Archive for September 2011

Why is Israel allowed to be different?

September 28, 2011

Jews in Israel and across the world are about to celebrate their “New Year”. 10 days later is a fast day, the Day of Atonement. It is a period of celebration, combined with deep reflection.

The past week has seen several leaders in neighbouring areas, calling on the world to take action against Israel, including a call for economic sanctions.  So what is it about Israel, that when they do their own reflecting, gets them so bugged?

Is it because Israel has invented  so many modern technologies which billions around the world take for granted: internet chat, solar window, minute digital cameras, electric cars, disk-on-key, etc, etc, etc.

Is it because of the availability of free speech, so craved for in other countries. Last Friday, Israelis were able to see all of the verbal debate between Netanyahu and Abbas at the UN. However, the screens in Ramallah went blank when the Israeli Prime Minister spoke.

Is it because of the fact that Israel can boast 9 Nobel Laureates, including 5 successes in the past decade alone? For a country which still has officially less than 8 million people and few natural resources, that is an amazing achievement. It is just over 1% of all the awards.

And of course there is the contentious issue of Jerusalem, the centre of three great religions. Well, I ask you: Where else in the world are the praying rights of such diverse sectors maintained, protected and upheld, despite the momentous geopolitical pressures surrounding the city every day? That is some achievement in my view.

As the year 2011 begins to wind down in the econmic dumps, Jews are starting to celebrate the lunar year of 5772. Israel’s economy has had another boom year.  Next year,who knows? But I bet there will still be some jealous people out there, hiding their frustration in politically correct hate, because Jerusalem endeavours to protect its precious freedoms.

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Mentoring – having a look at your client’s skill-set

September 24, 2011

I am plodding my way through David Clutterbuck’s book “Everyone Needs a Mentor”. Ambitiously described as UK’s number one mentoring book, the subtitle is very poignant – fostering talent in your organisation.

Talent – there are many different ways to apply this word; intelligence, nous, skill, calibre, clear thinking, and….well don’t let me stop you.

In the past week alone, I have come across this issue three times, each one in a different context.

Deborah (not her real name) has been drifting commercially for a few years. With a first degree from America, she now lives in central Israel. She has asked me to look at a new idea of hers. In one of our first discussions, I suggested that she consider what skills she has and how they can contribute to the project.

Briefly, she cut that part of our meeting, declaring the subject irrelevant. Since then, there has been progress, but it has not been rapid. But a few days ago, she found her mantra and asked me for advice aas to what kind of partners she needed.

“What kind of tasks need to be fulfilled?” I responded.

And Deborah duly walked in to my trap, when she asked if I thought she had the right abilities. I started to recall the earlier discussion re talent, and my client was stunned that she had previously ducked out of the conversation. Her face indicated that it is time for a change.

Subject number two is the engaging and – lady, Sarah. Similar to Devorah, Sarah has held a number of positions over the past few years, not all in her field. However, she has now decided to become self-employed and strike out on her own. Can I help her?

Surely, and by the way I quickly wonder: “What are you skills?” Silence! Hard and fast bemusement. It is as if the subject is either taboo or too painful for contemplation or simply the question of a lunatic.

And the amazing thing was that I actually knew the answer, which the client struggled to face up to.

Finally, I ask you to meet 37  year old, Mr Ilan Bracha, who was featured in today’s weekend paper. Ilan grew up playing football and eating fast food in a poor town, south of Tel Aviv. When he enlisted, he found his way into a crack unit.

After the army, Ilan left Israel to “try to make it” in New York. Skipping university, he learnt his business acumen on the street. 15 years later, he is considered one of the city’s most successful real estate agents. How?

Ilan Bracha recalls what the army had to teach him; be smart, think ahead of the enemy (or competition) and be aggressive.  Ilan Bracha knows what he has to offer his 117 agents and does it very well.

It is this understanding of Bracha’s – the open appreciation of his skills – that most mentors try to instill in their clients.

World economic gloom and Middle East anomalies!

September 23, 2011

So, it’s official. Yesterday, Thursday, the world’s banking elite queued up in front of the media to announce that policies  of “muddling through” are passe. Stocks and shares duly plunged, with London’s market estimated to have lost a mere 64 billion dollars…..or was that pounds.

Everybody knows that it is all about handling debt. To be more precise, it is about grown up politicians around the world not having the sense and courage to take the responsibility to manage their own debt.

For example, in America, Democrats and Republicans fiddled around before they just about squeezed out an agreement to ensure that Washington did not default. In Italy, the Prime Minister has been too busy fiddling around per se in order to handle has country’ financial black hole. Madam Merkel in Germany is preoccupied with pending political defeat, and that conundrum is hindering her from bailing out the Euro.

Debt, debt , debt and nobody knows how to make it go away. So here are my two suggestions. They will require some bold moves from decision-makers, who are often intent on just being politically correct. Let’s venture off to the Middle East.

First, I wish to turn your attentions to the oil producers. Much of the debt of Western consumers ends up in the pockets of petroleum’s big guys, who are not often the best proponents of democracy. So, by chance, let me pick on the world’s sixth largest manufacturer of oil, whose leader is rumoured to have laundered a fortune in bank accounts around the globe.

The problem is that I am talking about Colonel M Gaddafi. And nobody seems prepared to empty his treasure trove worth…well probably well over what the London stock market leaked 24 hours ago.

Contrast that thought with the fact that the rich G8 countries – including the faltering economies of America, Italy and Britain – have pledged US$80 billion – I repeat EIGHTY BILLION DOLLARS – to support Libya and others. And now it emerges, that the Libyan rebels have discovered a  US$23 billion “bonus” in tha vaults of the central bank.

If I can spot these misfits, why can’t the politicians?

Item number two is Israel, currently taking its annual whipping at the UN. Understandably, the Palestinians are demanding recognition from the Assembly, while doing a good job refusing to acknowledge the needs of  Israel’s security.

But just step back for a moment and look at Israel’s economy. Despite being surrounded by enemies and seeing European export markets dry up, the IMF is still expecting Israel’s growth for 2011 to climb to 4.8%. Yes, this is revised downwards from previous assumptions, and yes, 2012 will be lower. How much so?

3.2%, with inflation down and unemployment expected to hold steady. America et al don’t come anywhere are not predicted to come anywhere near this achievement. (And the numbers are supported by the Bank of Israel forecasts.)   

So, if world decision-makers stopped criticising Israel and started analysing its strengths, would stock markets be where they are today?

Creating a socially just economy – the Israeli attempt

September 19, 2011

Israel was founded in 1948. For decades before and afterwards, the leading political elite came from the socialist side of the spectrum. Members of the kibbutz movements often figured in key positions in society and industry.

Those days have gone. As the economy was freed up from 1986 onwards and with the advent of globalisation, Israel’s economy has usually registered around 4% growth each year during the past 10 years. Jerusalem is now a full member of the OECD.

And yet?

The summer of 2011 saw hundreds of thousands take to the streets in protest at the lack of housing,the  limited availability of reasonably priced housing for first time buyers, inflated prices of basic goods like milk products, and a feeling that the well off were doing well on the backs of others.

To take this one stage further, 16 family groups now control around 50% of economic output. This concentration of economic resources is arguably having a negative impact on different sectors and restricting competition. It is not just a case of envy. The consumer suffers. 

So what has the Israeli government done about all this? Two academic committees are due to report over the next few days. The Trajtenberg subcommittee, looking at changes in the composition of the Israeli budget, is set to recommend diverting sources from the enormous defence expenditure to social or infrastructure  projects. In parallel, there are plans to prohibit the wealthy from controlling large corporations, even when they may barely hold 10% or 20% of the shares.

Many of these considerations have still to be debated before new laws are legislated. Interest groups will work hard behind the scenes. But for all this noise, one small fact has been near ignored.

Back to the OECD. As Sever Plocker pointed out in the Hebrew press, most developed European countries spend around 25% of their budget on social items. In Israel, that figure collpases to around 15%.

If politicians were to understand the implication of that difference, they might finally begin to understand why people are so unhappy with how resources are allocated in Israel. And, amzaingly, these decision-makers might begin to really change things for the better. Now there’s a dangerous thought!

 

Networking – and your so called comfort zone

September 18, 2011

I love the Jerusalem Business Networking Forum. Over four years, Joe van Zwaren and Avigail Frij have set up monthly meetings that have resulted in dozens of business deals and employment contracts.

As the event moderator, I have great fun creating the structure of each get-together. Last week, over a hundred people came to listen to a panel of experts, discuss how to secure a new job. If there was one common theme – it was all about networking.

For example, many human resources specialists are ignoring CVs, deliberately turning to the social media for info on likely candidates. Increasingly, more key jobs are being found via word-of-mouth. Websites exist, which aggregate vacant positions. And these factors are not just typical to Jerusalem or to Israel.

As the participants arrived, they politely sat down in the auditorium and waited patiently. The start was slightly delayed and people waited,..and waited. I took the microphone, explained the situation and then took a risk.

I requested that everyone present move three seats down and start talking to a person they did not know. Surprised looks all round was quickly replaced by a deafening noise of interesting chatter. Networking had taken over. Comfort zones were pushed out the door in an instant! People were moving forward. 

As one person indicated afterwards to me: It was only after talking with and listening to so many other people that they realised how many additional talents they had. They intended to highlight those skills over the next few days.

The Financial Times recently emphasised the importance of such meet ups.

“I have got references for amazing people and I have found amazing people to hire at networking events. Many of my best ideas have come after a couple of drinks at the bar and talking to people,” says Michael Acton Smith, chief executive of Mind Candy, the games company. He started Silicondrinkabout, a Friday night social event for developers in London, named in reference to the capital’s so-called Silicon Roundabout tech hotspot in east London.

Where and what next? Each to their own, but don’t ‘keep it a secret’. Yesterday, I was nervously approached by somebody asking if I knew how he could find space for his expanding business. He looked somewhat quizical when I began to mention all the other people he could speak to.

Israel’s economy – confusing the pundits

September 13, 2011

Superficially, it does not look too promising for Israel’s financial planners. The trade deficit widened significantly in August, and the European markets are not looking to increase their imports at the moment. The Tel Aviv stock exchange has lost 25% of its value since January, currently at its lowest point for two years.

And yet, most of the fundamentals are still in place. For example, the banks are not being questioned as in France. Standard & Poor raised Israel’s credit rating last week. And figures released by Manpower show that 25% of companies expect to recruit additional workers in the coming quarter, with less than 10% looking to downsize.

One explanation for that positive sign may be due to the changes in the rate of exchange. The shekel, seen as a strong currency for much of the past year, has began to lose its gloss. It has lost nearly 10% of its value in almost 3 months.

The upside is that this shift will make Israeli exports more attractive and so help to encourage employment.

What next? It is evident that the hope of 4% growth for 2011 will not be met. That said, with inflation in check and a budget debt that can be financed, the Israel economy is still maintaining its positive shape.

World debt, the Arab Spring, and Western “leadership”.

September 11, 2011

The year of 2011 has seen the Portuguese, Greek and Irish economies collapse under the weight of unsecured debt. Italy, a member of the elite club of rich countries called the G8, may be next.

And there is genuine cause for concern that an Italian cold will create an influenza epidemic on the American financial markets.

So, imagine my surprise when I saw a headline that read: “G8 countries pledge US$38 BILLION to Arab states”.   That’s right – 38 billion dollars.

And look who will benefit:

One of the first on the list is Egypt, whose leadership has shown that it is interested in supporting Ankara as it edges closer to Iran. And this weekend, the temporary military leadership in Cairo were amazingly late in preventing the Israeli embassy from burning down, as diplomats literally fled for their lives.

And then there are the pledges for Libya, the sixth largest global producer of oil. The average Libyan may not have benefitted from the petro dollars, but surely Western banks can release money from Ghadaffi’s bulging accounts for use of his former people?

How about some of the richer states like Saudi Arabia and Abu Dhabi chipping in with a couple of bucks for their neighbours? Why does the West always feel so morally guilty?

In comparison, Britain, America et al are trying to introduce austerity packages whilst promoting job packages. What a pickle.

I live in Israel. Last Friday, S&P raised the country’s credit rating to A+. Despite an expected downturn in growth for 2012 of around 2.5%, the agency noted that:

The rating action reflects our view of Israel’s improved economic policy flexibility as a result of strong growth and careful macroeconomic management…Israel is on a credible path toward continued government debt burden reduction and stronger external indicators.

 In September, the next session of the UN will open in New York. Israel will again be criticised for the problems of the world.