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Afternoon Tea in Jerusalem Blog

In addition to my work as a business coach, one of my interests is blogging about life in Israel. This is a country full of contrasts – over eight million citizens living in an area the size of Wales. You can see snow and the lowest place on the globe in the same day. Although surrounded by geopolitical extremes, Israel has achieved a decade of high economic growth. My work brings me in contact with an array of new companies, exciting technologies and dynamic characters. Sitting back with a relaxing cup of strong tea (with milk), you realise just how much there is to appreciate in the Holyland. Large or small operations, private sector or non profit, my clients provide experiences from which others can learn and benefit.

How Israel coped with the credit crunch

6 December 2009
1 Comment
Categories: Business, Israel

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.

Observations on the Palestinian economy

4 December 2009
1 Comment
Categories: Business, Palestinians

Until the onset of the second Intifada in 2000, the World Bank considered the Palestinian economy as one of the fastest growing economies on record. Years of suicide bombers, Israel restricting labourers entering the country, incursions into Gaza and more had left the Palestinian territories broke.

In the past year or so, it has been accepted that violence is down. Israel has removed dozens of roadblocks. Palestinians are seen back in the Israeli workforce. Have these changes combined to give an economic boost?

There is plenty of anecdotal evidence to report strong shifts on the ground. For example, independent journalist Tom Gross wrote in the Wall Street Journal that:

As I sat in the plush office of Ahmad Aweidah, the suave British-educated banker who heads the Palestinian Securities Exchange, he told me that the Nablus stock market was the second best-performing in the world so far in 2009, after Shanghai. (Aweidah’s office looks directly across from the palatial residence of Palestinian billionaire Munib al-Masri, the wealthiest man in the West Bank.)

Later I met Bashir al-Shakah, director of Nablus’s gleaming new cinema, where four of the latest Hollywood hits were playing that day. Most movies were sold out, he noted, proudly adding that the venue had already hosted a film festival since it opened in June.

On his own blog, Gross posted pictures, originally shown in the newspaper “Palestine Today”. They show Gaza during the recent Eid festivities. Shops full of goods, a galaxy away from the photos shown by most of the world media.

This information comes as a welcome relief to the stated economic aims of Khaled Mashaal, head of the Hamas political bureau in Damascus. He was quoted on the Filisteen al-’An website as saying: “most of Hamas’ funds and efforts are invested in the resistance and military preparations”

The Wall Street Journal assesses that the Palestinian economy will grow by 5% in 2009, despite the global credit crunch and having to absorb returnees from Dubai. 

Any impact of lower remittances would most likely be softened if those workers find work in the West Bank. With a building boom under way in Ramallah and other Palestinian cities, fueled partly by international aid money totaling $1.7 billion in 2008, many returning from Dubai are finding jobs.

Innovator’s DNA – has Israel discovered the code?

3 December 2009
1 Comment
Categories: Business, Israel

“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?

5 healthy stories from Israel’s economy

2 December 2009
4 Comments
Categories: Business, Israel

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.

Successful start ups don’t need budgets, correct?

1 December 2009
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Categories: Business, Jerusalem

When looking at the factors which go towards a successful start-up, the importance of a solid vision cannot be underestimated. This enables you, the entrepreneur, to see what resources are required and when.

OK, so you now have a crystal clear picture of what you want to achieve and by when. Fine. It will cost roughly whatever. That can be financed by a bank loan or an investor. Time to start making the phone calls, no?

It’s a that stage you receive an annoying reality check from your spouse. “Honey, shouldn’t you draw up a budget?” And we all know the response. “Oh gee, thanks for your concern (newspeak for ‘keep out of it’), but I am only a start-up. Those excel spreadsheets are not for me.”

Wrong! But why? Because we all need a budget, whether you are a 10 year old kid, stretching your pocket money to the last sweet, or if you are about to invest your savings in an untried project.

A budget is like as a vision. It forces you to think.

When initiated properly, it encourages you to admit exactly what you need and how much the project will cost. In parallel, on the revenue side, you will be forced to justify your market model. Not a pleasant process, but very necessary.

And if you think that exercise was painful enough, get this. Imagine that you have finally spent days on your spreadsheets. You produce some positive figures, which are checked by your ever-supportive spouse. You are relieved and are about to pour a celebratory glass of wine, when you hear a tentative voice from the computer room: “Your cash flow is negative.”

“What’s that? How can it be if my budget looks sound?” you scream, as your glass narrowly misses the laptop. “And anyway, why do I need a cash flow, if I have a budget?”

It’s not back to square one, but more financial thought is demanded, and rightly so.

If you want some tips on cash flow, I suggest you look at this management blog. For future entrepreneurs, I have been asked by WritePoint to conduct a course on “how to start-up a successful business”. For further details, contact Chaya on 02 5716668 or see https://writepoint.com/blog/?p=961

Jerusalem & coexistence – where do they meet?

30 November 2009
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Categories: Israel, Jerusalem, Palestinians

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.

Dubai 0: Israel 1

29 November 2009
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Categories: Business, Israel, Jerusalem, Palestinians

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?

Bank of Israel gets it right

26 November 2009
2 Comments
Categories: Business, Israel

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.

When a rise in interest rates is good news

24 November 2009
1 Comment
Categories: Business, Israel

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.

I want to start up my business, but…..(1)

23 November 2009
1 Comment
Categories: Business

Whether you are a budding entrepreneur or business advisor, we all know that phrase. We feel the trepidation behind the voice. “I have a great idea, but how do I convert it into a go project?”

So the first thing many people do these days is to google ‘how to start up’. And they will invariably hit a site offering 10 key points to make your business a success.

Very useful…or not? Because these simple facts of life often demand that you possess money, work space, a website, and loads of other resources that 99% of start ups do not have. Oops, and back you go to square one.

Looking for a fresh approach, there are plenty of other factors to consider. All they will cost you is a bit of time and patience. And they set you up in a much healthier position.

First, work out your vision; a very clearly defined idea of where you want to be after 12 months and 3 years. Simple? Actually, when many people carry out this exercise fully, they end up asking a lot of very searching questions of themselves and their chosen path of gold.

Even more important is that the resources they had initially thought that were required are way now different. They have changed in nature and in scale. Time and money saved before you start.

Then, once you have understood your vision, summarise it in a 15 second “elevator speech”. If you cannot do that, it implies that you have not worked out in enough detail what you want to do. And that means you are not sure what you are selling. Ouch!

When you have completed these seemingly simple tasks, you will have developed a reasonable degree of confidence in what you want to deliver to the waiting public. So what?

Look around you. Most successful new enterprises have been created by people full of themselves. Obama has used the phrase “yes, we can”. He is only suggesting that all of us can control what we want to achieve.

It is at this point that you are ready to look in on those necessary inputs. The difference is you will know exactly how much you need. The next blog describes the process of evaluating resources.

Jerusalem: hot, holy & a hightech success

22 November 2009
1 Comment
Categories: Business, Israel, Jerusalem

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.

 

 

Israel’s cleantech future

22 November 2009
2 Comments
Categories: Business, Israel

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.

Managing ethnic relations in hospitals

19 November 2009
1 Comment
Categories: Israel, Palestinians

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.

 

How to murder a business – and plead innocent

18 November 2009
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Categories: Business, Israel

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.

Israeli economy records consecutive quarter of growth

17 November 2009
1 Comment
Categories: Business, Israel

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.

What makes for leadership? Israel & cleantech

15 November 2009
1 Comment
Categories: Business, Israel

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.

The “choked” Palestinian economy

12 November 2009
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Categories: Business, Israel, Palestinians

“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.

Israeli interest rate dilemma

11 November 2009
1 Comment
Categories: Business, Israel

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.

Leadership communication woes: Vatican or Israel

10 November 2009
No comments
Categories: Business, Israel

Speak to your customers. Engage your constituency. Sales manager or politician, everybody is trying to reach as many people as quickly as possible. And seemingly, we all know how to do it better than the other; just by quoting the magic phrase “social networking”.

Yup – get yourself a blog and a twitter account and the world will love you.

Even the Vatican is at it. Six weeks ago, Pope Benedictus XVI began to urge priests to exploit 2010 World Communication Day in order to promote awareness of the pastoral ministry. And if you click the link here, you will find a series of announcements encouraging the Catholic Church to use, use, use digital media for the greater good.

So if this is “powerful media”, even significant enough for the Financial Times to pick up on the comment, what about other countries? In Israel, Bibi Netanyahu has a deserved reputation has a good communicator. I have seen him speak several times, and he knows how to control an audience from the opening sentence.

And yet, look how poorly his government has delivered on two key issues. Internally, a new tax was announced on water consumption. The aim was to raise money for new investment in the sector and discourage over usage. The bills have started to come, showing more than a doubling in costs.

Uproar! The public reaction has produced a massive rethink on the grounds of…well, apparently the first rains have been so good that maybe Israel does not need such a tax after all! How’s that for a convincing message to the man in the street?

Or take the debate on the Goldstone report at the UN. Israel had months to prepare for this international PR disaster. The bottom line is that Israel had to enter Gaza, because it was under daily attack – over 10,000 rockets and missiles had been launched from Gaza in under a decade.

No comparable situation in the world? Did Israel dare point out that Saudi Arabia regularly attacks Yemen, killing innocents – this happened again in the past few days. What about the suspected atrocities in Sri Lanka? Or….. and the list goes on. Silence from Jerusalem, meaning the world has nothing to respond to.

The point is that when it comes to effective communications and leadership, the Holy Land may have a lot to learn from the Holy See. Fingers crossed that somebody gets the message?

 

Encouraging Palestinian suffering – a boycott

9 November 2009
No comments
Categories: Business, Israel, Palestinians

In September 2000, Yasser Arafat launched the Intifada. An  immediate result of the security concerns was that Israel ceased to employ 125,000 Palestinians from the territories. 125,000 employees  – well paid compared to similar positions in Gaza and in Hebron – lost their wage packet almost instantly.

9 years later, supporters of human rights are asking British customers not to buy Israeli agricultural products. They intend that such a boycott will bolster the livelihood of Palestinians.

Just as the Intifada saw a sharp drop in Palestinian GDP, which is only just showing signs of a full recovery, so too will a boycott of Israel have an equally devastating effect. How so?

Simple – every day, tens of thousands of Palestinians work on Israeli farms. As increasingly supported by Israeli civil law, their conditions are improving annually. Just as with a decade ago, these are comparatively high salaries. Unemployment in the Palestinian territories is still over 20%. They are unlikely to find alternative jobs.

To take the argument one step further, most of Israel’s agricultural exports herald from peripheral areas, where wages are already comparatively low. So a boycott is going to effect Palestinians, along with Bedouin, Jew, Arab and Christian, all re-entering together the poverty trap.

For some, no work is often leads to the path of extremism, a horrible and useless experience for all sides.

With some irony, it is the British themselves who will also suffer from any such boycott. Aside from being deprived of excellent produce, they will create unemployment for their own folk.

Israel is Britain’s largest trading partner in the Middle East – excluding Saudi Arabia with its sales of oil and purchases of armaments. Imagine how many homeland-based British livelihoods a boycott would threaten! Billions of pounds of trade dumped into the sea, only to be trawled away by hungry competitors.

The hypocrisy of the boycott argument is further exposed by its own advocates. They do not call for an imports on Saudi oil not a ban on the use of cheap toys from China, despite the oppressive regimes. And they disseminate their information by e-mail, when their computers are run on Intel tech created in Israel.

Even the spin lacks credibility. For example, such people claim that Israel syphons off water from Palestinian towns, when the opposite is true.

When a political call for action is based in disinformation and will only wound those it is supposedly trying to help, then others must consider the true motivation of hate behind such a movement.

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