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.

The Pope and the Israeli Prime Minister seem to be running a competition. Who can make the most silly mistakes each day in Jerusalem, and then get caught out in the press.

Meanwhile, quietly, professionally, away from the cameras, Israeli commerce is getting on with the job of creating wealth for the country.

Item 1: Forbes has named 13 Israeli companies in its annual rankings of the top 2000 global public companies. Not bad bad for a country of 7.4 million people and stuck in a war zone, especially as America took over 25% of the placements.

Item 2: Seeking to emulate those 13 firms, 14 Israeli start ups have been named by the prestigious magazine, Red Herring, in a top 100 of most promising companies in Europe and Asia.  Again, a stunning achievement considering the meagre resources of the country and against such strong competition.

Item 3: Nilit has just concluded its fourth overseas acquisition in as many years, paying out US$20 million for an American company. I can personally vouch for a number of other Israeli manufacturers who are cash rich and are scouring potential M&As very seriously.

A lot of money and very little talk. A message for the busy politicos?

Yesterday, Pope Benedictus XVI commenced his vist of Israel, arousing a certain degree of disappointment.

Off stage, Israel’s Prime Minister, Bibi Netanyahu, was opening himself up for criticism. Ostensibly, Bibi was in Egypt, talking with Mubarak. However, the much of the local media was concentrating on his capitulation of his economic plan.

Step back for a moment and recall. First, Bibi’s election promises included lower taxes. Second, he has appointed a finance minister who will play second fiddle to Bibi’s role of economic supremo. Third, as usual in formulating a new budget, the Finance Ministry leaked details of cuts and frightening new measures.

And what are we left with? Well, according to the papers, cuts in child allowances, hospital payments, less tax breaks for working women, etc have all flown out the window. Meanwhile, VAT could go up by 1%, a direct burden on the poorer members of the community.

It is not clear if Bibi buckled to the pressure of interest groups like rich trades unions or industrialists. However, even during his own successful term as Finance Minister some years ago, he was also known to cave in.

Which brings me back to Bibi’s meeting with Mubarak. And in a few days time with Obama, and then with the Palestinians. Bibi’s skillful oratory is not in doubt. It is his ability to deliver a safe economy and …….well long-term overall safety that concerns me more. It is time for leadership.

Pope Benedictus XVI arrives in Israel today, Monday. What’s the fuss?

Last night, Tel Aviv traffic came to a halt for several hours, as 50,000 people turned up to watch Depeche Mode in concert. And as I write, crowds as surging towards Mt Meron near Safed to commemorate “Lag Ba’omer” the cessation of a plague that killed thousands of rabbinical student nearly 2,000 years ago. The expected attendance is estimated at 500,000.

As for the Pope, how many can he count on? Officially, there are around 150,000 Christians in Israel, the one country in the Middle East with a growing Christian population. Most of these are from the Eastern Orthodox groups. Catholics are few in number.

The Pope’s visit is important for a number of reasons. It is not just that he is expected to make some definitive statements denouncing anti-semitism. His delegation will push to seek control of Vatican owned property in sensitive areas, like the Old City of Jerusalem. How all this will help to further the continually awkward Vatican- Jerusalem diplomatic loop is difficult to assess at this early stage.

One thing is clear. At best, the Pope will draw with him around 15,000 pilgrims – and no doubt others will follow later where he has lead. But these numbers are still insignificant compared to other mass events in Israel. (Pun not noticed, until after it was written – MH).

The Pope will learn that Christans are free to pray in Israel, something he will struggle to find elsewhere in the region. However, he has much more work to complete if he wants to secure a greater role in the Middle East for the Vatican.

FACT: Israel is one of the world’s leading countries in developing new agricultural techniques.

FACT: Israel has developed a string of technologies for purifying water without chemical treatment.

FACT: Israel suffers from a drought, cutting deep into its own farming output.

Last week, I visited “Agritech”, Israel’s annual show, displaying its latest techniques in the agricultural field – pun intended. Clearly visible were the strong delegations from India, Honduras, Chile, Australia, Brazil and elsewhere. The event is a quality circus on the exhibition calender.

It would take too long to survey all that was on view. I stopped off at Aquatal, delivering sweet drinking water from the liquids in the atmosphere. A research team, led by the Volcani Centre,  presented a thermal imaging solution for mapping the water status of crops.

And it is in water technology where the world has chosen to follow Israel. It leads in drip irrigation, water recycling, and desalination techniques. There are signed agreements with the Beijing, Melbourne and Madrid Water Authorities.

I am curently associated with a company that has perfected an efficient green solution for purifying liquids – both for local authorities and industry (food, chemical and other sectors).

So the question is: Why does Israel have a drought? Why does it lack enough water to “feed” the River Jordan and the general populace? For all these wonderful capabilities, why has the country not overcome the low rainfall levels?

And the answer: Well, I find that Israeli politicians love to talk. They jabber on about the economy, the Palestinians, and football, even when they have no real idea what they are talking about.  Turn to the environment, they are also invariably ignorant, but here they need to make real decisions which make effect interest groups. So why bother?

 It is only the future that will suffer, and thus no need to trouble the voters of the present. Politicians and civil servants drowning in their own selfishness, as the land cracks open around them.

Like many, I glean my info from many sources.

I am reluctant to name names, but every so often it is worth reconsidering a cardinal rule. And today, I am going to direct you to the work of my good friend, Seth Vogelman.

For some years now, Seth has been compiling a fortnightly survey of economic activiy in the Middle East, with a special emphasis on Israel. The latest work is posted at https://www.atid-edi.com/index.php/Fortnightly.htm ,as well as on his facebook.

Seth is a rare breed, with access to contacts in many commercial places which the average Israeli has not even heard about. The analyses are sharp, if not always to the taste of everyone. The range of opportunities posted is possibly unique. He drags in many untouched markets.

Happy reading

I have previously written that part of the strength of Israeli management psyche is  out-of-the -box thinking. It is why Israelis are renowned for bringing through new technologies against the odds into the marketplace.

So what happens when the company is up and running? What happens when Mr Israeli CEO has to start selling? Where does this creative thinking lead him or her?

Here comes the down side of Israeli character. In Hebrew, it is called “magi’a lee”. A rough translation is: “I deserve it”.

What do I mean? For much of the pre state period and for 3 decades afterwards, Israel was run by socialists. The state looked after you. You could rely on the state, because..well, because you deserved it for all those taxes you paid.

On top of which, Israel faces a constant existential threat. Israeli is in danger, “so at least buy our great goods”, we shout to everyone.

In commercial terms, this has a naive and childish parallel. So many new start ups outsource their sales efforts. It is mostly paid for on the basis of “success fee”. The contractor sells the products and services, which deserve to sell well, and the client will pay a large commission. In other words, work for us for several months, fork out all the expenses for that period, and then we can make you rich…maybe.

As I learnt way back at university, if you pay peanuts, you get monkeys. The so-called success fee provides no commitment to the sales team, which invariably gives up after a while.

The result – everyone is a loser!

And this is one prime reason that for all of Israel’s wonderful tech, so much stays in the country.

As for Israeli management psyche, it becomes a double-edged sword. Great for getting you going, but potentially a mother of company-destroyers. And only when Israeli CEOs resolve this conundrum will the economy’s structure take a major leap forward.

Over the past decade or so, Israeli management has earned a deserved reputation for innovative management. With limited natural resources, the country is known as a world leader for new techs in bio and nanotech, as well as IT and telephony.

Why? Well, the country has had to think quickly in order to survive. It is part of the national pysche.

Consider the origin of the phrase “out of the box thinking”. The idea is to resolve a problem from an unexpected direction. Israelis excel at performing unusual tasks.

To illustrate the point, I recall an anecdote told to me by a former naval officer and now leading market analyst for a successful high tech company near Netanya.

Years ago, he was stationed at a UK naval port on a training mission. They received an evening off to watch TV. 2 sets were available, one to watch the Eurovision Song Contest and one permanently set on a different channel. All the graduates poured into the one room. All?

All, except a few Israelis. They let everyone settle in a crowded room, moved next door, closed the door, and promptly switched the TV station to…the Euro contest.

Some minutes later in walked one of the senior members of staff. Initially worried that they had blotted their books, they were soon reassured. He burst out laughing, and I quote: “No wonder you guys always win your wars.”

So why does Israel have a lot of successful start ups? Because in order to succeed, you need to bulldoze your way through or around the numerous and varied obstacles. Israelis possess that capability.

I recently came across a wonderful book: “Not In My Name: A Compendium of Modern Hypocrisy”, written by Chas Newkey-Burden and Julie Burchill, and published by Virgin Books.

The section on Israel was written by Burden and can be found at: https://www.oyvagoy.com/israel. The author asks a challenging question.

The anti-Israel brigade would have us believe that the motivation for this vitriolic hatred of Israel is a genuine, compassionate concern for the fate of the Palestinian people. But do they really care about the Palestinians, or is their compassion somewhat selective, to put it politely? In reality, are they only interested in Palestinian suffering for as long as it gives them an opportunity to bash Israel?

As Burden notes: When Palestinian women are stabbed to death in “honour killings” across the West Bank and Gaza Strip, no anti-Israel Westerners lose a single moment’s sleep on their behalf.

So what?

Well, yesterday, I read about a new and challenging extension of this hypocrisy.

UNRWA was set up 60 years ago to help Palestinians and their social problems. It has a standing annual budget of over US$400m, which is regularly topped up for special campaigns. European taxpayers are particularly generous donors. Even since Israel left Gaza in 2005, UNRWA has still to resettle even one refugee outside the camps.

Israel and her supporters have been consistently critical of UNRWA and its increasingly political role. The Lindsay Report is the best documented comment to that effect.

In return, UNRWA through John Ging, its chief rep in Gaza, has never pulled its punches. The most notable occasion was during the January war in Gaza, when UNRWA claimed that Israel has deliberately shelled a school killing 42 civilians. UNRWA is proud of its record of supporting schools, funding school books, founding clinics and far more on behalf of Palestinians. It openly accepts that Hamas is its partner in Gaza, and works with this proscribed organisation.

And yet: Well, we all know that the 42 turned into 12, and 9 of those were Hamas operatives. Christopher Gunness, an UNRWA spokesperson, had to censure Hamas for stealing aid during the war. Ging has just called on the Western and Arab communities to deliver on its aid pledges to Gaza.

And now for the hypocrisy. For all the bending over backwards to help the Palestinians, often deliberately cooperating in tandem with militias, Ging has been censured by Hamas.

In effect, on 16th April, the Hamas paper “Felesteen” called on Ging to resign, as he opposes the “resistance”. His crime is his efforts to work within UN ethical standards. In other words, the man whose job is to funnel millions of Western money into Hamas projects is now seen as a traitor, because he is calling for transparency and opposing some of the violent methods.  

Fortunately for Hamas, Obama is currently trying to see it included in a new Fatah government. European politicians are also queuing up to visit its leaders, as they refuse to even consider recognising Israel. Phew, no hypocrisy here, either.

This week, Israel marks two important days in the calendar; Remembrance Day and Independence Day.

The former honours 22,437 civilians and members of Israeli security services killed since 1948. Rabbi Ari Kahn noted in his article on facebook that one of the strongest blessings that he can offer to soldiers and to all Israelis is that “they return home safely along with all their comrades, and live normal lives …..” .

When you balance those remarks with current trends in the peace process, they take on greater significance. President Abbas appears to be retreating on previous commitments to recognise Israel. In the words of an official from the Israeli Foreign Ministry: –

The Palestinians cannot negotiate for a two-state solution where one is Palestinian and the other is Palestinian-to-be. This is essential; it is the choice between ending the conflict or failing to end the conflict.”

Yes, Israelis are still very much in need of the blessing of peace. The IDF Chief of Staff, Gabi Ashkenazi commented this week how: 

Even after dozens of years of struggle, we have still not lost our hope to live by your side in peace and mutual respect; but I don’t recommend that anyone tests the strength and determination of the IDF.

In direct contrast, as we review Israel’s celebrations for her 61st year, we can see just how much President Abbas has to learn from his adversary. The official event to start the 24 hours of celebrations saw the customary participation of all parts of society, including Druze and Bedouin. Pluralism at its best.

But it is more than that. Israel is a beautiful country. In the winter, you can ski on the Hermon, and then a few hours later you can sunbathe in Eilat. In Jerusalem, you can almost literally walk back thousands of years and touch elements belonging to the First Temple Period. Israeli technology is literally universal, as she has become one of the few countries to possess satellite capabilities.

Israel’s modern history is replete with triumphs, which others would be proud of, but have difficulty in bringing themselves to acknowledge.

Israel has many blessings to offer other peoples and nations around the globe. All are welcome to receive them in peace and with good health. They too have much to celebrate from Israel’s 61 years of independence.

The Israeli Finance Ministry is preparing a rolling budget for a 20 month period. Great – should cut out the usual financial uncertainty that would be expected to accompany the 2010 budget, as it would hit the Kenesset debating tables later this year.

But hang on, so what are the brave new measures of this new government?

The press has received leaks re the upping of tax on mobile phones given to employees. Wow! Tourists may be required to pay VAT on hotel bills. Staggering! Increased taxes on petrol. Clearly a sop to the green vote on the backs of the poor.

As for structural changes, well, public housing may be sold off through enhanced use of the financial sector. Again, not exactly earth shattering stuff. And so on.

Bibi Netanyahu has been in office for 2 months. Consider his experience. He is a former Finance Minister and former Prime Minister. And this is all he can come up with?

No strategy. Just a set of measures cobbled together. Vague mutterings of tax cuts delayed to 2010. No help for abandoned rail projects. No kick-start measures for SMEs, still coping with the awful paperwork and credit demands of local banks.

Compare that to the efforts of the Bank of Israel, which is demanding that Israeli banks conduct their affairs with far greater transparency and less recklessness. For example, whatever the outcome over the board of Bank Hapoalim, the country’s largest bank, the industry knows that the rules have been changed for the future. 

And the stock market has responded positively following the BOI’s efforts.

So, why do I write about Bibi and not his Finance Minister? Because the minister is a novice. In this week’s round of discussions with cabinet members over budget cuts, the individuals are being invited to the PM’s office. The Finance Minister is not even expected to be present!

It is too early to give a first term report or hand out marks. But on his performance to date, Bibi is merely dabbling with the economy. His spin has not covered that up. The economy demands more. The people deserve better.

Rainfall in the Middle East has always been an issue. This year, the winter rains in the region have been around 20-25% below average, and that average itself has been in constant retreat for some years.

So when the World Bank issues a report stating that  “Israel extracts 50% more water from the aquifers it shares with the Palestinian authority than it is authorised to do so”, ears prick up.

Double back to a detailed report from the office of the Israeli Water Commissioner. It carefully details the obligations of all sides under the 1993 Oslo Accords, and who has fulfilled what. In brief, Israel has gone way beyond the letter and spirit of the agreements in helping the Palestinians.

It is the Palestinians, who have yet to drill or to operate half the required wells in the Eastern Aquifer. And in the Northern District, they have sunk over 250 illegal wells.

But here’s the killer fact. Over 60% of Palestinian sewage is deliberately not treated. Its run off contaminates into the already precious reserves of water, rivers or lakes.

An internet search will show how loads of NGOs and other pressure groups have sunk tons of resources, research, man-hours, money into deligitimising Israel’s use of water. I personally have had correspondence with such activists over the years. If all that investment had been turned away from hate and ploughed into coexistence, much of the Palestinian water shortage could have been resolved.

How so?

Take Cequesta, a small Israeli company, based just outside Jerusalem. Using environmentally friendly tech, it recycles water from industrial or other use. The systems are not expensive, support the environment and provide a clear solution to populations with water shortages.

Whether it be Cequesta or other solutions, the Palestininas have much to gain from cooperating with the Israelis. They only people to lose out will be those determined to see Israel suffer, whatever the cost to truth.

Today, the world honours Holocaust Day. In Israel, sirens will ring out for 2 minutes to recall the millions slaughtered by the Nazis.

The official name of the day is “Holocaust Martyrs and Heroes  Remembrance Day”. This is not just a reference to those who died in the gas chambers. It refers to those who fought back as partisans or otherwise. And it recalls those true heroes, a few thousand rare individuals, who performed supreme acts of courage to save the lives of the persecuted.

Take Hungary, where the Jewish community of 400,000 humans was wiped out in months.  A few weeks ago, Yair Lapid, an Israeli journalist, attended a ceremony in Budapest, which marked the heroism of 11 non-Jewish individuals, who risked their lives to save people they did not know. Lapid’s late father, a former cabinet minister, was one of the few Hungarian Jews to survive the Holocaust.

Lapid has written that the 11 were ordinary, ordinary people. For example, a lady had realised that she was simply staring a 3 Jewish orphans. On the spot she simply decided to hide, feed, clothe and protect them, until whenever. No payment. No reward.

Why? Yair’s sister, a psychologist, provided an answer. These were people with a profound, ingrained sense of right and wrong. No indoctrination or ideology can override that.

Lapid asks if he or his readers would have done the same in similar threatening conditions. And that is obviously impossible to answer. BUT, what can we do do in less challenging situations in order to correct an injustice?

The United Nations was set up to combat hatred. This week, it is hosting its second conference against racism. The first event, held in Durban, was hijacked by totalitarian countries who poured their bile and venom onto Israel and her supporters.

The follow up meeting is being held in neutral Switzerland, the country who “lost” millions of wealth owned by Jews, who died in the Second World War. The Swiss President officially welcomed  Mahmoud Ahmadinejad, his Iranian counterpart. In the name of free speech, Ahmadinejad, a known Holocaust denier, let forth his opinion as the opening speaker at the conference.

So, the UN, established to counter hate, allowed the world’s prime defender of such disgusting acts to state his views in front of the world’s media. DUH!

It is difficult to find an equivalent. Maybe at the next annual vegetarians conference, the organisers should invite the CEO of McDonalds…in the name of free speech. Not quite the same, but you get the point.

All the world had to do was say: “No. This is disgusting. We the world, the UN, cannot allow this.” True 9 countries boycotted the conference. 24 walked out of Ahmadinejad’s speech. But 10 + the UN’s General Secretary remained seated.

Two of those, who sat silent in their seats, were the reps of the Vatican and Switzerland, harrowingly similar to the blacks years of the Holocaust. They had a chance to act, but their sense of “right and wrong” was found wanting.

What has the world learnt in 70 years? What hope for the fight against racism, against anti-semitism, against hatred?

As I was blogging yesterday about Israel’s economic status, Professor Stanley Fisher, Governor of the Bank of Israel, was presenting his annual report to the country.

With no small irony, the TV  cameras captured the new Finance Minister thanking Fisher for his efforts and then promptly forgetting the book on the table. Freudian slip, if ever there was one!

Much of the press has slammed Fisher. In another irony, nobody is interested in what happened in 2008. Everybody is focusing on the corrected and increasingly pessimistic predictions for 2009 and 2010. For the BOI, growth will recede by 1.5% and then rise by only 1% respectively. Allowing for population changes, this is a double whammy.

A headline in Yediot Ahronot, Israel’s largest daily newspaper explains why people are confused. Fisher talks with quiet optimism, but his stats are not looking good. He is now playing down Netanyahu’s call for lower taxes. Seasonal sales remain cool. Fisher is warning that there is more bad news to come before the upswing.

But I disagree with the critics.

The global recession is unprecedented in scope and form for at least 2 generations. Thus, any response cannot rely on standard formulas, usual policies, or spin. And that is what Fisher is saying today.

In fact, if I recall a briefing of his back in July 08 to a UK trade delegation, and before the credit squeeze really set in, Fisher was saying the same thing thing.

Any measures must be considered, now more than ever. Tax cuts to please politicians will not help the populace as a whole. calculated policies are the order of the day. Stay cool, endure some more nasty pain, and the economy could well already be seeing the first early stages of recovery.

The fact is that neither journalists nor politicians have a better solution to the crucial issues. Fisher’s opponents have chosen the easy path of being critical without providing an alternative.

They would be better off demanding that the Finance Ministry finally implements a package of measures to encourage small and medium sized businesses. That will clearly boost long-term and sustained growth.

Confused? For the moment it is Fisher who has the explanations. Stay tuned to him.

I have long argued that Israel will survive this terrible recession better than others, and possibly come through even stronger.

The jury will remain out for some months to come. However, when the local stock market rises around 24% since the beginning of March, it is time to take stock.

First, in comparison to global equity prices, the Tel Aviv Exchange is on par. Good start. And we know that current prices often reflect future expectations and known prospects.

Further, like counterparts around the world, Israel’s leading bankers have been muttering that “maybe” there are “signs” that “possibly” we are somewhere around the bottom of the trough. OK, so they would not place their fat salaries on an open table if there was not some basis for that.

Evidently, there are still hard times ahead. Sales of cars and household appliances have yet to pick up. Traditional industries have still threatening lay offs due to lack of credit.

I have identified 3 indicators, which together can form a solid base for hope.

Since the beginning of the year, the shekel has lost almost 10% of its value against leading currencies. Israel is an export driven economy. So this stat convert towards higher corporate revenues, and thus investment and employment.

There are some indications that high tech is beginning to recruit again. Just as significant, when you consider what happened to AIG, Udi Klein, the head of the insurance agent’s assoc in Israel, believes that the industry will be short of 1,000 workers over the coming year.

And of course, there have been at least 2 significant discoveries of commercial gas in the past few weeks. The revenues are liable to have a major benefit on the economy and its long-term health.

Were to now? The Finance Ministry. Due to electoral consideration, Israel has lacked macro economic leadership for too long. It is time for the civil servants and politicians to come up and implement strategic and structural policies that will make a difference.

On Tuesday, I went for a wonderful walk in the midst of Samaria. Today, I finally realised what was disturbing me about the trip. For all the beauty of the nature, what I also saw was the very core of the Israeli – Palestinian conflict. For either side, it is no way to live (NWTL).

What do I mean?

 The walk itself was along the banks of the River Shilo. Spring flowers were out in full, and their colours won over the hearts of even your sarcastic author. The last winter rains mixed with some early summer sunshine ensured we were surrounded by a lush green backdrop.

The town of Shilo is nearby, built near the ancient city where the Tabernacle or Mishkan was located. This is holy for many different religions.

So why the phrase NWTL?

To get there, we travelled north out of Jerusalem along Route 60. Palestinian and Israeli drivers happily took turns breaking the speed limit. Each had their own number plates. Each was able to move freely to where they wanted. Fine, but then look again.

Under current peace proposals, Israel will be asked to surrender control of Shilo. Jews will not be allowed to return to a key holy site nor have access to the nature trail I trapsed. NWTL.

Sure Palestinians were zooming freely up and down the road. But on the edge of Jerusalem, they have to undergo security checks to visit friends and family. NWTL.

The security checks are staffed by young 18-20 year old soldiers, who are being asked to make immediate and sensitive decisions, all day every day. Not a fair imposition, leading to unsatisfactory results for all. NWTL.

Looking at the Palestinian villages from a distance and comparing them to the set up of Israeli towns, you can see that the Palestinian Authority is clearly unable (and unwilling) to invest resources in their social development. NWTL.

The route back to Jerusalem was poorly marked, and Israeli drivers nearly caused accidents as they desperately tried to ensure not to take an incorrect turn and thus drive into the wrong village. Who needs that danger or fear? Who needs to be humiliated by these drivers? NWTL.

The list goes on. But do not misunderstand me. Israelis have rights like any other people on the planet – to live their social /religious dream in peace and security. In parallel, the Palestinians deserve better.

And here’s the punchline. As Obama is sucked in to the depths of office, his lackies are also beginning to resort to the spin of the past. They are clearly gearing up to pressure the new Israeli government, assuming that this will bring results.

BUT, the fact is that there is no peace plan – Saudi, American, Israeli, European, etc – that gives a full and genuine resolution to these on-going subjects described here.

World leaders, including Israelis and Palestinians, must start to engage with those real, day-to-day, and on-the-ground issues, and in a manner that replaces rhetoric for realism and multi-level understanding. Then, maybe, we will see a sustainable peace process emerging for the Middle East.

Obama, Miliband and co have yet to reach that stage.

I am increasingly asked why people want to boycott Israel.

Ignoring outright anti-semites, what makes somebody deliberately want to isolate the sole proclaimed democracy in the Middle East? So I invite you to take a few minutes and join me in analysing the background and to come up with a solid intellectual argument.

Background:

Briefly, Arab countries have been demanding a boycott of Israel, even prior to its creation in 1948, at least 19 years before the issue of the West Bank cropped up. And this demand includes a wish to force non-Arab countries to comply with sanctions against Israel.

Skipping forward to the current decade, left-wing activists have taken the lead in calling for a boycott, primarily in Britain.

1)      Trades Unions have repeatedly called for universities not to employ Israeli academics, specifically if they do not comply with a set political point of view.

2)      NGOs have encouraged the British government to demand from retailers that all goods manufactured in Palestinian territories are clearly labeled, way beyond what the EU has agreed with Israel. (The government has reverted to the spin of saying it is responding to consumer pressure, although that abstract has never been proven).

3)      The influential Cooperative Movement in the UK, which sponsors several MPs, is under increasing pressure to boycott Israeli goods.

4)      Where the UK leads, Canada follows. There is a growing movement to launch an academic boycott and stop the import of Israeli wines.

5)      A few Australian professors have also felt a need to climb on to the bandwagon.

6)      In America, Motorola (Israel) sales have been plagued by Palestinian campaigners.

7)      You can search utube for films of how campaigners violently tear Israeli goods of the shelves of French supermarkets or terrorise vendors of Israeli products in UK shopping malls.

8)      The Dutch Labour Party is demanding that Israel talks to Hamas or face sanctions.

So Why Boycott:

Let’s look at 4 possible reasons.

1)      To promote human rights.

Well in that case, there would be calls to boycott 50% of the countries in the world, yes? Type the word “boycott” into google. Around 95 out of the first 100 entries refer to Israel – note “Israel” and not just a call to boycott goods made in the Palestinian territories alone.

It can be assumed that most of these activists are content to accept the repression in Zimbabwe, the slaughter of Christians in Sudan, the racism of Venezuela, or even the totalitarianism of several Islamic regimes including Hamas. For example, the Dutch Labour Party has made no equivalent demand on any Arab party in the conflict.

2)      To help Palestinians.

Israel’s trade union organization, the Histadrut, has a long and strong tradition of working with minority sectors, including Palestinians. They have estimated that a boycott of Israeli products manufactured in Palestinian territories will immediately affect approx 25,000 Palestinian workers.

·         This figure does not include dependants and family member, ensuring that the figure rises towards 150,000.

·         Behind the stat is the fact that these wages are relatively high for the Palestinian sector.

·         Threatened economic instability will threaten new investment.

·         And a boycott of Israel is likely to hit at those sectors that employ tens of thousands of Palestinians working within the pre-1967 armistice agreements.

 

3)      To stop Israel’s violence towards the Palestinians.

This is certainly a noble objective. However, the narrative ignores that fact that most of Israel’s policy in Gaza or elsewhere is based on response. For example, the military action in Gaza in January 09 followed a refusal by Hamas to renew a ceasefire and after 8,000 rockets had landed in Israel over 8 years.

Sanction supporters might have created some credence if they issued a similar demand to boycott Fatah, Hamas and Hizbollah for their violence against Israeli and local civilians. But that balance is consistently lacking in all the arguments.

4)      To help peace

Again highly praiseworthy: But we know that trade between nations and peoples helps to foster understanding and progress. A boycott seals off those very opportunities for all sides.

Boycott’s Raison d’Etre:

So, once you tear away the spin of all these excuses, what are you left with? I looked at the website of Palestine Solidarity Campaign (PSC). The senior team reads like a “who’s who” of participants of trendy causes since the early 1960s. With a couple of exceptions, I would not associate any of them with being anti-semitic. There are even some non-practicising Jews.

BUT, if you compare the language of the website, it reads strikingly similar to that of the Arab League of the 1940s. Then, these people called for: –

 “Jewish products and manufactured goods shall be considered undesirable..” thus declared the Arab League Council on December 2, 1945. All Arab “institutions, organizations, merchants, commission agents and individuals” were called upon “to refuse to deal in, distribute, or consume Zionist products or manufactured goods.”

 

And the difference with today’s cries against Israel? Very little, as PSC site describes. It is the same venomous hatred as 60+ years ago, except that the spin today is more subtle and comes from politically acceptable Western celebs.

History will judge any future boycott as a triumph of evil; a deliberately racist tool, based on a combination of misinformation, phobias and enmity.

The Passover festival has commenced. Easter for many Christian communities is on its way. The Holy Land is full of strange stories just now, but if there is no overt Middle East crisis, then the world press ignores us.

What do I mean? Well take this Wednesday morning, around 6.40am. Hundreds of thousands of worshippers all over the country rushed out to watch the sunrise. The rabbis have calculated that the sun returns to its starting position every 28 years, and this week was that big moment. Yup, there were sarcastic mutterings about Stonehenge, but there we all were, bright and early.

And then, the country completed its preparations for Passover. Leavened food is a no-no for 7 days, as we recall the Exodus from Egypt. The cleaning goes so far that even bottled water from underground springs has to have a special certificate to say that it has no bread content.

Whether that was what Moses intended for future generations, I do not know. But I am at a loss to  explain some of these customs to outsiders.

Even the Kenesset has joined in the silly season. Bibi Netanyahu is back in power. He controls the Kenesset, yes? Well…how come the opposition party of Tzipi Livni, with barely 25% of the seats was able to filibuster the budget debate for nearly 24 hours? Just wait till the new PM tries to pass a contentious peace package through the chamber!!!

There are many more stories, but I will leave you with a note from Israel’s football team. They have received one of the easiest routes ever towards the World Cup Finals in South Africa next year. The main task was to beat Greece.

But, our 11 heroes failed, if only because they have clearly been trained to pass the ball to the opposition.  It now turns out that at a crucial point in the match, some Greek intellectual tried to blind the Israeli goalkeeper from long distance. Considering how Israel  played, this tactic may have had the opposite to the intended effect. In any event, the 3 points may be transferred from Greece to the Israeli clowns.

Could these stories happen in other countries? Probably. Could they all occur, and together, and in such a short space of time, I doubt it. And that is why I love living here.

Best wishes to all my readers, whatever you are celebrating this month.

Today, Monday, the Israeli government posted two seemingly contradictory pieces of monetary news.

On the positive side, foreign currency reserves have passed the US$44 billion mark, a target long picked out by the Bank of Israel. Part of the latest jump resulted from an oversubscribed bond issue in Luxembourg, again another vote of confidence from overseas institutions in the Israeli financial markets.

Now switch over to government spending. Ouch! 

As in many countries, tax revenues are down and lower than initially predicted. The shortfall for 2009 could run close to 5% of GDP. As for expenditure, March was particularly bad. Large debt repayments became due and new unemployment expenditures have begun to kick in. 

What next? Today’s newspapers are full of leaks about forthcoming budgetary cuts, although many – eg reducing holidays – look like accounting fixes. The ship is not sinking, but the captain will need a firm and experienced set of hands to guide it through.

Last week, Yuval Steinitz was appointed as Finance Minister in Israel’s new cabinet. If the tenure of many of his predecessors is an indication, he is liable to hold the post for less than 2 years.

What he can achieve in such a small period of time? Perhaps it is more relevant to ask what are his qualifications that will endear him to the financial markets, other than being a long-time Bibi Netanyahu groupie.

The political views of Steinitz have moved to the right of the diplomatic map. He is a renowned expert in philosophy. He is savvy in political manipulations and has chaired committees in the Kenesset. And his familiarity with economics may not take him past a 101 beginners course.

What does this amount to?

In my view, this background is a great platform for success. It shows that Steinitz comes in with few preconceived theorems. He has the ability to listen and then to act. He understands how to operate the coalition politics of the legislature.

It is to be hoped that Steinitz will surround himself with capable advisers, and who are trusted by the wider capital markets. This rules out “jobs for the boys”, because the markets know how to belt such characters.

A colleague of mine has met Steinitz and gave him the thumbs up. And I recall that three of the most successful finance ministers over the past 25 years were also economic dumbskulls. Yet all of them – Peres, Nissim and Bar-On came through with high marks, each using similar skills outlined above.

Netanyahu has made it clear that he will be keeping a close watch on the finance portfolio. He has deep experience in that position. Because of him, growth regularly topped 4% per annum.

But this is also my concern. Israel’s economic problems in 2009 are not the same as when Netanyahu began at the ministry nearly 8 years previously. The approach must be different. Specifically, Steinitz cannot afford to give in to pressure groups like the Histadrut as Netanyahu used to do or to the banking interests.

Steinitz has an opportunity to lead Israel’s finances to a strong future. He will need to use his own talents to ensure this is achieved.

A recent conversation with an investment banker from the UK was revealing.  

He compared Israeli and British reactions to the global recession. Yes, both economies have taken a hit and G20 announcements will not change much overnight. However, while the financiers in London walk around with their heads looking down, in Jerusalem and in Tel Aviv you find continued verve and dynamism.

So as Obama, Brown and co parade around London, announcing the rebirth of Keynsian economics, I want to share with you some info on just 3 of the many fascinating Israeli companies I have spoken with this winter.

Take Leviathan. Set up by serial entrepreneur Daniel Farb, the company has a patented method to control wind direction around their turbines. This allows their customers to generate about 30% more wind energy than known competitors. As the recession has blown in, Leviathan’s sales have picked up.

Cognisafe lead us into the world of on-line gambling. The company is the first to admit that this is not everybody’s preferred area of activity, it is growing rapidly in popularity and needs protection against cheats.

This is where Cognisafe applies its unique software. It can identify threats, profile them and deliver suggestions for the operation managers. Thus, although hundreds of thousands of players may be present at any one moment, the game remains safe for all. The first customers are in the door, and there are encouraging signs from the British market.

The Optimum Group have taken production manuals to a new level. They convert bulky and often incompressible manuals to focused on-line procedures. The directives of the line managers become readily understood by the training staff, raising output and reducing time flows. They have a Fortune 500 list of Israeli clients, with a heavy focus on the sensitive defense sector. 

For these firms and many others, the recession presents opportunities rather than disasters. You will be advised to watch their continued development over the next few years, as they enter the world stage.

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