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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Press Release:  Outbreak of Swine Flu in the Gaza Strip

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

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

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

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

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

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

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

The international credit crunch centred around a failed mortgage system in the USA and large, greedy international banks. Israel had been forced to sort out those issues years previously, so faced the downturn with a structurally safer economy.

Still, Israel’s strength lies in an export based system, and the world financial system was contracting. What was the Bank of Israel (BoI) and the Finance Ministry to do?

Professor Zvi Ackstein is the deputy governor at the B0I. In a fascinating interview in this Friday’s Hebrew newspaper, Yediot, he describes how his team responded.

They quickly identified that the shekel was gaining strength, primarily against the dollar. This was cutting in to the profitability of many companies, thus endangering employment. They also noticed that the change in the exchange rate was due to speculation, and not as a result of differences in import / export ratios.

The BoI acted. It deliberately and openly set out to buy dollars. This policy has continued to date. The results:

  • The shekel is slowly beginning to lose value against the dollar, helping Israeli exports maintain their competitive levels.
  • The BoI predicts serious growth of around 4% for 2010.
  • Interest rates will continue to rise, but they are not expected to leap forward under present circumstances.

Me thinks there are some lessons here for the wise folks of the international finance community.

“How do I find innovative people for my organization? And how can I become more innovative myself?”

Thus commences a fascinating read from The Harvard Business Review. The authors ask what is the common link between “visionary entrepreneurs like Apple’s Steve Jobs, Amazon’s Jeff Bezos, eBay’s Pierre Omidyar, and P&G’s A.G. Lafley”. And they come up with 5 skills that set apart such people from us ordinary types.

We found that innovative entrepreneurs (who are also CEOs) spend 50% more time on these discovery activities than do CEOs with no track record for innovation. Together, these skills make up what we call the innovator’s DNA. And the good news is, if you’re not born with it, you can cultivate it. 

Imagine that you have an identical twin, endowed with the same brains and natural talents that you have. You’re both given one week to come up with a creative new business-venture idea. During that week, you come up with ideas alone in your room. In contrast, your twin (1) talks with 10 people—including an engineer, a musician, a stay-at-home dad, and a designer—about the venture, (2) visits three innovative start-ups to observe what they do, (3) samples five “new to the market” products, (4) shows a prototype he’s built to five people, and (5) asks the questions “What if I tried this?” and “Why do you do that?” at least 10 times each day during these networking, observing, and experimenting activities. Who do you bet will come up with the more innovative (and doable) idea?

So what? Well, there has been much talk recently about Israel’s ability to use innovation skills in order to lead the economy away from recession.

Here’s the thing. Israel has not fared well in the past decade with its eduction standards, particularly at primary and secondary levels. And yet, the products of the system are entering economic life well prepared for the challenges.

As I parent, I am amazed. I cannot describe how many times I feel distraught at the lack of homework and poor attitude, sloppiness.  BUT….

But the article says you can learn to be innovative. I can see how the methodology is similar to how my children cope with their projects at school.

Wierd, yet it’s worth asking. Is the breakthrough to finding the code of “innovator’s DNA” hidden by the muck of a failing education system?

As the Holy Land heads off towards Christmas and the cold weather approaches, Israel’s economy is sending out a string of healthy messages.

Israel’s debt-to-GDP ratio has risen only marginally during the international credit crunch. In comparison, other countries like the UK have suffered much worse and will have to pay for their governments’ rescue programmes for years to come via higher taxes.

That macro supervision is encouraging. In parallel, analysts showed their faith in the Israeli economy this week. Bank of America-Merrill Lynch commented that “investors should overweight Israel, at least until the dust settles in Dubai”. The stock market has recorded solid gains for the past 3 days.

On the micro level, Kodak Israel will be hiring new workers. The company is one of several multinationals, such as Intel, Siemens and Microsoft, with succesful r&d centres in Israel. The local branch will be supporting the software development of the Kodak’s preprinting and digital imaging systems.

Foreign investment is also picking up. Pfizer have just committed to a strategic partnership with Protalix, a contract valued at up to US$110 million. Go back 5 years and Protalix was barely a commercial germ in  small industrial incubator.

Dune Networks is a similar story. Founded less than a decade ago and located on an agricultural kibbutz, the company has been sold for US$200 million to Broadcom, a major player in the fabless semiconductor market. This places Broadcom’s level of investment in Israel at nearly US$600 million.

Read the international press, and you could assume that Jerusalem is one divisive city. After all, Jerusalem has been the centre of disputes for thousands of years; 2 destroyed temples, crusades, Turkish rule, 4 different Christian sects fighting today for control of the Church of the Holy Sceptre, different orthodox Jewish groups, and loads more. So, it is easy for editors to play on the theme. 

But if you walk round the city itself, you would have to ask why such drivel is sent to print by respected journalists. Jerusalem actively and continuously supports projects which encourage coexistence.

I recently wrote about Jerusalem hospitals hosting co-projects with Palestinians. I did not mention the sprawling Alyn rehab centre. It has been the saviours of countless lives, particularly young children, from all ethnic backgrounds. 

Alyn’s “Wheels of Love” annual bike ride saw 650 participants from over 12 countries and several religions raise nearly US$3 million. When the bikers returned, many kids and their families, several distinguishable from their different attire, came to meet them.

Sounds too inspiring or Hollywoody, take something more mundane. Israel’s police force has sent a delegation to Northern Ireland to teach their co-professionals about “fair policing models”. 

These are successful techniques, which have evolved over time. Whether it be work in Jerusalem’s crowded streets or patrolling the diverse communities in the north of Israel, the Holy Land has much to teach police counterparts overseas.

Last Thursday night, I enjoyed a wonderful “thanksgiving meal”.  I met up with one of the founders of the Christian Embassy in Jerusalem, which now has reps in dozens of countries around the globe. With other friends, we commented on the new park planned in East Jerusalem, next to several Arab suburbs……..And the list goes on.

Yes. Not all is rosy. In the past 2 months, there have been provoked riots in the Old City. And ultra orthodox Jews have taken to the streets with violence against the police.

But these are not the stories of what is going on daily, the on-going stories of good news. And now you appreciate why good news rarely makes it in to leading media outlets.

Like Iceland, Dubai tried to expand too fast, until boring old reality caught up with it. Sooner or later, people will not finance debt without reward.

Meanwhile, Israel plods along with its mundane officials ensuring that the essentials are done right. Hence, the encouraging growth predictions from the Treasury, the IMF, Barclays Capital and others for 2010.

So why are most Israeli financiers rather amused at the Dubai fiasco? Well, first of all, because of the malicious Arab Boycott, officially Israelis are not allowed to conduct affairs with Dubai. Just speak to tennis player Shahar Peer, who has been banned from taking part in competitions there.

So, maybe the view from the Holy Land is that these guys are getting what it deserves.

On the other hand, business encourages any politicians, including those from Dubai, to be hypocrites. Today’s Israeli press reports of Kibbutz Afikim and maybe a dozen other agricultural companies that have or are conducting commerce in the country. I have a Jerusalem friend, who regularly travels there to go to exhibitions, where he meets other Hebrew speakers. etc etc etc.

Yes, Israel’s wealthy have bought interests in Dubai and will suffer, at least in the short-term. Lev Leviev has a flagship diamond shop in Dubai. Yes, Israel’s stock market will dip temporarily in sympathy with its rivals around the world.

Actually, the most interesting effect on Israel may come through the back door. It is estimated that up to 100,000 Palestinians are in danger of losing their jobs and being thrown out of Dubai. I wonder where they will go?

Earlier this week, I commented on how the Bank of Israel had ignored local pressure groups and fought its corner on behalf of the whole economy. Interest rates were raised by 0.25% to 1%.

3 days later, and the governor, Stanley Fisher, is bathing in praise.

Avi Temkin in the Globes financial newspaper described Fisher as a “light unto central banks”. 

Fischer is simply ahead of other economies, and is blazing a new trail that others will follow in a while. The Bank of Israel Governor has not hidden in recent months his opinion that countries must abandon their expansionary policies if economic conditions obligate and enable them to do so. His latest step is a type of call to all to move in this direction, and a sign to the world that talking about a continuation of expansionary policies for a long period is not accepted by everybody.

Michael Eisenberg, a popular blogger and venture capitalist, notes that Fisher’s term in office will soon be over. He recommneds that Prime Minister Netanyahu must keep him on.

In some ways, the softest and sweetest praise has emerged from the Wall Street Journal. Its headline noted that the interest increase came on the back of an economic turnaround. As I have said several times in recent months, many other financial can only be jealous of such a relatively strong economy.

The signs for 2010 and Israel’s economy continue to look good. Well done, Stanley.

Usually, when a central bank raises interest rates, the sectorial lobbyists press their automatic convulsion button; trades unions, manufacturers, small business groups, and anti-government newspapers.

True the world over, and definitely true in Israel. Just look at the Hebrew press to judge the reactions to the Bank of Israel’s surprise announcement yesterday to raise the inter bank rate by 0.25% to 1.00%.  

In fact, the change is a sign of praise for the economy and those running it. It shows that the country is becoming more worried about possible inflation and public sector deficits rather than the recession. In other words, Israel’s economy is growing.

There is much statistical and anecdotal evidence for this – eg, surveys of the labour market. One strong indication is what has been happening on the Tel Aviv Stock Exchange (TASE). A 9 month survey to 30.9.09 shows how shares are shaking off volatility and recording deep gains.

To quote from part of the report:

In August TASE saw its first equity IPO in eighteen months. Foreign financial investors injected $0.9 billion to TASE.
Prices of corporate bonds, which had declined in the closing four months of 2008, staged a comeback as well during the period under review. In the corporate bond market mainly banks and a number of large companies raised capital in public offerings and private placements to institutional investors.

TA-25 and International indices – 1-9/2009
In USD terms

The TASE has been expecting higher interest rates for some time. The fact that they have not appeared for 3 months will not arrest a further rise in prices for the near future at least. Let us hope that the investors are showing their confidence in the economy and not just fuelling another market sell out.

If you were to judge by the reporting of the international media, Jerusalem today is a city waiting to explode.

The Israeli government is accused of building on Palestinian land in Gilo. Actually Gilo is a full suburb of Jerusalem with over 30,000 residents, and the Jerusalem Municipal Planning Committee has also granted permits for 5,000 new apartments to be built for Palestinians in the east of the city.

In parallel, thousands of ultra-orthodox Jews have been demonstrating violently against the opening on the Sabbath of the local Intel factory.

The fact is that commercially, Jerusalem is one on the most important facets of Israel’s hightech community. And this statement does not just rest on Intel’s existing complex in the city. For example, this coming week, the corner-stone of a new IDPj factoy will be laid, which will employ a further 200 locals.

According to the BioJerusalem website, “nearly half of the biotech research and half of the medical research in Israel is conducted in Jerusalem at the Hebrew University of Jerusalem and its affiliate Hadassah Medical Center”. In fact, down the road from Intel, a new nanotech centre is being completed.

Israel’s capital city hosts many of the world’s leaders in solar energy. LUZ began its history in Jerusalem. GSE has created a new technology for solar panels. Leviathan (wind energy) and Cequesta (water treatment) lead the way in other aspects of the alternative energy business.

Jerusalem has an amazing biblical and modern history. If left to the ill of extrmists or the simplistic writings of journalist meeting deadlines, the true successes of the city will be lost to the world.

 

 

Bob Ackerman has been around Silicon Valley’s entrepreneur scene for many years. For Bob, Cleantech is the “latest shiny object”, wrapped in a bubble which is about to go pop.

The bubble is being led by overstated expectations and magnified by inexperienced people selling into a fantasy of hope.  That is not a good combination and it is not grounded.  That’s why I don’t believe in investing in clean technology even though there are real opportunities in the space.

Maybe, but not in Israel. Why?

Last week, Israel hosted Watec, the 5th international water and renewable techs exhibition. The Israeli Export Institute estimated that over hundred countries sent delegations to the conference.

It is difficult to estimate the number of deals which resulted from the three days of hectic activity. Formal trade agreements were announced with Wisconsin, California and Australia – to name but three. With my own eyes, I saw one start-up watch, as investors from Japan, Europe and America fought for positions.

Israeli entrepreneurs have consistently proven that Cleantech can deliver on its promises. The country is ranked first in the world in recycling water for agriculture. The Ashkelon desalination seawater reverse osmosis plant is probably the largest in the world. Jerusalem based companies are setting international standards in solar power.

A bubble collapses when commercial promises are not followed with deliverables. Israeli companies have so far managed to convert business plans into dollars. Time for Mr Ackerman to pay (another?) visit to the Holy Land.

There was a Jew and a Muslim and a Christian…it sounds like the start of another corny joke.

Now imagine that you are running a large organisation, where you had significant affiliates of these different religions on your staff. Imagine the special conditions required. Add in that your are located in the Middle East, and you could have the a potential time-bomb on your hands.

By law, the Israeli medical system is open to all, both staff and patients. Some years ago, when my teenage son was hospitalised for a few days, 50% of the ward that week was not Jewish. And the doctors were offering a mixture of languages and cultures.

The experience of Israeli hospitals offers a wonderful message for the stop-start peace process.

For example, Haifa’s Rambam Health Care Campus hosted a day-long seminar this month on oncological care for 30 doctors, nurses and graduate nursing students from Bethlehem, Ramallah, Jenin, Hebron and other West Bank cities.

Yazed Falah, who oversees the coordination between the PA and Rambam said that the seminar was part of the ongoing cooperation between Rambam and the Palestinian Authority. “We initiate activities and seminars like this all the time because we are obligated, on a human level, to help sick people regardless of politics.”

Delegation member Dr Sumia Saij, instructor at Al-Kuds University in Tubas, spoke on the reality in Palestinian Authority hospitals. “In many cases, we don’t have the qualification, the budget or the tools to give medical care to patients who arrive at the hospital. Seminars like this allow us to….reduce the gaps between hospitals in the PA and the more advanced facilities in Israel.”

Every week, some 50 children come to Rambam from the PA to receive oncological and hematological treatments. But this is not an isolated story.

The Sha’are Zedek hospital in Jerusalem last week hosted the Middle East Cancer Consortium and the  Palestinian Al Sadeel Society for a 3 day seminar. The hospital has a number of joint programmes running with different ethnic sectors.

And so the list goes on. To find equivalent projects initiated from the arge Shaati hospital in Gaza has not been possible. Similarly, two Israeli doctors were “disinvited” to a cancer research symposium in Egypt, after their national origins were verified. (Although they were later asked back following strong external representations, they declined). 

It can done if you want to make it happen. Israel has repeatedly shown the way. Time for others to join in and share the benefits.

 

I have just read a fun article, describing 10 “best” ways to murder your own business.

But just like any crime scene, future assassins learn from the mistakes of others. They plot their own acts of doom, hoping that they will cover all their paths and never be caught.

Interestingly enough, many businesses close down due to the mistakes from top management, and not because of market conditions. Yes, that applies to Enron and to your local speciality restaurant.

A few weeks ago, I encountered one such act of attempted murder.

The setting was a small office in central Tel Aviv. The business had established itself over approximately 5 years, but was stagnant. The CEO, an experienced man of commerce, argued that he wanted to grow though increased export sales. Fair enough.

  • I then proposed a series of possible action items, all of which were rejected, because he would be too busy to attend to them. I argued that after some initial explanations, the new tasks would be my responsibility. NO! He could not let that happen.
  • I suggested that he should let me bring in extra sales. NO! it would take too long.
  • I offered to secure a loan at good conditions, thus allowing him to recruit more resources and free up his time. Silence! Not even a “no”.

As you can imagine, the conversations did not lead into a long-term business relationship.

The CEO did not get it. He is a man who has founded and built up a small successful business. He will be an essential part of its future achievements. However, for the moment, his strategy is only satisfying his own need for importance rather than the revenue stream of his pride and joy.

He has created a silent and blunt murder weapon that he is in close danger of applying. But from his perspective, he is innocent of any wrong doing.

Israel is continuing with its strong emergence from the recession.

For the second quarter running, GDP grew (2.2% annualised). Private consumption – often a euphemism for the standard of living – shot up by nearly 7%.

Encouragingly, the key components driving the improvement are exports (5%) and investments in fixed assets. If much has been written about Israel and its propensity to innovation, here is further proof of that concept.

I still offer words of caution. Unemployment has yet to see a serious change, keeping back many sectors of society. And the Bank of Israel continues to face a difficult juggling act between inflation, exchange rates and the rate of interest.

CNBC television recently featured Israeli cleantech. A global leader in the fields of desalination, non-fossil cars, desalination, solar energy and more.

The question is how does a country of 7.5million people learn to provide electricity for most of California, a top 10 global economy?

A previous CNBC story pointed to many structural aspects within Israel, which has enabled the country to be one of the first to emerge from the global recession. But to be a leader! That implies a reservoir of talent, gushing out in to a new arenas.

Academics have often sought to identify what makes a good leader. A classic pitch from the Harvard Business Review recalls that “leadership is about coping with change.”

Dr Robert Brooks is one of my favourite writers on the themes of self-esteem and resilience. In his latest article, He recalls new work at MIT, which is now emphasising graduates who will also becomes leaders. And I quote:

Bernard Gordon, a 1948 graduate of MIT whose $20 million gift helped to launch this new program, is acutely aware of the need to nurture people skills…….. “Most new companies fail despite assembling a group of smart engineers because no one is comfortable shouldering the responsibilities of leadership”.

Gordon’s observations about the skills required of engineers parallel those posited by Goleman under the labels of emotional and social intelligence as do the following list of abilities that the leadership program at MIT is addressing:

  • Ability to assess risk and take initiative.
  • Willingness to make decisions in the face of uncertainty
  • Urgency and the will to deliver objectives on time in the face of constraints or obstacles.
  • Resourcefulness and flexibility.
  • Trust and loyalty in a team setting.
  • Relating to others.

Many of these six characteristics can be found in typical Israeli. No; empathy and interpersonal skills are not acceptable traits in Jerusalem or Tel Aviv. But it is a country that has learnt to deal with risk and uncertainty, facing the challenge of resource and geopolitical constraints. And the way to accomplish these things is through teamwork.

This coming week sees Israel’s premier exhibition for the year; Watec. Thousands of delegates will arrive from overseas to learn for themselves how the Holy Land is leading the world in water conservation and similar techs. 

Just imagine how far further Israel could be if she alos excelled at interpersonal skills.

“Israel is stifling the Palestinian economy by implementing a closure regime, and blocking it from developing export markets.”

This often-repeated rhetoric of Palestinian leaders was explained yet again by the former Palestinian minister of national economy, Bassem Khoury, speaking openly in Jerusalem this week.

To sum up the argument: Israel’s restrictive military procedures in the West Bank and around Gaza hinder freedom of movement. Until that issue is dealt with, there can be no true economic progress.

As an Israeli, I can say, and read the whole sentence: Khoury is correct  but only in a very limited context of political spin.

Look even the Israeli government knows that roadblocks etc do not help Palestinian society. Minister Silvan Shalom reopened the Jalama crossing this week, north of Jenin. He described how:

The opening of the Jalama crossing, like other actions we are promoting, contributes not only to creating trust and understanding, but [is an] important engine of growth. Opening the crossing to vehicles will enable the movement of dozens of cars and trucks between Israel and the city of Jenin every day. Opening the crossing will promote the Palestinian economy by bringing in Israeli Arabs as consumers to Palestinian cities.

But from here on, Khoury’s argument is not just shallow, but false to the point of dangerous. Why?

  1. The World Bank has confirmed that until the violence of the Intifada commenced,  the Palestinian economy was one of the world’s strongest between 1968 and 1999. As the violence has decreased, stats show that growth is edging back towards previous levels. No violence means no restrictions of movement. Simple and undisputable.
  2. Even Khoury acknowledges that the current fiscal crisis is due to “a 55% drop in the foreign aid as compared to 2008”. According to the World Bank reports, most of the unfulfilled promises historically come form members of the Arab League.
  3. And if Khoury wants greater cooperation, how about letting Israelis trade openly with Palestinians. It is an accepted fact that in most of the territories, Israeli products are banned, while Palestinian agricultural products are found in Israeli stores.

When the global recession took hold in September 2008, the Israeli commercial community as a whole took the view: “Let’s find a way to get out of it, and not wait for others to help us”. There is a message there for the country’s neighbours.

As Israel emerges from its recession, more problems seem to lurk round every page of economic data.

The latest set of stats show consumers have returned to the shops in droves. Compared this time last year, October 2009 saw a 25%+ rise in the number of TVs and washing machines purchased. Ditto for cars etc, etc, etc.

Put that info together with rosy GDP predictions for 2010 and new incoming tourism,  things are looking pretty. More room for an upward move on interest rates?

And yet, maybe investors know better. The sharp increases in the stock exchange have come to a halt. Local exporters are deeply unhappy at the shekel’s strengthening against the dollar. Unemployment moved up sharply in September. 

Above all, the budget deficit has hit a record high of 39.8b shekels over the past 12 months – a sad high to report. This will fuel fears of future inflation.

Each of these factors pull in different directions on the Bank of Israel’s decision regarding the level of the rate of interest; keep it stable for now or continue to drag it upwards.

Exiting from a recession brings its own conundrums. Most other countries, who are behind in the economic cycle, should beware.

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"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