Archive for November 2008

Young Israeli companies riding the storm

November 30, 2008

Yesterday in Synagogue, I sat next to a friend who works for an international IT company in Jerusalem. Between the prayers, he voiced concern that his company was about to lay off 10% of staff and cut the salaries of the survivors.

Yes, the recession has reached Israel. The retail price index for October is expected to show  a drop of a whole percentage point. Car sales are down 19.7% as against the previous quarter. Gloom, but not doom.

I continue to maintain that the Israeli economy is facing this downturn in good shape. And the Tel Aviv stock market has picked up on that. Over the past 3 months, it has fallen 22%; difficult, but brilliant compared to the 35% of the FTSE’s world index. Let’s take some specific recent success stories.

  1. Johnson & Johnson will acquire Omrix Biopharm for US$438 million. (Omrix is down the road from my friend’s employers.)
  2. A holding company, Medinvest, has raised US$129 million, backed by 7 successful previous exits.
  3. Plurality‘s efforts in the semiconductor business are already making it the target of companies like Intel and other giants. Its success at at a recent Japanese exhibition led to a central feature on Yahoo’s Finance pages.
  4. HP has become the 11th multinational to sign an agreement with Israel’s Office of the Chief Scientist. Along with Deutsche Teleom, Microsoft and others, it will seek local technologies to match their own strategic development strategies. This is on top of their US$6 billion previously invested by HP in Israel.

For all the problems of its pension funds and aging politicans fighting for their reputations, the Israeli economy is telling the world that it has a lot more to shout about. Worth listening, in my view.


The hidden beauty of Jerusalem

November 28, 2008

When you tour aound Jerusalem, you know that you are walking on history; Biblical, Roman, Turkish, a recent war – you name it and we’ve got it. Guests are consistenly amazed at the wealth of stories or parables readily available. Even as a local, I am constantly ‘watching’ secrets emerge out of this precious city – from its walls, the back streets, its houses of worship.

Take last night. My wife and I wandered into the Ein Kerem neighbourhood along the south west edge of the capital. A mile down the road is a site made holy to Christians by John the Baptist. On a far hill is the Holocaust Museum and the silhouette of a railway carriage, recalling past horrors. Today, Ein Kerem is an artist quarter, replete with stylish restaurants housed in structures, built by the British army during the Mandate period. Every 5 yards, and a different twist in the time tunnel.

For the record, we had brilliant fish supper, balanced by a superb cabarnet from the Golan wineries.

Now contrast all that with our tour last week of the Nahlaot region. This area was set up in the 1920s, when Jews were forced to flee parts of the Old City. The wheat fields were gradually replaced with small houses. The open wells, collective washing lines, and public ovens of 90 years ago – amazingly, several are still visible today.

The guide, Jackie Levy, reeled off stories. Each building seemed to own its own foods, smells and hero. Many of Levy’s characters had seemingly grown up in “a glorious and happy poverty”.  

Nahalot backs on to the colourful fruit market called Machane Yehuda, where many of its residents work. Fittingly, it is here where you can see people from all backgrounds, flocking to sell and buy, effectively creating a new round of fables.

After terror – How Israel encourages coexistence

November 27, 2008

The events in Mumbai have proved that terrorists continue to plunge to ever new depths of violence and hatred. Israel is no stranger to similar senseless carnage. The country has learnt to live with it, and still seek ways to live in harmony with internal minorities and neighbouring countries.

Another 2 examples of this coexistence came to light this week.

The multi-cultural school of Kfar Kana was recently portrayed on an internet TV station. The school is located inside Israel’s pre-1967 borders and is one of 3 such places in the country. The hundreds of pupils learn to speak the language and appreciate the religion of each other. The onus is not just of the schools 2 co-head principals. It is often the parents, who are the true heroes, battling trends in their respective societies. 

A few miles to the east is Nablus, a key Palestinian city. Last week, it hosted 700 investors, a direct follow up to the conference held in Bethlehem in May this year.

Significantly, the Israeli Civil Administration (ICA) played a major role in ensuring that the delegates were able to arrive and depart in comfort and in safety. Lt Col. Dacse Salame, head of the ICA’s Economics Branch observed the mutual importance of such an event, when he said that: “The Palestinian Authority has made serious preparations for the conference, and we, the Israeli side, will do our utmost to ensure a smooth and successful event. The financial benefit that the conference should provide for the Palestinian economy led us to set up a joint situation room, which will be able to solve any problem around the clock.”

These efforts – the moves to developing trust and recognition – that all terrorists reject. That is what is common to the murderers in Bali, from Gaza, in Mumbai or on the London underground.

The Palestinian cause – a moral consideration

November 24, 2008

I was confronted with a horrific picture in Friday’s newspaper. 3 Palestinian policeman, standing in a recuperation facility, missing 4 legs between them. The one of the left had no left leg. The guy on the right had no right leg. In the middle, the former serviceman was portraying his 2 stumps.

The photo? I was afraid that this was a brave Israeli journalist highlighting an excess by soldiers.

The main article illuminated a dark tale of horror, rarely exposed by the international press. Yes, these gentlemen were probably considered terrorists by Israel not so long ago. However, their injuries had resulted from a totally different, internecine war.

Back in August 2008, Hamas made a deliberate effort to oust Fatah-linked policemen from the Gaza region. Fatah is the main arm of Palestinian President Mahmoud Abbas, who in turn arrested many Hamas supporters. Of the Fatah fighters who fled from southern Gaza to Israel, 22 were mauled by their Hamas captives. Deep brotherly hatred overcame any human compassion.

Of the 22, 3 appeared in the photo. It was taken at the Tel Hashomer hospital outside Tel Aviv, which has treated thousands of Israeli soldiers and terror victims over the years. To quote Dr Yizhak Ziv-Nir, head of the medical team: “This is a rare opportunity to exchange the hand of friendship to our neighbours”.

The article explains what the policemen experienced in Gaza. Trampling on their own children in front of their eyes, beatings with metal rods, jumping on to blocks placed on their bodies, kneecappings, etc.

I have no idea what these people must be feeling to be treated by Israelis; Israeli doctors, who because of them and their fellow Palestinian militiamen, have become world leaders in rehabilitation. The irony!

I do know that this aid is not one off. Take the role of Save A Child’s Heart programme in south Tel Aviv, which has treated hundreds of young Palestinians with heart complications. Bethlehem hospital has aligned itself to a leading Jerusalem medical facility to treat breast cancer. And the list goes on.

The silence of Amnesty International, Human Rights Watch and other organisations on such brutality is simply sickening and hypocritical. Is some torture politically acceptable? These people are effectively refugees from Gaza, another of the ironies engulfing Middle East diplomacy.

Back in the Palestinian camp, I recall the excellent book, “Cain’s Field” by Matt Rees, author and former Time Magazine correspondent in Israel. He concluded that only when the Palestinians (and the Israelis) resolve key internal struggles will peace enter the region. The rule of Hamas has emphasised that conundrum in a most frightening manner.

Kassam rockets – how terror against civilians becomes permissible

November 21, 2008

Ashkelon is a growing costal city. For tourists, it is replete with Roman ruins. In biblical times, the Jewish prophet, Samson, conquered the Philistines nearby. Today, Ashkelon’s new power station provides Hamas – ruled Gaza with approximately 70% of its energy requirements.

Ashkelon is home to over a 100,000 citizens, trying to live their lives in peace.

Instead, the residents live with the ever present threat of Kassam rockets, launched almost daily from Gaza. Take November 14th, when 4 of the 122mm Grad class rockets were launched at the city. One landed in the main shopping centre.

For those who do not know, a rocket is not a sophisticated weapon and cannot be properly directed, unlike a missile. Thus, a rocket’s targets are randomly picked out. Frightening! In fact, it’s downright immoral and disgusting.

There are those who try to explain away the actions of the perpetrators. The weapons are used for defensive purposes only, it is claimed. But Ashkelon has no military structures. Its hospital (which treats Palestinians as well), the academic college, schools, and even the power station itself – they have all been targeted by Palestinian factions.

Others argue that the Palestinians have a legal and moral right to reply to incurssions by the Israeli military into Gaza. OK, but none of that gives Hamas or the Islamic Jihad a mandate to target civilians, aimlessly. 

Check out this link. It shows Kassam missiles, being fired aimlessly from a school vicinity. If you ask me, the groups responsible for such actions are using politically acceptable spin to cover their own crimes.

I spoke to a leading businessman, who lives in Ashkelon with his family. He explained that an outsider cannot understand what it is like to cope . You may get a few seconds notice, before the “incoming” lands. The proverbial “whoosh” becomes as chilling as the deafening explosive destruction of the final impact. Where did it land? In the neighbour’s garden? The industrial zone? The roof of our local grocery?

Why should they have to live like that?

Ashkelon is under attack. And the world does not care! The UN’s meagre response is to demand that Israel desists from protecting itself against the launchers of terror. Viva Munich and 1938…. only 70 years ago.

Israel’s economic importance – UK case study

November 18, 2008

Last month, I wrote about Shimon Peres’s forthcoming trip to the UK. I have just received an official briefing from “Parliament Today”, summarising the meeting of Peres with Lord Mandelson, who has the portfolio of Business Secretary in the cabinet.


The following are edited highlights of a long statement. They demonstrate exactly how other countries can benefit from Israel’s desire for peace and its global commitment.


It reads…….

The UK aims to raise trade between the two countries to £3 billion per year by 2012. Israeli President Shimon Peres, a Nobel Peace Prize Winner, and Lord Mandelson jointly addressed a meeting of about 200 UK business leaders at Mansion House in London, hosted by the Lord Mayor of the City of London Ian Luder today.


The Business Secretary said:

“This is an age of great promise and immense global change – driven by the rapid development of new technologies and powerful flows of ideas, people, goods, services and capital across borders. Interdependence defines this new world.”

Lord Mandelson said that nowhere was this more evident than in the current global financial crisis, “the first great test of our new multi-polar globalised world.” “We cannot act by ourselves any more. We have to act together or we will not act at all,” he said.


The UK has the aim of achieving bilateral trade worth #3bn per year by 2012, a rise from the 2007 level of #2.3 billion. Opportunities exist in financial services, bio-technology, ICT, medical equipment and software, and also in creative industries, including film-making.

“Your country’s prudent fiscal policy, structural reforms and investment in education and hi-tech industries have encouraged strong growth, foreign investment and consumer spending and left your economy well placed to withstand the current global downturn,” Lord Mandelson said.


The International Monetary Fund recently forecast that the Israel economy, which has grown at over 5% per year for the last three years, will grow at 4.3% this year and 2.8% in 2009.


Notes to Editors:

1. Israel is the UK’s third biggest export market in the Middle East with leading British companies including HSBC, Unilever and Rolls Royce managing major interests there. The UK is also Israel’s third largest destination for exports. Over 250 Israeli firms are based in the UK.

2. Over 40 Israeli firms are now listed on the London Stock Exchange. Fourteen are listed on the Alternative Investment Market.

3. UK Trade & Investment is the UK Government’s international business development organisation, supporting businesses seeking to establish in the UK and helping UK companies grow internationally.

Palestinian economics – recent updates

November 14, 2008

The world economic slowdown has kept the Palestinian economy off the front pages of world media. Sure, the “Free Gaza” campaign has sent in a few boats to highlight how they see that Israel is to blame for all the poverty of the Palestinians.

The facts on the ground indicate a more intricate set of issues.

One such story is the olive harvest, worth an estimated US$140 million to Palestinian farmers. Over the past few months, there had been concerns that Israeli military movement would hinder the harvest. But to quote an army  spokesperson:

As a part of preparations for this year’s harvest, meetings were held between Israel’s Civil Administration and Palestinian counterparts. The meetings included representatives of the various villages, as well as important figures from the Palestinian Authority (PA) including the PA Olive Oil Department…”

The statement continued: “The harvest has yielded approximately 24,000 tons of olive oil, compared to last year’s 8000 ton yield. 114,000 tons of olives were harvested (compared to 41,000 tons last year), 7,000 of which will be pickled and 107,000 tons are designated for production of olive oil. An estimated 7,000 tons of the olive oil produced will be marketed in Israel.”

On the downside are trends in Palestinian society, which do not enhance economic development. A press release form Hamas on November 5th referred to the proposed “noble Islamic religious law”. This will impact directly on the banking system, employment laws, contracts and other areas of commerce.

This legislation will directly contradict the reforms demanded by the IMF and The Quartet. It has to be noted that a few of these changes have already been implemented by Fayyad, the Prime Minister under President Abbas. Fayyad, a banker with an international reputation, has been consistently ignored and rejected by Hamas.

The law coincides with the continuing decline in basic freedoms, as reported by the Palestinian NGO, the Independent Commission for Human Rights. It is not not just the arbitrary arrests or unwarranted attacks on private property. In October, the Commission received 70 separate complaints from teachers being dismissed by the Palestinian Ministry of Education because of their private political views.