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.

Today, I was in the Old City of Jerusalem. I had the opportunity to celebrate the Bar Mitzvah of my youngest son in one of the many special, renovated Synagogues in he area . In fact, we had started the festivites a month previously, when we prayed as a family at the Wailing Wall (Kotel) nearby.

And as we all know, upto 1967, such actions would have been impossible. Jews were not allowed in these areas.

Tragically, as my wife, children, friends and others were dancing, 25 miles away, a 13 year old boy was hacked to death. The youth,  unknown to me, was barely a few months older than my son. His crime? According to Hamas, the attack was a “natural reaction to Israel’s occupation”.

There are angry protesters all over the world, yet none of them resort to repugnant acts of slaughter, a pick axe to slay a youth. If this is Hamas’s definition of normality and acceptability, I wonder what it takes for them to consider something inhuman!

Now consider that in a few weeks time, Pope Benedict XVI will visit Jerusalem and the Holy Land. It is less than a decade since his predecessor was here. As then, this trip will be a tremendous opportunity to show just how pluralism really does work in this minute part of the Middle East.

If the Pope is allowed out of his bullet proof vehicle, he will be able to see what I witnessed on the way to Synagogue this morning. We walked passed the entrance to Dormition Abbey, where pilgrims were mingling happily. A few yards along, the Armenian Quarter was thriving with tourists. And beyond, the minarets were calling their followers to prayers.

Obama, the EU and others are signalling to Israel to make quick and significant concessions to Hamas and to Fatah. Yet for all their so-called protection of Israel’s future, the international community continues to seek a way to appease the violence of Palestinian warriors.

The Pope will not be visiting Gaza. The treatment of Christians there in the past decade, and particularly since the takeover by Hamas, has been a continuous story of religious harassment.

And if Israel were to agree to the demands of America et al on Jerusalem, then my children will not be celebrating their weddings at the Wailing Wall. So if you want to keep Jerusalem open to all, then as the Pope will discover, do not change what already works.

British Midland is one of the largest airlines in the world. This  time last year, it finally got round to operating a daily flight to Tel Aviv airport.

The past few months have not been kind to the travel industry. A commercial recession has seen less business people hoping on flights. Tourism to Israel is down around 50% by some calculations.

However, 2 days ago, British Midland made a positive statement and bucked the trend. They now have 2 daily flights in both directions, Heathrow – Tel Aviv. Their chief executive, Mr Nigel Turner, personally turned up to launch the event at a gala cocktail hosted by the British ambassador in Israel.

For the record, I can testify that the event was a tremendous success, plenty of networking going on, people looking for opportunities to promote trade between the two countries.

Let us hope that the new Israeli minister for transport continues to open up Israel’s skies, as promised at the ceremony. this can only be better for the customers and help to further bilateral ties around the world.

 A few days ago, the Israeli treasury in Jerusalem announced that it had issued a debt package in the USA worth US$1.5 billion at 5.2%. Ever since, it is a topic that keeps coming up in discussions, and with no small amount of pride.

How did Israel succeed? At a time when Gordon Brown and other world leaders doggy paddle from one piece of bad economic news to another, it is worth taking a few moments to see what it is happening with finances of the Holy Land.

Yesterday in Jerusalem, I heard Prime Minister designate, Netanyahu, state that he thinks “we can outperform the global economy”. Fighting words, and as Finance Minister some years ago he did launch the country on a path of sustained growth of 5% annually for 5-6 years.

But it needs more than bold character.

You ask senior economists like Barry Topf, head of the Market Operations dept at the Bank of Israel. He notes how Israel has a real opportunity to come out of the recession in good shape. Strong, positive fundamentals + a solid financial position + excellent micro factors like entrepreneurial skills – Israel possesses those skill-sets, and when combined together they point to a positive course.

As Topf noted in a presentation, Israel is the only country in the EMEA region which does not have a current account deficit. That is a significant and positive stat that excites analysts!

A few days ago, the Bank of Israel released its summary of Israel’s International Investment position for the end of 2008. For the first time in a decade, Israel assets abroad now exceed liabilities, and the surplus approaches the US$ 7 billion mark.

No wonder there is a confidence in the capital markets to lend Israel money. And it is no surprise that for all the rising unemployment and political uncertainty in the country, there is genuine ground for cautious optimism.

The STEP Conference in Jerusalem looked at the opportunities open to the Palestinian and Israeli economies.

So what’s so special? Bibi Netanyahu was very keen to give the opening address. So I made sure that I listened very carefully. the following are direct quotes.

“The economic track is a compliment – not a substitute – for peace negotiations.”

He is looking for “rapid development of the Palestinian economy”.

“There is an important future for the Palestinian-Israeli economic relationship”

“I urge you to invest in the Palestinian economy”

Like him or not, this sounds like a man looking for a better road to peace, just as Obama is seeking new solutions to his problems. Maybe it is time for the new American regime to reassess Israel’s incoming Prime Minister.

Over a 10 month period, the shekel depreciated by around 30% against the dollar. Since the peak of 13th March, the shekel has clawed back around 5% of its value. What’s up?

Fact 1: The Bank of Israel had an open policy of buying dollars over a year or so, a policy that ended with the onset of 2009.

Fact 2: Israel has always maintained a “competitive” rate of interest against the dollar. However, this policy has been blown apart by the recent fluctuations of the international banking system.

Fact 3: And when Obama and his team move, anything can happen. Today with the release of the policy on toxic assets, the shekel began to revalue, then devalued, and has finished its trip almost back where it started – about 4.04 shekels to the dollar. Are speculators cashing in?

I was intrigued by what Michael Eisenberg had to write.

For those of you who were optimistic on the dollar and budgeted anything above 3.7 Shekels to the Dollar, do yourself a favor and re-budget ASAP so you do not delude yourself into losses. And for those Israeli public companies who experienced some extra profitability last quarter due to the rise in the dollar, be aware that the profits may evaporate.

Where to next? Globes quotes Prico, an on-line foreign exchange broker. Internal USA policy will keep the dollar weak. Back in Israel,

In the short term, Prico advises keeping an eye on the shekel 4/$ level, which can be expected to provide a support level for the shekel-dollar exchange rate. The next support level below this psychological level, shekel 3.95/$, is very important, because support at this level could support an upward correction, possibly to as high as shekel 4.15/$.

Confused? It gets better. “The Economist” magazine has just described Israel as one of the “lands of opportunity”.

Over the past 3 months, the Tel Aviv Stock Exchange has more or less held its value, despite sharp daily fluctuations. compared to the 10% losses in London or on the Dow, that is good news.

The past few days have seen another mark of confidence in the Israeli financial system. The International Organization of the Securities Commissions has agreed to host its next conference in Tel Aviv, commencing 8th June 2009. 

There is a list of financial heavyweights due to attend. The current program includes: –

Mr. Lloyd C. Blankfein, Chairman and CEO, Goldman Sachs Group, Inc.; Mr. Deven Sharma, President, Standard & Poor’s; Prof. Eddy Wymeersch, Chairman, IOSCO Regional Committee, Chairman, Committee of European Securities Regulators; Prof. Stanley Fischer, Governor, Bank of Israel; Prof. Zohar Goshen, Chairman, Israel Securities Authority; Mr. William Brodsky, CEO of the Chicago Mercantile Exchange

A couple of weeks back, I commented on the excellent report Israel received from the IMF visiting committee. I still tend to agree with the Governor of the Bank of Israel. This recession may be tough, and it is not ignoring Israel. However, the country has a good chance to come through in a strong position.

It is an accepted fact that whether due to conflict or a corrupt leadership, Palestinians are dependent on aid.

I have long argued that while the money is needed, it is handed out in a manner that wavers between meaningless to dangerous. For proof, just consider how Chairman Arafat died as one of the richest men in the world.

In contrast, I have recently witnessed some encouraging news for the Palestinians. 

First, this week, I was invited to join a tour around Israel with an NGO, whose charity is active in the Palestinian territories. One of the first stops was in Ramallah, where the The Portland Trust is building cheap housing and helping to develop pension schemes. These are on-site projects,which will make a long-term difference to society, beyond the reach of waring factions.

And I am to attend the Jerusalem STEP Conference, directed at promoting economic opportunities in the Palestinian Areas. The PM designate, Netanyahu, will give the opening address.

It is these types of initiatives, which the world needs to focus on. It is time to move away from terms like “occupation” and “terror”. If the peace makers would start to concentrate on the very people affected by the conflict – on both sides – maybe there will be some genuine hope for all.

The Office of the High Commissioner of the United Nations for Human Rights will host “the Durban Review Conference”in Switzerland in April 2009. It is designed to create an international momentum against racism.

By chance, at the exact same time on Tuesday 21st April, 10,000 people will be holding a rally at Auschwitz under the banner of “Say No To Hatred Today”.

The Durban conference will not be attended by the USA, Italy, Israel and Canada. Australia and Holland have open doubts. Around 90,000 people voted on Der Spiegel’s website against German participation. At least 45 MPs at Westminster have signed a motion of protest. So why boycott a UN sponsored event?

The answer is simple. The conference will be an extension of a previous debate held in 2001 in Durban, when the thin veil of pretence between anti-Zionism and anti-Semitism was blon away. Speaker after speaker attacked Israel’s right to exist, calling for economic, cultural and diplomatic sanctions against the Jewish State, the sole democratic country in the Middle East.

I have written often how my daughter is a volunteer in an ambulance brigade in Jerusalem, where staff and patients are from different religions. The Kenesset is host to Jewish and non-Jewish Communists, who regularly joust with Lieberman’s right wing approach. The churches in Ein Kerem, Jerusalem, where my wife works, toll freely every day. And this week, the members of Hapoel Tel Aviv football team offered their respects to a Circassian colleague, who lost his father in heart-breaking circumstances.

When visiting NGOs come to Israel and look for coexistence projects to invest in, there is no shortage of opportunities to consider. And that is the point. Such diversity and pluralism is hard to find in the other vast expanses of this violent region.

This openness is not just laid down in common law in Israel. It is a way of life for the overwhelming majority.

Significantly, the same principles are rarely applied when investigating other countries. Israel is thus judged by a set of standards, which converts spin into deligitimization. The result is often hypocrisy, mistrust, and even hatred. Ironic for a country looking to the outside world to help secure a peace with its neighbours.

The UN’s attempt at anti-racism has become an open route to vent venom at Israel, and thus at Jews.

I offer the remaining UN delegates an alternative. Leave the comfort of Geneva. Join those on the “March of the Living” in Auschwitz. No clearer message could be sent to totalitarian regimes around the world…….such as Libya and Cuba, the prime movers of iniquitous resolutions in Switzerland.

Then let us look toegther towards building coexistence through the multiple projects in the Holyland.

There’s an old joke in Israel. It takes 3 months to decide on a date to hold an election, 3 months to campaign, and 2 months to form a coalition. And when that is over, it is nearly time to start the circus all over again.

So while Bibi Netanyahu has been dallying around, trying to create a government based on a solid majority of 1 – or is it 5 – votes, the country has calmly gone through a series of crises. Hamas continues to send rockets into population centres. Stanley Fisher, the Governor of the Bank of Israel, is predicting the worst economic scenario in the country’s 60 year history. The Obama administration is looking increasingly hostile. etc etc.

Is Bibi the man to save the country? So far in coalition negotiations, he has surrendered several top portfolios to Avigdor Lieberman’s party, even though they received barely half the number of votes as him. Not a good omen for when the PM has to handle Palestinian or American pressure.

If only it would end there.

It is my wife who pointed out with pointed despair and disgust that neither Lieberman nor any of Bibi’s potential partners have sought the economics or education portfolios. She correctly observed how most people go into politics ostensibly to change things. And where better to make a mark on society than through these two ministries?

But in Israel, after over half a year of jockeying and puported idealism and electoral holier-than-thou comments, nobody at the top has the combined courage and ability to make a stand. These two jobs, which urgently need people of calibre, are being shunned by potential cabinet members.

What the hell did these people fight an election for?

Tourism in Israel had a brilliant year in 2008. Around 3 million visitors arrived, two thirds of whom were Christians. A significant increase on previous years. 

As the Tourism Ministry has reported: –

During the last decade, the ministry has invested tens of millions of shekels in developing sites including, among others, the Mount of Olives Promenade, Via Dolorosa and Christian trails in Jerusalem, Nazareth and around the Sea of Galilee.

Going forward, in less than two months from now, Pope Benedict XVI will visit the Holy Land. Although accepted that he will not be accompanied by tens of thousands of “well wishers” as his predecessor was in 2000, his entourage will still be very heavy indeed. Jerusalem hotels are already reporting full capacity for the period.

It goes further. This week, a large delegation of Israelis, representing the full spectrum of the tourism industry, visited Bethlehem.

With the cooperation of the Civil Administration, the city has been part of the boom since late 2007. In parallel, the Tourism Minister of the Palestinian Authority, Khouloud D’eibes, has given his open support to the initiatives and enhanced cooperation.

The net uplift: Welcome income for two economies, showing what can be done together. A model for economists. A slap in the face for detractors.

This weekend’s tennis match between Israel and Sweden appears to have more to do with politics than sport. Pictures of the violent protests against Israeli representation recall the worst days of the Intifada.

It is easy to compare the lawlessness of the protesters with those who attacked British police recently in London. Of more interest is to analyse their basic complaint that Israeli society is racist.

Speak to Ishamel Khalidi, Israel’s deputy consul general in San Francisco. A Muslim, a proud Bedouin, the owner of a master’s degree from Tel Aviv university, he clearly disagrees with such an appraisal. Writing recently in the San Franciso Chronicle, he observed: –

If Israel were an apartheid state, I would not have been appointed here, nor would I have chosen to take upon myself this duty.

On a different spectrum, the Leo Beck School in Haifa has a diverse student background. You can find Jew, Muslim, Druze, Christian, etc. Almost every year, another multi-ethnic school opens in Israel.

The Israeli Parliament has numerous non-Jewish representatives. The judiciary is replete with members of the minorities. And my wife works in the Ein Kerem area of Jerusalem, where today the church bells will toll out loudly as per every Sunday.

On March 4th, the Independent Commission for Human Rights released its monthly report re violations of civil liberties in Palestinian territories. At least 4 citizens, including Basheer ‘Ilayyan al Zaytouneh, died from torture. One died under interrogation from Palestinian police. Numerous journalists, like Wa’el Issam Abdul Qader, were detained or arrested or deported. etc etc.

So, are teh protesters in Sweden really interested in human rights or dumping their “politically hatred” on others?

This week, I attended an economic briefing at UBS. The Swiss banking giant is predicting global growth in 2009 at a miserly 0.2%.

This is what many see happening in Israel – although that is a giant positive mark when compared to several other Western economies.

Don’t get me wrong. The Israeli economic press is full of depressing reading. This week, the Tel Aviv Stock Market matched the loses in Europe and on Wall Street. High tech lay offs continue in quantity. The local bank news is still edgy.

And yet. And yet. There is still gold in dem Judean hills.

I am associated with a start up that has embedded a software on a smart card with a UBS application – enhanced content data management. It recently raised approx US$1m, with sales commencing in Spring 09. Another client’s software has made significant sales in the UK this quarter, despite the dire economy in Britain.

These are not isolated stories. the latest bulleting from Israel’s Investment Promotion Centre is extremely positive.

  • FDI in 2008 hit US$10 billion
  • Since December 2008, 3 Israeli medical device companies have been bought out for a combined value of over US1 billion.
  • GAP, Banana Republic and H&M will begin to open outlets in Israel over the next 12 months.
  • Solel, BrightSource Energy and other cleantech companies are striking large deals in Spain, California and elsewhere.

The UBS representative noted that the clever people are those who plan carefully at the end of a recession. 2009 will not be pretty. But for Israel there will still be several bright spots worth tagging. early on.

With hindsight there were many people warning over Madoff, years before he was forced to tell the truth about his Ponzi scheme.

Now turn to the Middle East. Since the Oslo Accords of 1993, roughly 25% of revenue of the Palestinian Authority comes from taxpayers in Europe, America and other donor groups. For example, in a statement released from Brussels last week, the commission observed that: 

The EU is the largest donor to the Palestinians. In recent years, the combined contribution of the European Commission and EU Member States has reached €1 billion per year, which is not sustainable.

 The question is: Do we know where the money is going to? Are the transfers accountable and transparent?

Just look at the work from the pressure group, Funding for Peace Coalition. With reports dating back to 2003, 2004 and 2005, the team has warned that large amounts of foreign taxpayers investment in the Palestinian Authority has simply disappeared.

What makes this a Ponzi scheme?

A combination of political correctness, goodwill and pressure from the Arab League has encouraged Europeans to support the Palestinians financially, just as America is perceived to help Israel.

It is no secret that the Arab countries have rarely delivered on their promises. The Europeans are finally wondering what they are getting for their Euro.

Benita Ferrero-Walder, European Commissioner for External Relations and Neighbourhood Policy, intended to pledge on 2 March in Sharm El Sheikh (Egypt) €436 million ($554 million) to the Palestinian people for 2009 at the “Conference in Support of the Palestinian Economy for the Reconstruction of Gaza”.

This will be on top of a similar amount of direct aid alone delivered in 2008, much of which went to pay for Hamas civil servants in Gaza. The new gold is supposed to be used for rebuilding Gaza. However, it is to be handed over to Abbas of Fatah, who has no control in Gaza!

So here comes the sting! The Europeans have opened the door as widely as possible for Barak and Hilary from the new-can-do White House. The Yanks have promised US$900 million extra bucks. But to whom and why?

To Fatah? Er, remember that Arafat died as one of the richest men in the world. To Gaza? But again Abbas does not rule Gaza. To UNRWA, whose stores are openly ransacked by Hamas operatives? Etc etc.

So what we have is: A bottomless pot, designed to feed aid to the Palestinians. European taxpayers, who have poured in loads of wealth but seen little in return. Americans, who are used to parting with money without conducting due diligence.

This week’s confrence in Egypt has promised US$4.5b  to 3m Palestinians. Will they get it? Would some of this be better used in Darfur, Zimbabwe or elsewhere? Learning the truth about Gaza and the Palestinians is often more complex than unravelling a Ponzi scheme.

A stream of bad economic data has been released in Jerusalem in the past few days. GDP shrank by 0.5% in 4Q08. 18% fewer tourist nights were recorded in January 09 compared to 12 months previously. Intel announced a sharp drop in exports.

The Economist Intelligence Unit recently updated its predictions for 2009. The current forecast highlights a 1.9% real drop in global GDP. Taking the USA as an example, it explained that:

The US economy is in freefall. The 3.8% contraction in fourth-quarter GDP was the worst showing since the opening months of 1982, when the economy contracted by more than 6%. Business spending dropped by a stunning 19.1% at an annual rate in the three months to December.

So Israel is better placed? Well, I have long argued that Israel entered the recession with numerous structural positives, which are still true today. Naturally, that does not make the country immune, especially when the political system is neutered due to post-election coalition gamesmanship.

There is one stunning major bonus, clearly identifiable on the horizon. About a month ago, commercial quantities of gas were discovered in the Tamar field just off Israel’s coastline. This week, two hugely important pieces of information were released to the press.

First, it is very likely that the find is larger than initially thought. Second, spurred on by the American partner, Noble, the gas will brought to the market within 3 years, and not 5 as originally thought.

The knock on effect here – increased revenue for the treasury, employment, export possibilities, etc – will have a substantial and positive effect on the Israeli economy.

The Economist concluded its report with a “subdued outlook for the global economy in 2011- 2013”. Israel has a chance to be a special exception to that forecast.

Over 25 years ago, I attended a play at the Royal Court Theatre in London. Titled “Not Quite Jerusalem”, it revolved around the lives of foreign students working on a kibbutz. It was humourous while poignant, but had little to do with Israel per se.

In those days, the Royal Court was a fun place to visit. You were guaranteed an evening of entertainment, which made you think. It was an important part of the world of expressive fringe theatre.

Jump forward to 2009 and the theatre is hosting a 10 minute short play by Caryl Churchill, called Seven Jewish Children. Churchill is an established author, who unashamedly tests accepted norms. Provoked by recent events in Gaza, she has taken 7 historical themes important to Jews and questioned them.

Anything wrong in that? Not, in theory. Anything wrong in criticising Israel? Not, in theory.

Michael Billington is a respected critic. He notes that by using conversation with children as a backdrop, Churchill accuses Israel of using security to justify massacres. Anything wrong in that? Yes, plenty, lots of plenty.

There were no massacres in Gaza. And as a parent of three children attending Israeli schools, I can testify that Israel does not officially or unofficially teach or preach massacres. To claim or imply otherwise is a libel.

And neither are children taught about the “otherness” of Palestinians, as Billington has observed.

My children study Arabic. They learn about Muslim culture. Their geography books contain references to the pre 1967 borders. And they are taught about Christianity, the Crusades and European history.

I cannot find similar curricula in Palestinian schools. In fact, many have argued that the new Palestinian textbooks published since 2000 would fail any critical analysis by UNESCO.

But I digress. Churchill has denied that her play is anti-semitic. Yet she writes about Jews. She uses Jewish themes. She inserts them in a deliberately provacative way. She causes wide spread revulsion amongst most  British Jews.

Is her play about Israel? Well, sort of, but Jews are the central theme., and thus makes people question if Jews possess acceptable values and ethics.

To my way of thinking, the play is a libel. It is anti-semitic.

Amazingly, in this woeful episode of British culture, there is still something yet more pathetic; the feeble actions of the Royal Court management. Its spokesman has urged people to see the play before they judge it. “It is possible to criticise the actions of Israel without being anti-Semitic,” he says.

In other words, they will show what the hell they want in the name of free speech. But apparently Ramin Gray, the theatre’s associate director, has admitted that the Royal Court would be hesitant to stage a play critical of Islam.

This is hypocrisy, out right hypocrisy. Double standards exposed mega time. It is this abuse of free speech, which allows the Churchills of this world a stage and platform for their hatred.

Remember the Protestant priest, Rev Martin Niemoller? In 1945, he recalled how nobody had protested that Jews, Communists and Catholics had been rounded up. So when they arrested him, there was nobody left to object.

Similarly, it is time for the UK to wake up. Most criticism of Israel has often bordered on the anti-semitic. In Churchill’s case, she has crossed the boundaries of the acceptable with a Bob Beamen leap. Her work is disgusting, aimed at sowing hatred and mistrust, that and nothing else.

Protectors of free speech should see her words for what they are, and then replace them vociferously…….before the thought-police put them next to Niemoller.

The Western media has concluded that Israel’s air force and artillery flattened the Gaza Strip. Many are homeless. And Hamas, yes they are naughty for firing rockets at Israel, but it needs to be helped in order that the population at large does not suffer further.

According to a debate in the British Parliament, “the Muslim community in Blackburn raised £150,000 for a Palestinian charity in just one week.” Praiseworthy indeed, and let us hope that transparency has improved since the days when the Arafat and Dahlan team pocketed much of such donations.

In the past few months, there has been growing evidence to suggest that Hamas is in fact far wealthier than it wants to admit.

1) Khaled Abu Toameh is one of a rare breed. An investigative Palestinian journalist, he has eyes and ears in many parts of the territories. In a recent interview, he noted that:

Hamas could not have taken control of the Gaza Strip in 2007 had it not been for support from Iran and Syria. They had logistical and financial support, which means weapons. Most of the weapons coming into Gaza are being financed by Iran and facilitated by Syria.

2) Hamas is also not burdened with having to provide over a million people with education and welfare. Much of that role has been taken on by UNRWA. In a recent report,  UNRWA was slammed for becoming a political institution, managed by Palestinians for Palestinians, even open to abuse by terrorists. Ironically, on at least 3 separate occasions since early January, Hamas members have stolen UN property, including UNRWA supplies.  

3) It is the smuggling tunnels that have historically been the financial lifeblood of Hamas. Speak to any journalist, like Matt Rees, who has covered the Gaza Strip over the years. During the Intifada, cease fires with Israel were broken because gangs could not bring in their contraband. Toameh notes that the tunnels have existed for decades.

 And new evidence is emerging that Hamas has actively encouraged the tunnel industry since 2007. The tunnels provided a way to bring in weapons and raw materials. Hamas sold “licenses” for the building of some tunnels, raking in a fortune in undisclosed taxes in a poor economy. Individuals made a fortune out of commissions, just like Dahlan of Fatah in the past.

To quote Hamas Finance Minister Ziyad Thatha:

A number of investors collected millions of dollars in a way that is against sharia (Islamic law) and we will operate against them.

At least now we know why Muslims around the world have to collect money for their brothers and sisters in Gaza. No wonder, national appeals have been started for them. it will be interesting to see if that includes donations from governemnt ministries.  

On the surface, Israel’s economy is heading the same way as America, the UK and others.

Initial figures show unemployment doubling to 20,000 people between October 2008 to February 2009. The two largest banks, Hapoalim and Leumi, have reported large losses. In fact, Leumi’s share price has now lost over half its value. High tech companies are looking at a 4-day working week.

And yet, as I keep stressing, Israel does not need to panic. For the moment, I am not alone in that view, as reflected by the stock market, still on the up in fits and starts.

Just as encouraging is the latest report from the IMF on Israel. It predicts a small but positive growth of 0.5% for 2009. This is down from its previous analysis but still higher than the 0.2% as suggested by the Bank of Israel.

The IMF went on to praise the monetary and fiscal policies of Israel. It did find that there was room for selected budget stimulus and an even lower interest rate. However, the general picture is encouraging, hopefully leading to a major pick up in 2010.

Last week, Israeli women gave a global lesson in equality.

Let’s start with the general election Like her or not, and whatever the final make up of the new government, most commentators accept that Foreign Minister, Ms Tzipi Livni, ran the best campaign. She came from behind in the polls to become the largest party. She looked comfortable slipping into jeans and boogying at a disco. She was the lady to fear.

And as for Avigdor Lieberman, he may be the enemy of the foreign press, but of his electoral list, 4 are counted as former models. And one of those is the daughter of a former deputy Prime Minister. Yup, women did well in the polling booths.

But the successes do not stop there. Bar Raphaeli, Israel’s best-looking export and long-time partner of Leonardo DiCaprio, made the front cover of Sports Illustrated Swimsuit Issue. This is a lady who is proud to acknowledge her own natural beauty in tandem with that of her homeland.

Possibly even more sensational was the triumph of Hila Plitman. Growing up near the centre of modern Jerusalem, this soprano picked up a Grammy award. She received the attribute as in the category of best classical vocal performance.

Israel may be locked in to much of the culture of the Middle East, but she continues to offer pluralism and democarcy,  In fact, a female duo has been chosen to represent Israel in the Eurovision Song Contest, a Jewess and a Muslim. 

Curiously, Saudi Arabia has just appointed its first female deputy minister. Yet another case of Israel showing others in the region the benefits of her open society.

Israel has voted. The results are in. And the financiers reacted by causing a 2.6% drop in the Tel Aviv Stock Exchange (TASE). They don’t like change, especially when political uncertainty remains in the air.

Now look again.

Despite the fall, the TASE has still risen 5.36% since the beginning of the year. And there was a war going on as well for much of the time.

Some of the Israeli companies listed overseas are also being sought after. In the healthcare sector, Teva’s continuing success is well documented. Card Guard is located in Rehovot and has a strong reputation for devising remote patient monitoring systems. 

On the internet front, Michael Eisenberg recently identified 3 Israeli companies that may be well positioned to take off financially; Incredimail (MAIL), Answers.com (ANSW) and Babylon (traded on TASE: BBYL).

On more fundamental issues, the local papers remain full of pessimistic news about high tech companies going on to a 4-day working week. Yet on a rainy election day itself, most of the shopping malls were packed. Many reported a 200 – 400% increase in normal trading volumes. That spending power came from somewhere.

I don’t hold positions in the companies mentioned. I was not shopping on election day. Yet, while I recognise that 2009 will not be a pretty year for everyone commercially, there is still a lot of business out there in Israel.

Israel goes to the polls today. 33 parties to choose from – green, Jewish religious, Arab, pensioners and the usual lot – they are all there competing on the basis of strict proportional representation.

Each election throws up its own irony. This year, when the winter rains have been almost non-existant, it is puring down as I write. Maybe this will put off a few people.

The non-Jewish voter is never short of choices. For example, the Druze are represented on many of the lists of the major parties. The Balad group and others, openly and consistently critical of Israeli governments, are trying to encourage their supporters to turn up and vote.

What is undisputed is that everyone has a right to one vote and cast is freely.

Palestinians can look on with wonder. , Hamas continues is rule by threat and violence. The Palestinian-run Independent Commission for Human Rights reported in a press release on February 8th that yet another Palestinian has been tortured to death by Hamas in a Gaza hospital.  Jameel Shafiq Shaqqura was 51, and heralded from Khan Yunis. In a separate incident, UNRWA has finally convinced Hamas to return supplies that were stolen in broad daylight.

No doubt, the result of the election will produce yet another coalition government. Weak or strong, right or left, whatever its formation, today confirms yet again that Israel resides firmly in the camp of pluralistic, democratic societies.

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