Israel’s economic surge in defiance of adversity

Yoram will be in the US in March, May and August, 2017, available for speaking engagements.

By Ambassador (ret.) Yoram Ettinger, “Second Thought: US-Israel Initiative”
Straight from the Jerusalem Boardroom #218,

1. Notwithstanding Israel’s unique challenges of the chaotically unpredictable state of the Middle East, the Islamic and Arab onslaught, the scarcity of natural resources (other than brain power), the UN enmity, the European appeasement of rogue regimes, systematic criticism by the “elite” media and the attempt to boycott, divest and sanction, the independent, non-partisan quarterly, The American Interest, stated on January 24: “This is there is a new name on our list of The Eight Greats, Israel….

“Israel is a rising power with a growing impact on world affairs…. Large off-shore discoveries of natural gas and oil are turning Israel into an energy exporter [e.g., a $3.5bn-$4bn dollar initiative was just concluded to expand Israel’s natural gas fields]…. Turkey’s ties with Israel strengthened…. Israel’s newfound clout comes from the rise of industrial sectors and technologies that good Israeli schools, smart Israeli policies and talented Israeli thinkers and entrepreneurs have built…. The rise of domestic cybersecurity and infotech economy…. Private investors all over the world look to invest in Israel’s tech startups…. It’s not just America; India, China and Russia want a piece of Israeli tech wizardry…. In the Middle East, Israel has been transformed from a pariah state to a kingmaker…. Never has Egypt-Israel security cooperation been as close as it is today…. The rise of Iran has made Israel critical to the survival of the Sunni Arabs, including the Gulf States…. Israel begins 2017 as the keystone of a regional anti-Iran alliance, a most-favored-nation in the White House and a country that enjoys good relations with all of the world’s major powers bar Iran….

2. Bloomberg, February 16, 2017: Israel’s economy grew 6.2% in the fourth quarter of 2016, its most robust gain since 2014, sending the Shekel to its strongest level in more than two years. GDP for 2016 grew 4%, the most since 2013, supported by record-low unemployment rate of 4.3% in December, 2016. Manufacturing reached its highest level in 7 years. Exports advanced 11.2% and capital investment grew by 7.4%.

3. Israel’s debt-to-GDP ratio has systematically declined (62.1% in 2016), compared with Japan’s 250.4%, the USA’s 104.9%, France’s 97.1%, the Euro bloc’s 91.7%, Britain’s 89%, Germany’s 68.2% and South Korea’s 39.9% (Globes, January 23).

4. In 2016, Israel’s population grew by 2% – compared to 1.2% globally, 0.81% in the USA and 0.18% decline in Germany – identical to Israel’s population annual growth during the last 10 years – 83% due to natural growth and 17% due to Aliyah (Jewish immigration), resulting in a substantial expansion of Israel’s infrastructures of housing, transportation, education, health, medical, etc. (Globes business daily, January 9, 2017).

5. While global venture capital funding has declined during the last two years – according to PriceWaterHouseCoopers, Money Tree and CB Insights – $420mn were invested, during January 2017, in Israel’s hightech companies, sustaining the record level of 2016. Israel’s cyber technology companies attract investments. IntSights raised $15mn, 6 months following a round of $7.5mn. Israel’s CrediFi raised $13mn (Globes, Feb. 14). Israel’s Feedvisor raised $20mn (Globes, Feb. 1). Israel’s cyber security SentinelOne raised $70mn, led by RedPoint from the Silicon Valley (Globes, January 26), which also invested $16mn – along with Emergence Capital from the Silicon Valley – in Israel’s Chorus.ai (artificial intelligence), according to Globes, Feb. 8).

6. John Donovan, AT&T’s Exec. Vice President and Chief Strategist: In 2010, we established a research & development center in Israel, which offers a unique array of startups. Unlike other US companies, which acquire Israeli companies, we consider Israel a platform of development and expansion. AT&T’s personnel has grown 20% in 2016 (Globes, Jan. 17).

7. ”The volume of venture capital now flowing into Israel in search of automotive technology instruments is something that has not been seen here since the Internet bubble days in 2000…. There are numerous Israeli companies in the sector which were founded less than three years ago and have raised a few tens of millions of dollars to date, and now have values in the hundreds of millions of dollars…. Sweden’s Volvo and Honda – which actively explore the Israeli potential – represent a potential market of millions of vehicles annually…. Honda has already invested in Israeli auto-tech companies, such as VocalZoom…. The arrival of Hertz’ President (a fleet of 3 million vehicles), to Israel, highlights the change taking place in the auto industry balance of power…. Last week, Volkswagen and Israel’s Mobileye concluded an agreement for future commercialization of Mobileye’s mapping product….” General Motors and Daimler-Chrysler operate research & development centers in Israel (Globes, Feb. 21).

8. “Israel is a power in dental implants…. Israel’s MIS Implants Technology was sold this year, for $375mn to the Pennsylvania-based Dentsply Sirona, the world’s largest manufacturer of professional dental products and technologies….

9. China’s robotics and electronics giant, Midea, acquired control of Israel’s $170mn, Servotronix, for $56mn (Globes, Feb. 13). The Chinese government and public venture funds invested $150mn in the Israel-China BlueEconomy Fund, seeking investments in Israel’s sea-oriented technologies: wind, wave, solar, marine food, artificial islands, water purification, etc. (Globes, January 31).

10.  The NYC-based Wharton Properties’ Tel Aviv Stock Exchange 3.9% bond issue totaled $250MN (Globes, Feb. 23).