Afternoon Tea in Jerusalem Blog

Life in Israel

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Israeli commercial life and society

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.

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September 2018: The beautiful, agonising challenge of living in Israel.

Tonight, Tuesday 18th September 2018, the fast of Yom Kippur will commence. Known in English as the day of Atonement, Israel shuts down. You will not see cars on the road. Businesses are closed. Restaurants are shut. Complete tranquility, as the country – at least traditional and observant Jews – dedicate themselves to prayer.

(To put the biblical instruction in terms of 2018, millions learn how to put aside Whattsapp for 25 hours).

Sunday morning, roughly 48 hours previous to my writing this text, Rabbi Ari Fuld was out shopping near the town of Efrat, located between Bethlehem and Hebron. Many around the world know this region as the West Bank (of the Jordan River).

Fuld was stabbed in the back by a 16 year old, Khalil Yusef Ali Jabarin, from a village south of Hebron. There is a video of Fuld trying to chase the youth and taking a shot at him, before collapsing. I know the medic who tried to treat Fuld on the spot. He described to me the gapping hole in the rabbi’s back. He was declared dead shortly after arrival at the hospital.

The youth was remanded in an Israeli hospital, where he was treated for a mild flesh wound to his hand. His initial “court appearance” was conducted around his bed. The Palestinian Authority (PA) will pay his family about US$400 every month for three years. As the Palestinian ambassador to the UK effectively admitted on a talk-in last week, such funds are available due to the generosity and financial support from European and other governments towards the PA.

The supporters of the Palestinian cause have blasted social media with the argument that Fuld was an armed settler, and thus he was a legitimate target. I suppose the logic of that argument is that if you disagree with somebody’s politics, you can slay them in cold blood.

I guess that mix of hatred justifies 9/11 in the USA, 7/7 in London, Spanish train bombings et al. It is noticeable the many of the proponents of such views hang out with anti-semites. They imply that Jews are a fifth column in their country of living. More hatred, which is rarely found in societies looking to cerate individual growth and development.

What would such people say if a dear and beloved one was randomly slain in the name of a political movement? Would that also become acceptable?

As for the victim, I saw a post from a friend of mine, David Olesker.

In the last week a righteous man, whose public works are known to many, was murdered. Our Sages say that the death of the righteous (especially those who die sanctifying G-d’s name) is an atonement for the generation.
I can’t help but feel that, despite the countless merits of the acts Ari Fuld did in public, his true righteousness probably lay in his private life, known to his family and those closest to him. There are doubtless others, who are not known to the wider world, who stand beside him today, before the Throne of Mercy, where they will plead for their people on the day when we are all judged.
These advocates will not make us ashamed, let us not make them ashamed!

The scenery at this time of year in Israel is exquisite. On the Day of Atonement, Jews pray to be sealed in the Book of Life. I wish everyone – yes, everyone – a healthy, prosperous year ahead. It should be a year full of self-fulfillment and mutual opportunities.

The strength of British-Israel trade

The amount of Israeli investment in the UK has been growing since a UK government scheme called the UK Israel Tech Hub was launched in 2011……..Anglo-Israeli business deals totalling £85m have now been secured through the hub. Meanwhile, hundreds of British and Israeli companies have been involved in its various activities and events. During 2016-17 this included more than 150 UK and 490 Israeli firms.

Thus, summarised an extensive review by the BBC of the growing tech ties between Israel and the UK.

To give some context, the item comes during an interesting week for relations between the two countries. The British affirmed in the House of Commons that “The UK has announced £17 million of funding over the past four months, in addition to our original budget of £28.5 million, to protect UNRWA’s vital services (for the Palestinians).

And the Labour Party under Jeremy Corbyn has continued to oppose anti-Semitism, while talking the languages of its proponents (sic). This sinister approach was dissected in a satirical rebuke by award winning author, Howard Jacobson, and then in an eloquent speech by former Chief Rabbi Lord Sacks in the House of Lords.

(As if to confirm their concerns and to highlight the depth of malicious debate in the Labour Party,  TUC delegate Mark Serwotka has just declared that Israel has tried to “create a story that does not exist”. His words and tone are the plagarised language of the fake ‘Protocols of Zion’ from Tsarist Russia.)

So let us just step aside and see how much each country contributes to the success of each others’ economy and society as a whole.

  • It is less than a month ago that the largest trade deal between the UK and Israel was declared. Rolls Royce is “supplying Trent 1000 engines to power a fleet of 16 Boeing 787 Dreamliner aircraft that have been ordered by EL AL Israel Airlines”. That is a lot of work for a lot of British jobs.
  • Staying with flight, the UK’s Effective Space, a startup developing a satellite servicing system (drones), has announced an agreement with Israel Aerospace Industries (IAI) to provide technical and financial support.
  • In the world of finance, the cities of London and Tel Aviv have signed a landmark Memorandum of Understanding to bolster FinTech and cyber security cooperation between two leading global centres for digital innovation.

And so the list goes on. As a British minister stated in Parliament on 13th September: The UK-Israel Trade Working Group is making positive progress towards transitioning the EU – Israel Association Agreement, to maintain our strong trade and investment relationship with Israel.

I think it is worth concluding with extracts from a debate from the same day led by Dr. Liam Fox, the Secretary of State for international trade. To quote the salient points:

From online banking security to prescription drugs to cherry tomatoes, Israel has become an international technological and trade powerhouse. Every day, millions of Britons are benefiting from Israeli inventions and produce, even if they do not realise it.

Our trade with Israel currently stands at £3.9 billion in goods and services, with our exports up 7% in the past year. The Prime Minister met the Israeli Prime Minister in February 2017 to set up the joint trade working group, and I would like to thank the Israeli Government for their close liaison. We are dedicated to the continuity of trade and, once we leave the European Union, to having an ambitious new trade agreement that will provide even greater benefits than those we currently have.

The tech hub (see above) is there to help British businesses to get access to the innovations that come out of Israel across a range of sectors. It is worth pointing out that Israel is an extraordinarily innovative country and has more start-ups per capita than any other country on the planet. Where we can get UK businesses across a range of sectors to get access to such innovation, it is always a positive outcome.

The latest computers used in the House of Commons use Intel 7 and Intel 8 cores and above, and Shazam, Skype and FaceTime all use technology developed in Israel.

As I (Dr Fox) have already said, the key to that is the UK-Israel tech hub. This relates not only to the area of computers, which my hon. Friend has mentioned, but to FinTech, cyber-security, biomed, retail technology and the creative industries. These are all prime areas for co-operation between the United Kingdom and Israel, and we should celebrate that relationship and the benefits that it brings to both our populations.

Now if Mark Serwotka, a Corbyn ally, would have their way on Jews in Israel, how many British workers would lose their jobs. How much worse would British consumer become?

The Palestinian economy’s core problem

The Palestinian economy has never been large. Advocates of the cause of the Palestinian Authority (PA) have ritually blamed Israeli occupation for the financial woes of the people of the streets of Gaza and Ramallah. The threatened sanctions of the USA this month now force us to confirm the facts hidden behind the rhetoric.

There are two issues that cannot be disputed. The Palestinian economy is tiny compared to that of Israel. Exports in July 2017 were valued at a paltry US$8.1m, primarily to Jordan. And the continuing the struggle with Israel, especially through the use of terror from Gaza, understandably enforces the government of Jerusalem to restrict movement from the Palestinian territories.

Statistically, the economy is contracting again. GDP growth in 2017 was down slightly at 3%, and a further slow down is expected in 2018. There are few positives. West Bank residents have finally been allowed to receive 3G internet services in recent weeks. And overseas aid still plays a primary role is supporting key services. To take just one instance, The British Parliament reported in October 2017 that it funds “around 25,000 young Palestinians to get an education, provides up to 3,700 immunisations for children, and around 185,000 medical consultations annually.”

Therefore, it can only be assumed that if the USA is to cut at least US$100 million of aid to the Palestinians, that will be a significant blow for its social services. What is disturbing is how you have the feeling that the Palestinian economy could be managed so much more effectively and efficiently.

The World Bank long ago confirmed that under Israeli supervision the Palestinian GDP grew annually in real terms by 5.5% even beyond the Oslo Accords. That achievement is long forgotten. And corruption has long been endemic in Palestinian politics has closely documented in previous years by the Funding for Peace Coalition.

The evidence indicates that the pattern of poor financial leadership in Palestinian society has continued up to today:

  1. In 2017 alone, despite their meager funds, the PA under President Abbas paid out over US$350 to Palestinians convicted of crimes of violence against Israelis. The sums vary according to the amount of death caused.
  2. Earlier this month, Israeli customs officials:discovered the largest ever consignment – including thousands of items – of military clothing including vests for holding military equipment. Also seized were thousands of pairs of special military boots and winter jackets in camouflage colors. The Gazan importer of the consignment, which originated in China, was due to receive it via the Kerem Shalom crossing.

    Presumably, Hamas had paid for the goods.

  3. At the same time, we have learned that due to a power struggle between the PA and Hamas, people in Gaza are being forced to pay taxes. This will include the imposition of 17% VAT.
  4. And of course, there is the near-farcical news item earlier this week that “even as the Palestinian Authority faces major funding cuts from the US, it has purchased a new luxurious $50 million private jet to be used by President Mahmoud Abbas.”

I would love to read a serious analysis of how much the Palestinian economy could grow by over 10 years if (a) the struggle against Israel was political rather than a military conflict, and if (b) transparency and accountability could be truly applied.

Israel’s medical system: The Palestinian interface

During the month of December, the UN is expected to pass 15 resolutions condemning Israel. This is five less than in 2016, when the UNGA did find the time to tick off four other countries. Just how fair is this castigation of the modern Jewish state?

To answer the question in depth would take a book, of several volumes. So let us concentrate for three minutes on the medical sector.

In the past, I have written extensively about the Wolfson Hospital in south Tel Aviv, which hosts the Save A Child’s Heart scheme. Offering high level medical services for thousands of infants around the globe, roughly 50% have come from the Palestinian territories. For the record, the aid includes training for local doctors and hosting families of the children on site.

In the north of the country, Israel has treated a similar number of refugees from Syria since 2013. It is an operation that has no equivalent for all the world effort that has been distributed to tackle this humanitarian disaster. And it is even more remarkable considering how the two countries have no diplomatic relations.

And then there is little-known and near heroic story of Dalia Bassa. She is the health care coordination officer of the Civil Administration in the West Bank and Gaza (COGAT) , and is one of the few officials of either side to win the praises of just about everyone. Now 66 years old, Dalia has been working in this field for 47 years.

It is estimated that she is responsible for coordinating the medical attention received by around 5,000 Palestinians every year in Israeli hospitals. These are mainly life-threatening situations. Just as significant, COGAT makes strenuous efforts to ensure that Palestinian doctors are also trained. Hundreds of training sessions take place annually.

To make the point, the Israeli newspaper “Yediot Ahronot” was allowed to accompany Bassa last week on a visit to a 150-bed private hospital just outside Ramallah. 14 floors high, Istishari was opened in 2016 and has treated such notables as President Abbas. A further 850 beds are planned.

During the trip, Bassa sought to help a doctor extend his visa. She also looked for ways to extend cooperation. After all, the hospital lists several doctors who have been trained in Israeli hospitals, such as Hadassah in Jerusalem. Its PGD unit is so advanced that a few Israelis have found their way there to test the state of difficult pregnancies.

And meanwhile, this week, you can expect further condemnation of Israel at the UN. Makes sense, don’t it?

Is Israel a model state?

According to Emily Thornberry, the British Labour Party’s Foreign Secretary-in-waiting, Israel is not a model state for its neighbours to emulate. And her core argument is based on her judgment of Israel’s occupation of the West Bank and the Golan Heights.

Thornberry is a lawyer, possessing a strong background in human rights. So, what she says does not just sound politically correct. Clearly, she knows what she is talking about.

But I could not believe her logic was that simple. First, it makes those countries surrounding Israel less of pariah states. Strange that. Check out for yourselves on Google what Thornberry herself has said about Egypt and Saudi Arabia, to name but two. Nothing very complimentary. On the other hand, she never complains about the abuse of human rights by the Palestinian Authority or Hamas.

Second, if Israel is not her model state, then who is? I assume from the interview with her that is not referring to any members of the Arab League. I assume she is not referring neither to China nor to Russia. Obviously, she detests the policies of America under Trump. And she is so critical of her own government, that she has effectively ruled out the UK.

In other words, she does not have a model country in mind. Her statement is purely designed to denigrate the state of Israel, the sole democracy in the Middle East. What we are left with is a politically correct stance that is acutely ridden with poison. Next she will be asking us to believe that her leader, Jeremy Corbyn, is a Zionist, when the man cannot even utter the word “Israel” in a civil manner.

I am reminded that last year at Cambridge University, a motion was debated suggesting that Israel is a rogue state. The pro Israel supporters encouraged the audience to vote ‘yes’ on the grounds that Israel is so different – ie so much better – than its neighbours that it is obviously rogue. For example, according to Freedom House, Israel is the only country int the Middle East that is ranked as “free”.

I will leave you with a taste of Israel and how its Arab citizens view their country. I hope this will allow you to assess for yourselves if it is a model for democracy. (My thanks to bloggers Ellis Simpson and IsraellyCool).

Palestinian economy; and the good news is…….

The World Bank’s latest report on the Palestinian economy points describes 2% growth rate in Gaza, trying to support an unemployment rate of over 40%. Clearly this is unsustainable. What can be done?

The recent moves of reconciliation between Hamas and  the Palestinian Authority (PA) offer some hope. According to Doron Peskin from Concordmena, The agreement should lead to an extra US$165 m of support from the UAE. This will be in addition to the current annual payments of:

  • US$140 m from Iran
  • US$120m from the PA, primarily for salaries and electricity
  • US$100m from Qatar
  • US$50m from Turkey

Tax revenues are rarely revealed but Hamas leaders clearly find a way to finance their own lavish life styles, assumedly from willing local contributions.

Clearly all of these amounts are fickle. For example, the UAE contribution is apparently dependent on former Gaza bully and aspiring successor to President Abbas, Mohammed Dahlan, being handed some level of power in the territory. So, what other revenue sources can emerge?

One possibility is the extraction of the estimated 32 billion cubic meters of national gas just off its coast line. There are rumours that an agreement has been signed with a Greek developer and a contractor called CCC. However, concrete details remain sketchy.

A second source of relief could come from “impact investing“. For example:

A project to produce tablets for schoolchildren and their parents, a company that reduces the need for pesticides, an IT development centre in a crisis-ridden location and a bond to fight type 2 diabetes….They are all cited by investors and entrepreneurs as examples of impact investments in Israel and the Palestinian territories.

Yet again, the question remains if political stability will allow enough such entrepreneurs to come forth? There are already reports of the PA arresting Hamas representatives.

Another angle could be a hoped for relaxation of central control of the Palestinian economy. One small indication of change is entrance of a second mobile provider in Gaza. The hope is that prices will drop, service will improve, and thus improved corporate taxation will allow the exchequer to benefit.

The reality is that Gaza needs open borders with its neighbours. This is unlikely to happen so long as Hamas considers Israel to be a pariah state and wages war against it. This policy was most clearly indicated last week, when the Israeli army destroyed a tunnel from Gaza. Those Palestinian soldiers killed had crossed the border, underground. (It should also be noted that it takes considerable investment and raw materials to construct such tunnels.)

The unfortunate bottom line is that the Palestinian leaderships can always blame Israel for their woes. With a willing international community and a supportive set of UN institutions, this stance absolves them from any form of responsibility. Hoorah!

And meanwhile most people in Gaza will continue to be dependent on handouts.

Israel’s contrasting economy – not what you may expect from intelligence

Israel’s economy is a study in contrasts“. Thus headlined “The Economist” magazine a few days ago.

The article is wide in its scope. For example, it highlights the desert city of Beersheva as a world leader in creating cyber technology. And that is just for starters. The economy grew at 4% last year. Unemployment resides at a lowish 4.3%. Public debt at 62% of the GDP is one of the best ratios in the OECD. The shekel currency has appreciated by 13% against a basket of leading global currencies. And so on.

The magazine does feature the weak side of the Israeli economy. Restrictive import and licensing practices keep the cost of food unnecessarily high. Productivity stats are poor. And with boring predictably, the authors cites Israel’s defense policy for the main cause of the a weak Palestinian economy. Thus, in real terms, “Gazans are about 25% poorer today than they were at the time of the Oslo Accords”.

This is an argument that sounds politically powerful. However, it bares up, neither in the numbers game nor against the facts on the ground. First, as I have mentioned in the past, when the World Bank examined the Palestinian economy prior to 1994, when it was governed by Israel, “the annual growth rate (for the period 1968 to 1999) establishes itself at 5.5%.” As the author Sebastian Dessus observed, this was one of the highest rates in global terms, even allowing for substantial population growth.

The point is that this begs the question as to why the Palestinian politicians refuse to allow cooperation with Israel.

And then there is 8200, renowned as Israel’s high-tech unit in the army, whose geeks produce software and hardware that James Bond filmmakers cannot even dream about. In parallel, for some years, many of the alumni of this elite group have struck out in the start up world. And it is no secret that against what might be considered assumeded norms from around the globe, they have been openly seeking cooperation with the Arab sector in Israel.

Well the 8200 “Hybrid Accelerator” has just initiated its latest round of intakes. They include SAF, Brainkos and Shareshipper to name just three of the seven involved. One cardinal condition for acceptance into the programme is that each team must include at least one Arab member on its staff.

It is this form of contrast which sets the Israeli economy apart, especially from those of its neighbours. This approach, embracing the views of all religions and backgrounds, that is one of the key reasons why Israel has become known as the start up nation. And that is why “The Economist” is able to report on such positive economic stats for the Holy Land.

Israel’s independence and the relevance of Zionism today

Earlier this week, I wrote how Israel’s 69th birthday party, the celebrations for Independence Day, reflect its amazing economic progress over the decades. In this third and final review, I want to look at one of the lesser known aspects of Zionism – how to relate to Arab minorities.

While pre-state / pre 1948 Zionist leaders fought amongst themselves, many accepted that there must be room for non Jews to play a full roll in the new country. Given geopolitical dynamics, that statement has not been easy to fulfill all the time and there is still much to be done. What can be said is that today, about 25% of the population is not Jewish and this is roughly represented in  the Kenesset, the Israeli Parliament.

How does this outreach manifest itself outside the realms of politics? I want to delve into the complex situation in Syria. The international media, even those outlets known to be hostile to Israel, has often reported and filmed how Israel has been treating thousands of wounded civilians fleeing from the battles in Homs and elsewhere.

I have read an analysis on the activity of the hospital in Nahariya. This is located near the Israeli-Lebanese border and whose managing director is Dr Masad Barhoum, an “Israeli, an Arab and a Christian – in that order“. Since 2013, the hospital has looked after about 1,600 Syrians, roughly 70% of those treated in Israel. The average period of hospitalisation is about 23 days, which reflects the seriousness of the injuries. And the cost of this treatment, estimated in the hundreds of millions, comes out of the purses of the taxpayers.

Remember, from time immemorial, Syria in its various forms has displayed nothing but outright hostility to Israel. And it is difficult to latch on to similar outreach work from Arab countries in the region. In the worst case scenario, Iran is investing its precious oil revenues in strengthening the armies of Hizbollah and Hamas, the very opposite of what Israel is practicising.

My hope is that when there is a Palestinian leadership that comprehends what this form of Zionism can offer them – as per Egypt and Jordan previously – then the path to peace can open up for all.

The business of the Israel business boycott

Boycotting Israeli businesses has been a policy of Arab nations since May 1948, when the State of Israel was founded. Just how effective is it today, nearly 70 years on, in a period of globalisation?

The boycott has seen many forms. Initially, the Arab League simply adopted the methodology of the Nuremberg Laws from Nazi Germany. And for decades, most Japanese companies stayed away from the Holy Land. Since the year 2000, the BDS campaign has taken up the call, demanding a disassociation from anything to do with Israel, including overseas players who visit the country.

Surely, over the years, there has been an unmeasured level of success of the messages of such policies entering the minds of neutral thinking people. The result is an increased distrust or worse of Israelis for some. But more than that?

My wife was recently talking to a leading techie in one of Israel’s premier IoT companies. He frequently travels to exhibitions, where Israeli companies are sought after. Any talk of a boycott is simply a joke. Business is business, and political vicissitudes have no place. And that is good for all of us.

As proof of that, look at today’s announcement by SAS to relaunch its flight schedule between Sweden and Israel. Now the Scandinavian country is no friend of Israel’s on the diplomatic scene, to say the least. However, the combination of tourism and business disrupts those paths towards hatred.

To quote from today’s announcement coming out of Israel’s Ministry of Tourism:

The following companies (have also) announced the opening of new routes(to Israel): WOW, Ryanair, Wizz Air, Hainan Airlines and Air India………..Incoming tourism increased 24% in the first quarter 2017 on the same period in 2016.

“Boycott” was a term born in violence in the 1880s. It was hijacked by the revolting racism of the Nazis. It is now employed by the enemies of Israel, hatred wrapped in politically platitudes. Ironically, BDS has a lot of support amongst leading Swedish politicians.

Let us hope the new trade and transport agreements show the way forward for all towards peace for all.

The conflicting trends of the Palestinian economy

For years, the Palestinian economy has been a dominant theme on the minds of international politicians and diplomats. Ironically, in an era of ‘fake news’, it seems to have fallen down in the pecking order of world issues. Is that because the champions of the Palestinian cause like Presidents of Syria and North Korea are more demanding, or has the reality on the ground changed?

There is no doubt that there is increasing evidence that the Palestinian economy has been on the up for some time.

And so the list goes on. However, in the opposite corner, there are plenty of downers, not helped by the insistence of Hamas in Gaza to devote resources to war rather than basic human development. For example: –

And meanwhile, in defiance of American law and European directives, the PA continues to fund the families of Palestinian martyrs and the welfare of cell mates in Israeli prisons. Officially, this was valued at US$180 million in 2016 alone. And it should be pointed out that much of the PA budget comes from overseas donations, which means the pockets of Western taxpayers.

In truth, the average Palestinian is still very poor. The official GDP is less than that of Egypt. And yet, the weaponry of Hamas becomes more sophisticated by the month. Leaders of the PA and Hamas live a life of luxury. Corruption is never far away from the talk of the day.

It is sad to see. The Palestinian economy, that could be so vibrant as its nascent high-tech industry is testing, continues to be doomed by leaders concerned with violence rather than people.