Pages

Palestinian & Israeli economies moving in similar directions

10 April 2010
1 Comment
Categories: Business, Israel, Palestinians

Friends and colleagues have mentioned that the Israeli and Palestinian economies are going through a quiet period. No sensational news. No major international investments.

Nothing could be further from the truth.

Look at the stock exchanges in the region. The Palestinian market, located in Nablus and in Ramallah, is being plugged by Barings. In Tel Aviv, the market has climbed over 100% and is back at its previous all-time high of November 2007.

The West bank economy is clearly benefitting from a decrease in local violence. Tourism is up 50%. A new industrial park near Bethlehem is being supported by the French government. And Israel has admitted that it owes the Palestinian Authority hundreds of millions of shekels in back payments – a nice unexpected windfall.

In parallel, local consumption in Israel has been on the move. H&M recently opened large premises in Tel Aviv and in Jerusalem, with queues for the changing rooms taking over 30 minutes. IKEA’s furniture shop in Netanya is one of the most successful in the corporation, and their second Israeli outlet is proving just as popular.

The export market has also taken on a new aspect. While Israel is noted for its innovation and hightech applications, several Israeli retail chains can be found overseas. Clothing, fast food, cosmetics – Israeli shops are pushing themselves into new markets. And Israel’s film industry has been represented at the Oscars for the past three years consecutively. There is life beyond the conflict.

American and Israel may be having a spat. The PA and Hamas may be arguing over who is responsible for Gaza’s power shortage. And quietly, millions of people are trying to put the violence behind them and get on with their own lives – good for the economies and good news for investors.

Positive financial news from Israel

2 April 2010
No comments
Categories: Business, Israel

In the first quarter of 2010, the Tel Aviv Stock Exchange rose by over 7%. It is now less than one percent off its peak of October 2007.

If you consider the country’s balance of trade, the figures for January and February 2010 show that the downturn of the same period last year has been largely made up. As Israel begins to develop its own natural gas supplies, the balance of payments figures will swing sharply positive over the next decade.

When measuring income, the GDP per capita has broken the US$30,000 level. In dollar terms, this is a 50% change within a decade. (12% when measured in the local shekel currency).

Yes – there are those who see that the stock exchange will level off for the rest of the year. The shekel is overvalued for the likes of Israeli exporters and is likely to remain that way for the near future. That will hit profitability of many companies.

However, whichever way you look at it, the three factors above are very potent. They clearly highlight the current strength of the Israeli economy.

Teva, Israel’s natual stock for all.

1 April 2010
No comments
Categories: Business, Israel

Read about an Israeli share portfolio, and very quickly you will meet up with Teva. It is Israel’s third largest global corporation. Once Obama’s health legislation kicks in, Teva is expected to benefit from a “stampede” of new customers. And so on.

In Hebrew, the word “teva” means nature. Just what is so special about this company? What has turned it from a hick-town importer of drugs in to the world’s eleventh largest pharma in just four decades?

One answer has to be leadership. The CEO is Shlomo Yanai, one of the few top generals to have crossed over successfully from the military to the private sector. For health reasons, Eli Hurwitz has just stepped down as President, after who knows how many years in the job. And the swop over has been managed smoothly so far.

A second reason has been an ability to grow through acquisition. Teva specialises in the generic drug market. Identifying new opportunities, from operating 18 factories in 1990, Teva now has 59 plants.

Clearly, growth has enabled it to secure a greater international standing. Teva operates in over 120 countries. Estimates register that every day, 2,500 prescriptions are issued with one of its products.

Another factor is the way Teva relates to human resources. For example, during 2009, when the average wage in Israel fell 2.8%, the Teva salary bill rose by 7%. 6,000 of its 40,000 employees are located in Israel. 

The bottom line is that during the 2009 credit crisis, total revenues climbed by 29%. Annual sales are worth around US$59 billion.

I do not have a position in Teva, but you can understand why the share may be a ready alternative for many investors.

So you want to be a business mentor?

31 March 2010
No comments
Categories: Business, Israel

Like myself, Mike Southon seems to have fallen into business mentoring by accident. Having spent hours giving out free advice, he took it on as a paid profession.

Gradually he began to realise that the skills required are varied; an appreciation of business, an ability to look ahead, accepting people for who they are and appreciating them, and much more. And yes, the fun is realising how you can benefit from your own advice, if you are prepared to listen to yourself.

So, having contemplated the words of Mr Southon, I found myself flicking my wife’s copy of “Good Housekeeping”. Usually, to preserve my male ego, I only read the recipe section, but for some reason I became engrossed in an interview with Ruby Wax. She is a larger than life American, who filled British TV screens for a decade from the late 1980s.

I would watch her interviews, find them funny, yet feel annoyed by them. Why? In effect, Ruby discusses this in the article. She was so desperate to make the show entertaining that she never truly related to those on the other side of her microphone.

Ruby is now a psychotherapist, teaching companies how to manage the emotional side of their business. She explains how she uses curiosity to capture the trust of her client. She also refrains from first judgements, which I assume that the speed of the media world does not encourage.

What really caught my eye was a box with her 4 key tips:

  • Be genuinely interested in what people are saying to you
  • Take time to be in the shoes of the client
  • Use your skills from the home and place them in your work environment
  • Check your own emotions before starting out for the day

A couple of weeks ago, I was asked by a friend to go round for a chat. In his business for 15 years, he now feels that he is missing a couple of tricks.

I listened. He is fun to be with. He likes his work. His website looked fine. We discussed his competition. He has some clear unique selling points. And yet…. it did not add up.

I was about to leave, when he showed me some correspondence, which had led to a rejection by a potential client. And right in front of him was his answer, or at least part of it. He had forgotten why he liked his work, and he lost the knack to impart that joy to others.

I guess that is why I like mentoring, and that is what Southon, Wax and others are also saying. We are helping people to assess if the original vision is what interests them today and how to obtain it.

Why can’t a manager do his “stuff”?

29 March 2010
No comments
Categories: Business, Israel

Stefan Stern’s recent blog in the Financial Times asks if there is a better way forward for managers? Why are they so often part of the problem as opposed to the solution? Why don’t managers help get “stuff” done?

Think about it. Surely, it’s obvious. A manager is chosen because he / she has demonstrated specific skills relevant to the position; leadership, human resources management, knowledge, initiative, etc.

The reality is often very different. Promotion may be the result of politics or family intrigue, rather than ability. Alternatively, the job description may change over time, while the individual has proved incapable of adjustment. Whatever, the organisation reveals an inability to “deal with” the bottleneck.

Bottom line: Potential disaster, unhappy staff, poor output, negative knock-on effect with other departments. Funnily enough, the issues can often be sorted out by investing a few thousand in a training programme from the Carnegie Institute or similar.

But that requires somebody in authority taking responsibility. They will have to openly recognise the problem and then handle it. Very awkward!

Stern discusses a book by Julian Birkinshaw, “Reinventing Management”. 

…Prof Birkinshaw says we should recognise that businesses also have management models. The problem is, the models that many employers use – whether consciously or not – are failing. “The harsh reality is that today’s large business organisations are – with notable exceptions – miserable places to spend our working lives,” he writes. “Fear and distrust are endemic. Aggressive and unpleasant behaviour is condoned. Creativity and passion are suppressed.”

….. When the economist Richard Layard published his book Happiness in 2005, his research revealed that managers were the last people most of us want to spend any time with. In fact, most people would rather be alone than with the boss.

Why has the vital practice of management become so discredited? …. We have lost sight of the basic point: that management is about “getting people together to accomplish desired goals and objectives”. In different settings in the early 21st century, different management models will be required.

I know of one multinational where the centrality of the decision making has crushed local initiatives to create new profit centres. But the reporting is now effected on time. Whoppee! Apparently that makes the top team happy.

One of my mentoring colleagues has reported that the senior management of his client is spread very thinly over a string of new projects. Core activities appear to be suffering. Thought out strategy has been replaced by the “fire brigade model”. That is to say they rush from one issue to the next, as quickly as they come up, controlling that crisis. Success is difficult to measure, while satisfaction escapes most. The long term effect on the company is not positive.

Alternatively, one of my clients has a small company. The CEO has clearly designated tasks for each person. Growth is perceived, and everyone knows how they will fit into the expected changes. Predicted sales towards the end of 2011 are looking positive.

Evidently, this is a place where everyone knows the stuff which needs to be done and is pleased to play their part. Which begs the question:If this SME, lying on the outskirts of a dusty city in the Middle East, has got the message, why have other – often more sophisticated set ups – missed it by a mile?

What Obama learns from Israel….and her economy

28 March 2010
No comments
Categories: Business, Israel

So President Obama and Prime Minister Netanyahu are not friends this week – at least not on the diplomatic front.

Turn to economics, and Obama’s ears are carefully tuned to what is coming out of Israel. It is an accepted fact that Israel’s financial planners read the credit crunch correctly. Stanley Fisher, governor of the Bank of Israel, has long been a mentor of Ben Bernanke, his American counterpart.

It turns out that one of Bernanke’s predecessors, Paul Volcker, is also a big fan of Fisher. This is all the more intriguing, when you consider that Volcker is one of Obama’s main fiscal advisors.

Sever Plocker, a leading Israeli financial commentator, recently attended a function for an Israeli bank, when Volcker was present. To translate and quote Volcker’s reply to a question:

During the crisis, you (Israel) did all the right things. And now you are reaping the rewards. But before the crisis, a long time beforehand, you realised that you needed to invest in r&d, in education and in knowledge……..You have a wonderful central banker….and I admire the budgetary capability and management of your Finance Ministry…..Don’t squander your successes.

Volcker is known to be very impressed by the way Israel had imposed controls and supervision on its banks, after previous local failings. Apparently this is one of Obama’s next important policy moves, and he has been advised by …..Paul Volcker.

Has Obama delivered his masterpiece?

26 March 2010
4 Comments
Categories: Israel, Jerusalem, Palestinians

Israel’s Prime Minister, Bibi Netanyahu, walked into a trap, created out of his own ego. President Obama simply closed the door, tight. Elegant and simple. In the eyes of the White House, Bibi has finally to revert from spin to substance.

Reading the papers, many argue that all Bibi has to do is to carry out the Road Map, which previous governments had already committed to. Yes, there are a few tag ons, but they would happen sooner or later anyway.

And why was the Road Map of 2002 not carried out? Without going in to the whole time line, the Palestinian leadership stuck with the Intifada, which turned out to be a series of unacceptable sporadic and inhuman attacks against Israeli citizens. Jerusalem was forced into a series of military responses. In parallel, the trust, which developed via the Oslo Accords and Nobel Peace Prizes was replaced with doubt and deep suspicion. The violence had to cease before there could be an effective return to the negotiating table.

Obama is pushing aside a decade of terror, forcing Israel to dismiss literally overnight all its misgivings. He is demanding that Israel freeze all West Bank activity including in East Jerusalem, as well as the release hundreds of deemed terrorists from prisons.

In return, the Jewish State is offered the promise of peace. Tens of percent of its wealth will be released from the military sector and devoted to social issues. Its sports teams will compete in Asia. Arabia will open up to trade and other delights. Europe will cease its diplomatic coldness. A brave new world could be around the corner.

So if Bibi delivers on what Obama demands, assumedly it will be left for Obama to convince the members of the Arab League to come to the party. And we all know that we are talking about a group, which remains united on one issue only – its common distrust if not demonic hatred of Israel.

What will this mean in practice? Will Syria stop encouraging Hizbullah in Lebanon from attacking Israel’s northern border? Will Hamas, which has held an Israeli soldier captive for 1,400 days without one visit from the Red Cross, respond to calls to open itself to pluralism? Will Saudi Arabia finance the peace plan, when it has rarely honoured monetary promises to the Palestinians?

And President Abbas cannot be ignored. Here is the man, whose heroic path in the Palestinian resistance movement was engraved in his planning of the massacre at Munich in 1972. Yes, Munich, the same city where Chamberlain had signed away the deaths of millions decades earlier. For all Obama’s pressure on Bibi, Abbas has yet to say openly and unreservedly and repeatedly if he is prepared to recognise Israel, unconditionally.

Obama is a man of sincerity. The health bill has its critics, but it will be bringing a major improvement to the lives of millions, very belatedly. To have lost the Congress vote would have meant a loss of credibility and power for the president. To fail in the Middle East will mean the loss of some Jewish votes and maybe the eventual demise of the one democratic state in the region, but not much more than that.

So the question is not as the media would have us believe when it asks how much pressure is on Bibi. What interests me more is if Obama will deliver on his peace promise or has he will he be handing over Washington to the ghosts of Munich past?

Dell Computers receives a Middle East welcome

25 March 2010
1 Comment
Categories: Business, Israel

Looking for an irony? Take a joy trip to the Middle East.

Two weeks ago, the Jewish Chronicle newspaper (UK) featured a story where computer giant, Dell, was suspected of operating a boycott against Israel. Bottom line – the call line made a gross faux pas, and the Dell customer in Israel eventually ended up a happy person.

And today? A complete change around. The Hebrew daily, Yediot, has reported that Dell intends to open an r&d centre in Israel. It will employ around 100 professional, mainly engineers.

The speculation follows a visit to Israel last week of VP Kim Thomson. The focus of the discussions was data storage, an area where several local companies have excelled in recent years.

Palestinian economy – new achievements

23 March 2010
No comments
Categories: Business, Israel, Palestinians

Talk about the rights and wrongs of the Palestinian economy, and you automatically get caught up in the crossfire of Middle East protagonists.

The story of UN Secretary General, Ban Ki-Mon, is a great example. Visiting Gaza a few days ago, he condemned Israel’s blockade of the territory. In parallel, it could be asked why he did not condemn Egypt’s blockade from its side of the border? The Jerusalem Post newspaper, quoting UN stats, questioned if there is a true humanitarian crisis in Gaza.

And so on. However, there are certain facts, which cannot be disputed. The West Bank under the control of the Palestinian Authority had a boom year in 2009, even when international economies were in free fall. The World Bank suggests 8% growth in just 12 months.

Is there more potential to be released? Surely. And the Palestinians have finally realised: Israel relaxes the security measures when there is less violence, ensuring greater freedom of movement. Everyone benefits. Simple.

Move over to Gaza, and the Hamas regime has not delivered economic prosperity. In fact, the local authority has now even began to control who will receive a haircut and by whom.

Meanwhile, Israel continues to allow the transfer of cash to international organisations operating in the Gaza Strip and the transfer of shekels to pay the wages of Palestinian Authority employees (about 70,000 in number).  And it continues to supply around 70% of the electricity needs of the area. 

The bottom line is that the Palestinian economy is split in two. The West Bank is replacing violence for higher income levels. In Gaza, the intensity of the official hatred for Israel is matched only by the high levels of unemployment.

Meanwhile: I have added a series of selected facts taken from the World Bank report and official Israeli sources.

  • Trade between Israel and the West Bank dropped by 4.05% in 2009 as compared with 2008, and constituted 70% of all the trade of the West Bank. The volume of trade with Israel stood at 13,594 million NIS.
  • The total trade of the West Bank grew by 2.75% in 2009 as compared with 2008. The total trade (including Israel) stood at 19,310 million NIS in 2009.
  • Palestinian imports from the world (not including Israel) registered an increase of 25% in 2009 as compared with 2008.
  • Palestinian exports to the world (not including Israel) registered a drop of 2.3% in 2009 as compared with 2008.
  • In 2009, Israel transferred to the Palestinian Authority (after deduction of payments owed by the Palestinians) 4,272 million NIS as compared with 3,918 million NIS in 2008. The increased amount constitutes another indicator of the growth in the Palestinian Authority’s economic activity.
  • Other indicators point at the growth of economic activity: an increase of 41% in truck movement between Israel and the West Bank; an increase of 29% in fuel consumption and of 7.6% in diesel fuel consumption in mid-2009 in comparison with the parallel period in 2008. The significant rise in automobile imports into the West Bank is also continuing.
  • A survey undertaken by the Palestinian Bureau of Statistics among businesspeople in the West Bank and the Gaza Strip in December 2009 points to an increase in optimism among manufacturers and businesspeople.

 Steps Taken by Israel to Support Palestinian Economic Activity

  •   Increasing the hours when the Allenby Bridge Terminal is open to the passage of goods and pedestrians
  • Upgrading the Gilboa-Jalameh crossing point in the northern part of the West Bank for vehicular traffic (opened on 13 October 2009). About 1500 cars enter the West Bank through this crossing point every weekend. Since the crossing point was opened to vehicles, the economy of Jenin has grown by 30-35%. The income deriving from the entry of Israeli Arabs into the towns of Jenin, Tulkarm, Jericho, and Bethlehem is estimated to be around 8 million NIS every weekend. In November and December, over 30,000 vehicles entered through the Gilboa crossing point alone. The permit for Israeli Arabs to enter the West Bank with their vehicles through various crossing points constitutes a significant contribution to the local economic activity.
  • Removal of roadblocks and barriers: Since 2008, the number of major checkpoints was reduced from 41 to 14. From April 2008 until today 209 roadblocks were removed. Ten of the barriers that were removed this past January are on Route 60, the major north-south artery in the West Bank.
  • This past year considerable sums of money were invested in upgrading the crossing points for goods between Israel and the West Bank, so that they could manage the movement of trucks in short periods of time and with efficiency. During 2010, 8 million dollars have been invested (with USAID funding) in upgrading the Gilboa and Shaar Ephraim crossing points for goods.
  • Beginning in January 2010, the hours of operation at the Tarqumiya crossing point for goods were extended, a measure which enables Palestinian merchants to increase the number of shipments which are sent on a daily basis to Israeli ports.
  • The quadrilateral dialogue headed by Japan to establish an agro-industrial zone in Jericho is continuing. An additional meeting will be held on 17 March.
  •  Israel is acting to assist the French initiative to establish an industrial zone in Bethlehem and is acting in full cooperation with the French President’s envoy to move the project forward.
  • Israel maintains close working ties with the Quartet’s Envoy, Tony Blair, and his team to handle and promote economic projects and measures that support economic activity, including the issue of the access road to the town of Rawabi.
  • The Israeli security network maintains close ties with General Dayton and is doing all that it can to assist the process of building the capabilities of the Palestinian security forces. Israel participates in a quadrilateral monitoring forum which convenes pursuant to the Berlin Conference and discusses subjects pertaining to the development of Palestinian capabilities in civilian security as well as in building capabilities pertaining to the law and to the judicial system.

The Gaza Strip

There is no shortage in the Gaza Strip, due in part to the flow of goods and raw materials through the tunnels.

  • Recently, the entry of glass into the Gaza Strip began, to enable the repair of homes that were damaged during Operation Cast Lead against Hamas. More than 100 trucks carrying glass have entered thus far into the Gaza Strip and this is continuing.
  • Israel has advanced contacts with the UN Secretary-General’s envoy, Robert Serry, to approve the carrying out of humanitarian infrastructure projects in the Gaza Strip, with emphasis on water and sewage.
  • Israel enables strawberries and carnations to leave the Gaza Strip for markets abroad.
  • Israel enabled in recent months the entry of cement and construction materials for the reconstruction of buildings and for various humanitarian projects. From May 2009 through January 2010, 1,352 tons of building materials entered the Gaza Strip. Israel approved the entry of an elevator for the maternity hospital al-Awad (15 February).
  • Recently, Israel arranged the matter of transferring social security payments to beneficiaries in the Gaza Strip.

Arabs in Israel – the economic angle

21 March 2010
No comments
Categories: Business, Israel

Just over 20% of Israel’s population is not Jewish. Legislation unambiguously protects the rights of religious and ethnic minorities. And yes, you can see more and more non-Jews represented at the top of professions, such as medicine, the law and even in the diplomatic corps.

Yet the painful truth is that equality before the law does not ensure equality when resources are handed out. It is an open secret that many communities have been starved of budgets by successive governments.

So, it is pleasing to report on two initiatives that will break this pattern. The first emerges from the private sector.

Pitango venture capital’s co-manager, Nechemia “Chemi” Peres (son of President Peres), credits…. the next economic breakthrough in the Arab population. Pitango has won a tender for a joint government-private sector fund to invest precisely there. He foresees the fund, Al-Bawadir (“buds” in Arabic) repeating the success of the government venture capital fund Yozma, which nurtured high-tech and created a breakthrough not only in deed but also in awareness.

The initial combined value of the new fund is around US$45 million. It has received the support of two prominent investors in the Arab Israeli sector, Jimmy Levy of the Jewish-Arab company Galil Software and Habib Hazan, a former manager at McKinsey & Co.

The fund also has the blessing of the Minister for Minority Affairs, Prof Avishai Braverman. The former chief of the Beer Sheva University, is also sponsoring a government initiative to invest 800 million shekels (about US$220 million) in 14 targeted cities and towns covering Druze, Muslim, Circasse and other minority groups.

The money will be devoted to specific economic and social projects, such as encouraging SMEs, subsidising new homes for young couples, youth enterprises, etc. In each municipality, the mayor will set up local coordination committees. Milestones will be set. Hope will be installed.

In an interview with the Hebrew newspaper Yediot Ahronot, Braverman explains that he is under no illusions. The money is but a drop in a vast ocean. It cannot make up for years of neglect.

However, the professor also makes an interesting observation. Most Israeli Arabs have consistently proved their loyalty to the country. For example, the Bedouin are historically known as the best trackers in the army. The two initiatives are a public and significant way to show that there is demonstrative change in the air. Israel’s neighbours can learn from this example.

Israel’s natural response – Teva

19 March 2010
No comments
Categories: Business, Israel, Jerusalem, Palestinians

Teva in Hebrew means nature, like wild rolling fields. It is also the name of one of Israel’s largest companies, quoted on NASDAQ.

Teva has grown in 3 decades from an insignificant local manufacturer to become the world’s largest generic drug producer, with factories on 3 continents. Only this week, it completed the purchase of Ratiopharm, Germany, for nearly US$5.0 billion, beating Pfizer to the finishing line.

Barden Capital Management, Texas, is typical of many such firms. It has consistently held a long position in Teva. Assessing the management, current and future market positioning, price ratios etc, they believe that Teva remains a good hold for some years to come.

Teva represents much of Israel’s commerce in that it is a company that has grown despite the existential problems, which the country continues to face. This week, the Tel Aviv Stock Exchange climbed to within 2% of its record high before the credit crunch arrived. Few other bourses can claim that achievement.

You will be unlikely to read about these successes in your average newspaper. Most reports from Israel  this week focus on the diplomatic spat with America; Israel’s poor management of internal decision-making by a minor committee of civil servants in the housing ministry and Washington’s childish response.

In fact, Washington and its European friends were merely content in blasting Prime Minister Netanyahu. They contrived to ignore how Palestinian President Mahmoud Abbas led a ceremony Ramallah to rename the main public square in honor of Dalal Mughrabi, the woman who in 1978 helped carry out the deadliest single terrorist attack in Israel’s history. All this, the day after the American Vice President had met with Abbas.

And neither did the Western allies condemn calls from Hamas and from the Palestinian Authority to react with violence against a religious Jewish ceremony in Jerusalem’s Old City.

Teva represents Israel’s natural response to these hypocrisies. It shows how the country is prepared to just get on with it. All Israelis want to do is to live their lives in peace with the world, creating a better global community.

Decision making – easier if you ask the right questions

14 March 2010
2 Comments
Categories: Business, Israel

How many of us have come across good, if not brilliant, people. But ask them to make a decision, and you know that you have time to read “War and Peace”, twice, before a definitive answer comes back.

Why? What holds them back? In my student days, a flatmate at the time was notorious for gathering bundles of information, but frequently delayed carrying out final steps. I have several clients today with excellent businesses, but they accept that they waste large amounts of time on relatively insignificant subjects. How many of us have observed senior managers efficiently receive company-wide reports, but then are incapable of following up with operative instructions.

Fear of making a wrong decision? Scared of losing power once a decision is made? Down right inability? There are several factors that come in to play.

Looking back at myself, I am able to admit that I would make decisions based on wrong perceptives. I can track how throughout my life how I would formulate an action, based on what people would think of me. I did not refer to what was good for me.

Dan Ariely presents the situation in terms of preferences. Many of us do not create for ourselves correct options. We tend to accept how others want to condition us, Unwittingly, we go along with the idea, and the result is thus often less than positive.

Matt Weinstein is one of Bernie Madoff’s many victims. What helped Matt adjust to his severe finacial loss was a small yet illuminating piece of stoicism. Recalling the Greek philosopher of 2,000 years, Epictetus, Matt observed: “People are not disturbed by things, but the view they take of them”.

We all get bogged down. We allow others to confuse our thought processes. The issue is whether you are strong enough to overcome and remove irrelevant externalities. We need to remember that we can always choose how to respond to situations. How we decide is up to us. Simple…isn’t it?

Israelis enjoying end of recession

10 March 2010
No comments
Categories: Business, Israel

February 2010 saw a spending spree in Israel. Purchases of washing machines, motor bikes, fridges and cars all rose in the tens of percentage points.

Unemployment is on the way down. Clearly, there is more money around.

Economists always worry about a consumer led boom. Fortunately, there are other encouraging signs in parallel to these spending trends. For example, state revenue from taxation was up over 7% in January in real terms.

As for inflation, the overall pattern is seen as downwards. And even better news is that the current governor of the Bank of Israel, Stanley Fisher, is expected to receive and accept an offer to remain for a second 5-year term.

The one blip seems to be an externality, out of Israel’s control. As the Bank of Israel stated its latest survey, “negative developments in some European countries with high deficit/gross domestic product and debt/GDP ratios” posed risks to positive global growth trends.

Women in Israel

8 March 2010
1 Comment
Categories: Business, Israel, Palestinians

It’s International Women’s Day, and the stats come rolling out. In Israel, we read that only 12.9% of CEOs in leading companies are women, up from 8.4% just 2 years ago. In the army, nearly half of the lower officer ranks are filled by women, roughly commensurate to the gender proportion. By the level of Brigadier-General, only 3% are women.

Good? Bad? Getting better? Better compared to others? However you look at it, there is still much to do. And that comes from a country, which was one of the first to have a female Prime Minister. And but for a few thousand votes, a second lady, Tzipi Livni, was almost installed last year.

Clearly, society has much more to learn. There have been 3 major rape case in as many months involving females still at school. The most recent incident concerned students from a well-to-do neighbourhood. What has not been established is if the number of incidents has increased in recent years or if it is case that more are reaching the attention of the police.

By way of comparison, a women’s rights group in Gaza has documented how females are frequently denied their inheritance. The Palestinian Independent Commission for Human Rights has consistently reported on the abuses of female rights, rapes that have gone without investigation, family honour killings, and more.

An interesting way forward came to light last month. There was a competition for the most sexist Israeli adverts of 2009. The implication was that the ads were of poor taste. If that message gets through to more and more people, then Israel will continue to break down the social gaps between the two genders.

A quality proposition (2)

7 March 2010
No comments
Categories: Business, Israel

Last week, I wrote about the advantages of providing a quality proposition. Be it on behalf of your client or an immediate superior, we are constantly being asked to provide solutions / products / services that have a value and a significance. We cannot rest on past successes.

A few days later, I attended the fourth annual conference of “Techshoret“, Israel’s premier conference for technical writers and communicators. On the face of it, this could be just another meet-up for a professional group.

What these people point out to whomever will listen is that they write the PR material for sales teams. They write the software manuals for tech, concocted by goofy engineers. They are asked to do the impossible – convert convoluted descriptions into a text that can be understood by dummies.

And in a country like Israel, where the sales of high tech products and services drive the economy, that is important work. Except…..

Except that increasingly, technical writers are perceived as having an admin value. They do not create nor sell. Therefore, they do not create revenue, correct? Couple that with the fact that there is increasing competition from India and from China, and the local industry could be in for some downsizing.

There are ways around this. One solution is pioneering new platforms. For example, STE was discussed at the conference.

A more interesting approach was given to me by one of the participants. For him, technical writing is not just finding a method to explain something complicated. He is directly involved with part of the sales team. In parallel, he is associated with the final presentation of his writing, the printing and its distribution.

In other words, his company allows him to be more integrated in the whole sales cycle. His skills and his knowledge combined cannot be outsourced too readily.

There are lessons here for others who find their jobs under threat. There are implications for those who feel that their own compact services are being ignored by others. Find ways to give more, …..and you will also probably find out how much more you enjoy your work.

The true meaning of delivering a “quality package”

4 March 2010
1 Comment
Categories: Business, Israel

Speak to a sales person – in America or China, in hightec or spare parts – they all offer a “quality product”. Oh yes? Well, so did I, didn’t I? And then I was faced by a situation where I had to ask what that really meant.

The truth hurt. And now…..

This week, a elderly friend of the family passed away. His brother had died about 3 years ago. At that funeral, he was eulogized by one of his sons, who spoke about his father always delivering a quality service to his customers. I looked at the wonderful but grieving family, and I realised that this small statement had also extended to his home life, to his works of charity, and to many other spheres.

Surrounded by an open grave and many mourners, I found myself feeling contented momentarily. I too give my customers a good deal. Just like the deceased. Just like the man, who all admired. And then, “it” hit me. I was nowhere near his league.

I will not put on record what my faults were. But it ain’t fun asking yourself painful questions. Would I want to receive my own service? Can I honestly justify the payment structure? Have I truly listened to what the customer needs or is it more a case of shutting them up? And there were many more like that.

Some issues I got right. Some needed quick mega changes.

I will write that what I offer now to my customers are clear deliverables, which can be measured and tracked. if teh potential client does not make sense, I walk away. Sales have progressed positively since then.

As a word of personal comfort, I realised that I was not alone. No shortage of examples to quote. In Israel, the phone service, Bezeq, had a monopoly on most services. You grew up knowing that you had to accept what every you got. Today, competition on internet and other channels is rife. Bezeq advertises heavily, but you feel that they are still trying to erase a stigma established over a generation ago. I use them as litle as possible.

How about one of Israel’s medical funds, Clalit. They have just outsourced the supervision of all of their suppliers. And the result is that suppliers now have to pay the new company for joining the supply chain, as well as “invest” in the new computing system! Talk about a scam, which will eventually reflect back on the fund.

Or about Israel’s solitary toll road. They ask you to take out a subscription, which will save money. Great. Most of that saving is then lost as you pay for a package to be sent in the post. In a few years time, another road will be built, and then they will start to advertise like Bezeq today.

Alternatively, Bezeq, Clalit and others around the world can offer sincerity and quality. They can build up client bases that will not abandon them readily. Quality and reliability produce long-term and repeat customers.

How healthy is Israeli biotech?

3 March 2010
No comments
Categories: Business, Israel

Israel’s biotech sector has long been regarded as a world leader. Teva and generic drugs, Given Imaging and miniature cameras, nanotech emerging from Israeli universities – are all signs of great things still to come.

Tuesday saw the launch of a Biomed or health care index on the Israeli stock exchange. Initially valued at over US$2 billion, and worth 2% more after the first day’s trading, the index is comprised of over 40 companies. Three firms, Compugen, GI and Kamada are responsible for almost 30% of the value.

Also this week, two of Israel’s biotech giants have announced a merger. “Clal Biotechnology Industries Ltd. (TASE: CBI) today announced that it will acquire Biomedical Investments (1997) Ltd. for NIS 84 million in cash, shares and warrants.” The rights’ issue for Intec Pharma, a drug delivery company, was oversubscribed. And yet another firm, InsuLine, is considering a launch on the stock exchange.  

All very encouraging. What I look forward to is hearing more about companies emerging from the country’s successful incubators. That news is in short supply at the moment.

Healthy signs from Israel’s economy

2 March 2010
1 Comment
Categories: Business, Israel

IKEA is about to open a second store in Israel, building on the phenomenal sales in the original shop. Ben & Jerry’s will invest over US$2 million in an Israeli productions facility. H&M is following GAP, by opening up in Israel.

Israeli consumers are reflecting other aspects of the economy. For many sectors, the worst of the recession is behind them.

Positive stats abound. Unemployment is now down to 7.4%. In the last quarter of 2009, commercial exports rose by 8.9% on an annual basis. For the 3 months November 2009 – January 2010, sales at chain stores climbed 7.8%, again on an annual basis. And the stock market continues to climb.

As ever, caution must be urged. Israel is dependent on overseas economies, such as the UK, which still faces an uncertain financial future. Anecdotal evidence suggest that there is a slowdown in the activity of start ups, specifically their ability to conduct further r&d. And the shekel remains uncomfortably strong against the dollar, hurting the profitably of exports.

Israel’s economic leaders still have their work cut out for them.

How to get people to invest in your idea

1 March 2010
No comments
Categories: Business, Israel

I continued to insist and the entrepreneur finally gave in. “All right. I will write a proper business plan.”  But then he really became annoyed, when I would not commit to forward it to an investor.

The reason? Because few inventors know how to present properly. And even less understand what goes into a really good business proposal. Until my insistence had got the better of him, my contact had felt that 4 badly photocopied pages with some pictures and technical explanations (of a great idea) would suffice. No!

Let’s quickly examine this point . Inventors know how to create – it is wonderful talent that I can only admire. From my perspective, it looks like a simple game for them. Similarly, good business plans are also a skill – the difference is that many feel that all it takes is the ability to sit down and churn out 20 pages with a few financial numbers.

No, again! Bluntly, a business plan is all about telling a prospective investor in a concise and simple (and truthful) manner why they are going to make a lot of manner very quickly. The punchline is in the the first 2 – 3 sentences.

By definition, that puts your average entrepreneur at a natural disadvantage. There is little room (or patience) for their rambling explanations about their wonderful invention – be it software, wires feeding into a medical device or a mobile app. ROI rules the waves, not clever but bewildering explanations, which merely cater to the founder’s ego.

An IIB colleague, Siu Ling Hui, has summed this up very eloquently in her latest newsletter. Her four page description of what is needed in a business plan is one of the clearest I have read. And she gently inserts a very telling piece of advice.

It’s all about striking a fair deal for both the business entrepreneurs and the business investors….Would you be prepared to invest in the business under the proposed terms of your offer?

I probably meet about 2-3 great new ideas every month. Very few sound genuinely convinced by their own commercial models. Yet, most are deluded by a belief that an investor will be won over by the wonders of the tech. For the third time, “no”!

Palestinian economy – new perspectives

24 February 2010
No comments
Categories: Business, Israel, Palestinians

Go to Gaza. Visit a village in the West Bank. You will find people living in poverty, especially compared to most OECD population centres.

Then ask yourself where the money has gone and you will start to find some unusual answers.

Let’s start with Israel and Egypt’s blockade of Gaza. Whatever the sense of this policy, the fact is that Gaza is not short of food or commodities. First, most commentators accept that there over 500 smuggling tunnels available, of which around 100 are in operation at any one time.

To illustrate the effect of these supply routes, according to an article in Hebrew by Gideon Eshet in Yediot Ahronot, the price of cement is lower now than before the blockade. A liter of petrol costs approx 2nis (6.4nis or US$1.70 in Israel), with one shekel going to Hamas “admin costs”.

That the Palestinian Authority (PA) and Hamas leadership are awash with cash is not in doubt. This blog has reported on occasions of the corruption endemic amongst much of the respective leaderships. In a legal settlement last year in America, the PA agreed to pay up to US$200 million in damages. Where did the money come from?

In Gaza, Hamas resorts to cash smuggling as opposed to the printing of money. On the West Bank, controlled by the PA, the World Bank (through Western taxpayers) has been paying for water and electricity bills.

And what about the lack of electricity in Gaza? It seems that the power was paid for by the EU, which was supposed to pay the money to Hamas. In addition, Gaza residents are paying to Hamas. But Hamas does not always pay the supplier (which is mainly….Israel). Thus, every so often Israel reduces the supply. And now even the EU is demanding greater accountability from Hamas, which in turn shouts “oi gevalt” insults against European and Israeli hate crimes. Sic!

All this goes to explain the economic contradiction that Palestinians have relatively high expenditure levels but low GDP.

It is time to move past politically correst slogans. Time for greater transparency. Time for Palestinian leaders to start looking after the financial pockets of their own people.

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