Posted tagged ‘Israe’

Israel’s economy – half term report, June 2011

June 26, 2011

Israel’s economy continues to bubble along.

Happy times it would seem.

It is the job of the governor of any central bank to point out the potential dangers around the corner. Israel’s Stanley Fischer is in the middle of an apparently successful campaign to dampen the housing bubble. And at the end of last week, in an interview with the Financial Times, Fischer questioned the Finance Minister’s propensity to spend.

Fair enough. Just as worrying is the potential fall out from the Greek financial crisis and, in parallel, from the so-called Arab Spring. If Europe is sucked down by Greece, Portugal et al, Israel’s economy will suffer. For example, the UK alone is one of Israel’s strongest trading partners.

Similarly, once the troubles in Libya, Syria and elsewhere have finally evaporated, the results will necessarily bring stability to the region. We can already see how Egypt will almost certainly raise the price of its gas exports to Israel very sharply. The weakness of the Damascus regime has seen one border incident with Israel, provoked by Iranian revolutionary guards, and we have probably not seen the worst of the violent disorders.

In the words of Niall Ferguson, a leading economic historian:

Beware the economic consequences of the Arab Spring. ….(Once the) euphoria phase” of revolutions is over, economic disaster such as higher prices, greater uncertainty and capital flight always follows. …And the magnitude of capital flight from Egypt right now is roughly 10 times the aid promised to Egypt by the United States and Europe combined.

There is a third issue, ignored by the foreign media, but felt daily by the Israeli public. I am talking about the silent stranglehold of key monopolies.

About two weeks ago, the price of cottage cheese, a staple item for many families, rose yet again. A simple facebook campaign backed by a howling media smelling blood resulted in a backdown. Dominant local manufacturers, protected by tariffs, which were imposed by politicians linked to interest groups, had been free to do what they had wanted for far too long. Amazingly, there has rarely been much variation in price between the “competing” firms.

But it does not stop there. The fruit and veg market is also protected by tariffs. Mobile phone charges are expensive compared to abroad. Petrol and cars are similarly overpriced. It is a rip off, according to one newspaper.

You could ask why nobody has shouted earlier that parts of the economy are simply old-fashioned monoliths, designed for the benefit of a few. For me, a more worrying issue has been the role of the civil service. Why was this huge mass of people not able to teach the politicians how the public had to and still suffers?

So while the stats look rosy, is Israel’s full economy still a story of what could be?

What happens when you boycott Israel

December 24, 2010

It’s almost Christmas time, the season of smiling at your fellowman…except if they are Israeli?

The year of 2010 was marked by an increase international campaign to delegitimize Israel. The musicians, Elvis Costello and the Pixies, cancelled a concert in Tel Aviv at the last moment. This week in Seattle, a series of adverts were placed on public buses, decrying so-called Israeli war crimes. In London, there are now regular demonstrations outside retailers stocking Israeli products. And so on, at great length.

Years ago, if you wanted to protest about Israel, you stopped buying Jaffa oranges. So what would happen today, if you were to ignore deliberately Israeli products?

Teva is considered the second largest manufacturer of generic drugs in the world with facilities in Europe and in the USA. Many of their products end up in the bodies of the poor on all continents. I suppose you could just avoid the company, and either suffer or hope that you could afford the alternatives.

What about Argo? Their equipment is helping thousands of people confined to wheelchairs to start walking again. One application was featured recently on Glee, the award-winning tv programme. Of course, paraplegics in Seattle may wish to remain immobile, but me thinks this unlikely.

And then we have fans of Lady Gaga, Bruce S or U-2. These artists and others depend on technical support from Waves Audio, based near Tel Aviv. Like the music or not:

Waves Audio … will be presented with a prestigious Technical GRAMMY® Award during the GRAMMY Week celebration in February 2011. ……With this presentation of the Technical GRAMMY®, Waves joins a prestigious list of previous recipients which includes such well-known names as Apple Computer, Inc., Sony/Philips, Shure Incorporated and Yamaha Corporation.

And we must not forget Intel. 95% of people reading this item will have a computer whose chip tech had been developed in the Holy Land. And the next generation is already in the planning stage. So, switch off your computers and stop listening to most modern music?

So what is the boycott all about?

The true hypocrisy of the boycott was exposed on a picture of the front page of the newspaper Yediot, this Christmas Eve. The reader saw a stream of illegal refugees from Sudan and other parts of central Africa hiking across the Negev desert into Israel.

You have to conclude that Israel is not that bad for these people to come here. And, assuming that they are persecuted in their home countries, why are those protesters against Israel not uttering a word of behalf of these poor souls. Anti-Israel or just old-fashioned hatred?

Israeli economy: growth or slowing down

July 20, 2010

Israel’s business climate worsened moderately in the second quarter as uncertainty in global markets and Europe’s debt crisis affected the risk level of local companies, Business Data Israel reported Sunday.

Not very optimistic. In the second quarter of 2010, exports were lower by 2.5%. There are clear concerns that the economy is slowing down, especially has Europe struggles to emerge from the credit crisis. Even foreign investment is falling off.

At this point, it is worth taking a breath and pausing for thought. The Israeli economy is still perfoming well, with growth at around 3.5%. It is just that this is not as high as predicted or hoped for.

Trade delegations are still popping over in quantity. I was chatting to a member of a team from Colorado. Amongst several opportunities, he was looking at further gas exploration. For him, what has been discovered in the Tamar field is just the beginning of a long story. The net result will be a massive positive shift in Israel’s balance of payments, and probably with geopolitical fall out as well.

Now consider that Israel appears to have a central budget and inflation under control. Unemployment is at 6.5% and dropping. And when you factor in the expected investments resulting from OECD membership and the Tel Aviv Stock Exchange joining the leading MSCI index, the long term future looks very healthy.

Yes , there are still concerns. Despite a recent weakening, the shekel remains strong against leading currencies, which harms profitability. And, as many have written, the high tech environment demands systematic restructuring; too much emphasis on the wrong technologies.

So, what’s the wrap up? The short term is unlikely to produce any exciting stats. But this is not an indication of a recession. The year 2011 is still looking good.

How cricket helped me gain revenge over Hitler

April 11, 2010

I love cricket. I am not very good at the game. I have not played since leaving school. But I follow the sport avidly.

However, latching on to the matches is just as difficult as participating. You see, living in Israel, we do not receive TV coverage of the games. Phrases like “overs. wicket or silly mid off” do not readily translate in to Hebrew. And most Israelis like immediate sports, which ignore the patience of cricket’s 4 day efforts.

BUT: Last Friday, I found myself in very surreal surroundings. In the heart of Tel Aviv, I was looking out on a game of cricket – yup 22 souls dressed in white (well, mainly white) could be seen chasing a small red ball. The Ra’anana squad was having its first full work out of the season.

Israelis looked on bemused. Why were we not following the rules on baseball? The pitch was plastic matting, allowing bounce to vary dramatically from “leap up suddenly” to “skid through”. And the surroundings did not allow for a village pub, but a main road and Tel Aviv’s high tech centre. Nevertheless, cricket it was.

Players came from multitude of backgrounds and ages. Matt is a New Yorker, who is studying engineering in Haifa and has been bitten by the “English” virus. We were graced with the presence of a career diplomat from Jerusalem, proudly sporting his club cap. Accents betrayed origins ranging from London to Durban and over to Melbourne, via Mumbai.

I was disappointed that there were no cucumber sandwiches on offer at the break. I was secretly hoping for some freshly cut delights without crusts, washed down by traditional stewed tea. But the Australians had turned up with their BBQ, and I had to accept that this was the Middle East. Burgers it was to be.

Some of the guys are serious players and have made it into the national squad. In fact the Israeli team is now in Europe’s second division. This July, Guernsey will host a competition, which will also feature France and Gibraltar amongst others. 

My own performance was mixed. I scored a few runs, but more than a few were taken off my own bowling. I had fun. I was playing a game that I had put to one side at school, because it had clashed with my religious principles. The big matches were held on Saturday, my Sabbath. Here, in Israel, I can practice my faith and worship my sport with equal freedom.

Yes, the muscles ached the next day. As I was reading the weekend newspapers, the value of this “choice” was brought home to me very directly. I noticed that tomorrow, Monday, is Holocaust Day in Israel. Hatred, an inability to recognise that difference is what makes the beauty of mankind, led to the deliberate slaughter of six million of my fellow Jews.

Guernsey is part of Channel Islands, the one part of Britain occupied during the Second World War. Three Jewish women were deported from there all the way to Auschwitz, and did not return. Second Division or not, you bet I will be cheering on Israel come July.