superficially, it does not look too promising for Israel’s financial planners. The trade deficit widened significantly in August, and the European markets are not looking to increase their imports at the moment. The Tel Aviv stock exchange has lost 25% of its value since January, currently at its lowest point for two years.

And yet, most of the fundamentals are still in place. For example, the banks are not being questioned as in France. Standard & Poor raised Israel’s credit rating last week. And figures released by Manpower show that 25% of companies expect to recruit additional workers in the coming quarter, with less than 10% looking to downsize.

One explanation for that positive sign may be due to the changes in the rate of exchange. The shekel, seen as a strong currency for much of the past year, has began to lose its gloss. It has lost nearly 10% of its value in almost 3 months.

The upside is that this shift will make Israeli exports more attractive and so help to encourage employment.

What next? It is evident that the hope of 4% growth for 2011 will not be met. That said, with inflation in check and a budget debt that can be financed, the Israel economy is still maintaining its positive shape.

11 September 2011

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Categories: Business, Israel, Jerusalem

The year of 2011 has seen the Portuguese, Greek and Irish economies collapse under the weight of unsecured debt. Italy, a member of the elite club of rich countries called the G8, may be next.

And there is genuine cause for concern that an Italian cold will create an influenza epidemic on the American financial markets.

So, imagine my surprise when I saw a headline that read: “G8 countries pledge US$38 BILLION to Arab states”. That’s right – 38 billion dollars.

And look who will benefit:

One of the first on the list is Egypt, whose leadership has shown that it is interested in supporting Ankara as it edges closer to Iran. And this weekend, the temporary military leadership in Cairo were amazingly late in preventing the Israeli embassy from burning down, as diplomats literally fled for their lives.

And then there are the pledges for Libya, the sixth largest global producer of oil. The average Libyan may not have benefitted from the petro dollars, but surely Western banks can release money from Ghadaffi’s bulging accounts for use of his former people?

How about some of the richer states like Saudi Arabia and Abu Dhabi chipping in with a couple of bucks for their neighbours? Why does the West always feel so morally guilty?

In comparison, Britain, America et al are trying to introduce austerity packages whilst promoting job packages. What a pickle.

I live in Israel. Last Friday, S&P raised the country’s credit rating to A+. Despite an expected downturn in growth for 2012 of around 2.5%, the agency noted that:

The rating action reflects our view of Israel’s improved economic policy flexibility as a result of strong growth and careful macroeconomic management…Israel is on a credible path toward continued government debt burden reduction and stronger external indicators.

In September, the next session of the UN will open in New York. Israel will again be criticised for the problems of the world.

9 September 2011

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Categories: Business, Israel

“If Israel’s economy is jogging along at 3-4% growth, why are hundreds of thousands protesting. If the government has extra cash from booming tax revenues, why can’t the Finance Ministry hand out a few extra benefits?”

Thus, I was asked on a local radio station this week. The compeer was reflecting a bemusement on the minds on many people. What is happening to finances in the Holy Land?

“15 impressive features of the Israeli economy” is a very encouraging headline from business analyst, David Hunkar. He cites low inflation, record low unemployment, low debt levels around 75%, etc etc. As for the banking system, Hunkar quotes an IMF report from January 2011:

….mortgage loan-to-value ratios are also low by international standards. Banks maintain high liquidity, and interbank and direct exchange rate risk exposures are small.

However….Hundreds, if not thousands, are still protesting on the streets, demanding “social justice”. Go into any of the large supermarkets and you will find a string of unexpected discount campaigns – all provoked by the voice of ‘the man in the street’. The CEO of Osem, one of the countries largest food manufacturers, publicly announced this week that his wage was obscene and that the company will be trimming down the conditions received by senior managers.

What’s going on?

Before we can answer that, there are further complications to be addressed. On the one hand, the global economy may be “hanging by a thread“, hurtling towards a deep recession. Although the jury is still out on that, any significant downturn will impact negatively on the Israeli economy, which thrives via exports.

Now balance that scenario with impending good news, roughly two years away. It is increasingly apparent that Israel’s economy will benefit from offshore gas exploration – cheaper access to fuel reserves and a large gain in tax revenues for the Treasury. Should this bonus is invested in infrastructure – roads, education, health, etc – the next generation of Israelis should be a very happy group of people.

In many ways, Israel’s economy is a case of “the good, the bad and the ugly”. If the notoriously weak politicians cave in to the demands (pecuniary and social) of the protesters and if there is a serious global downturn, the pockets of the Finance Ministry in Jerusalem will soon be empty. Years of prudent financial responsibility thrown away overnight?

And yet, eBay has just sunk US$20 million into an Israeli start up of eight people. I met several clients this week, seeking aggressive marketing models to break into overseas markets. If the government continues to promote this avenue and spirit of innovation, whilst better ensuring that the oligarchs do not run off with all the profits, then there is a strong economic future ahead for the country.

4 September 2011

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Categories: Israel, Jerusalem

Jerusalem is not just a holy city. It is very special for me. I love taking guests from abroad through the old streets and then on to its modern museums

And yet most of those people who do not live near Israel’s capital can only glean info from media sources, which in turn are usually purporting a biased angle. The result – confusion, when there should be amazement.

I am reluctant to quote official sources for references, if only for the very reasons quoted above. That said, last week, I was sent an official posting from the Jerusalem municipality ahead of the new academic school year. Written in cold language, it simply stated the facts as to what is happening with many of the minority communities in the city, stats that few know about.

What follows are direct quotes, although I have cut out some of the linking sentences: –

Jerusalem Mayor Barkat’s Education Revolution in Eastern Jerusalem

Jerusalem Mayor Nir Barkat has declared a revolution in the field of education in eastern Jerusalem. After 40 years of neglect, the city has commenced on an unprecedented closing of the gaps. The completion of the Mayor’s plan will lead to a significant change in education in eastern Jerusalem.

Since Mayor Barkat took office, new schools, including approximately 200 classrooms, have been built in the eastern part of the city. The municipality is currently investing the unprecedented sum of NIS 300 million (about US$85m)in the planning and contruction of 285 new classrooms in eastern Jerusalem, of which NIS 75 million-worth are already under constuction. …. Six kindergarten classrooms will also be opened this year, including one for special education. In addition, more than 40 classrooms were renovated and adapted to pupils’ needs, with emphasis on the Shoafat refugee camp. Sports facilities were built in Beit Tzafafa and in approximately two months (tentative) a new sports facility will be dedicated in Isawiya.

The municipality has also decided to invest NIS 750,000 per annum in advancing gifted and outstanding pupils, strengthening girls’ education and reducing violence. NIS 1.5 million has also been designated for schools’ organizational expenditures.

In the technology sphere, the Municipality is distributing no less than 1,720 mobile and regular computers to schools, kindergartens and teachers in eastern Jerusalem; 350 additional computers will be distributed to pupils’ homes. Classrooms in six schools in the eastern part of the city will be converted to sophisticated “smart classrooms” thanks to the installation of seven interactive blackboards. ……Teachers and principals will participate in computer training courses. Companies such as Ernst & Young, and various high-tech firms, including Intel, are participating in Mayor Barkat’s computer revolution.

Mayor Barkat said that, “…..We cannot countenance a situation in which Jerusalem pupils have no classrooms, roads or basic infrastructures. The investments will lead to an increase in residents’ quality of life.”

(Communicated by the Jerusalem Municipality Spokesman – 31.8.2011: For further details, please contact Jerusalem Municipality Foreign Media Advisor Stephan Miller at 050-3121841.)

24 August 2011

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Categories: Business, Israel

Well, on the surface, things don’t look so rosy for Israel’s financial and commercial community.

In one corner, you can find the pessimists, complaining that Israel’s government still manages a restrictive economy in key areas. After all, why can’t local consumers buy fruit and veg from other countries? And it does not help that too many large companies are dominated by a few well-connected families.

And as ever, lurking on the other side of the ring is yet another threat of geopolitical violence: this time from Gaza. Just look at this crazy timeline from Sunday 21 August, as posted by Stuart Palmer. Which modern society can operate properly under such a dark cloud?

06:56 -Short while ago, 4 more Gaza rockets struck southern Israel.
07:20 -Iron Dome intercepts 3 rockets launched from Gaza into Israel
10:00 -7 rockets hit Israel in last couple of hours
12:00 -2 rockets hit so. of Ashkelon, Israel, threatening 112,900 Ashkelon residents; city Pop. = 1/3 of Florence, Italy Pop
14:03 – On Thursday Israel sent 263 truckloads with goods and gas into the Gaza Strip for the Palestinian Population and is sending more today.
16:40 – Fifty Gazans entered Israel for medical treatment while 22 rockets landed in southern Israel.
17:02 – IDF Announcement: In Response to Rocket Fire, Israel Air Force Targets Terror Sites in the Gaza Strip.
17:15 – Another Gaza rocket hit Israel, which is approximatly 11 miles north of the Gaza Strip, threatening the lives of 112,900 Ashkelon residents.
19:27 – Hamas-run Gaza rocket hit southern Israel communities near Israel-Gaza border. A total of 31 rockets struck Israel today.
19:45 – Hamas launched a mortar shell with phosphorus which hit Kerem Shalom today. Hamas broke the international law which states: It illegal to use the substance in inhabited areas.
21:33 – A short while ago two rockets fired from Hamas-run Gaza fell near Eshkol Regional Council.
21:59 – Following the terror attacks emanting from the Gaza Strip, the Israel Defense Forces’ soldiers helped in moving babies to protected wings in the hospital.
23:14 – Three more Gaza rockets just struck southern Israel.

Which country? Well, actually Israel does.

It is not that I am advocating that crises are good for the economy of the Holy Land. Quite the opposite. What I am saying is that Israel has found a way in the past two decades to move ahead, despite everything.

How? Why? Is it the natural desire of a population that looks to change and innovate? The effect of the brilliance of the Governor of the Bank of Israel, Stanley Fischer? A government that has held the budget debt ratio in control despite the previous credit crisis and now financial troubles in Europe?

The future remains unsure for many economies, including that of Israel. The mandarins in Jerusalem have much to improve structurally. For all that, the current fundmaentals look good and need to be protected.

Pages

What’s going on in Jerusalem?

Time to learn (again) how to run economies sensibly

What to ask your business mentor?

Has Fischer got it right on the Israeli economy?

Israel’s start up model – a success or not?

What you don’t know about Jerusalem

World economic gloom and Middle East anomalies 2

Crisis management, mentoring and a sad case study

Why is Israel allowed to be different?

Mentoring – having a look at your client’s skill-set

World economic gloom and Middle East anomalies!

Creating a socially just economy – the Israeli attempt

Networking – and your so called comfort zone

Israel’s economy – confusing the pundits

World debt, the Arab Spring, and Western “leadership”.

Israel’s economy – thumbs up or down?

Getting educated about Jerusalem

Is the Israeli economy a good bet?

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