Aviv Keren

How the judicial reform guarantees Israel’s economic instability

It is no surprise that wealthy investors and larger corporations, such as venture capitalists, are not as enthusiastic as Netanyahu and his friends, about the plan to reform the judicial branch of the state of Israel.

While Finance Minister Smotrich believes that the current economic turmoil and the Tel Aviv stock exchange’s red arrows to be the cause of the “violent and anarchical protesters”, he should understand that large corporations do not care about the protests, as much as they do about Israel remaining a democratic country in the Middle East. It should not be downplayed that Minister Smotrich was arrested in 2005 while in possession of 700 litres of gasoline, on suspicion of participating in an attempt to blow up the Ayalon Highway near Tel Aviv, because he did. This is the exact same person, as it was a mere two decades ago. Corporations only looks for profits, that means that they seek safe investments, not risky ones. If Israel’s Finance Ministry one day decides, that “only Jewish persons are allowed to be hired from now on”, or that “corporations must adhere to the Jewish Torah”, it would definitely be a great cause of concern for these companies. Once a Minister is allowed to go through with his non-yet fulfilled wants and dreams that he has been carrying with him since he planned his last terror attack, it will not be as amusing for the CEOs of Alphabet (Google) or Intel.

This is the main reason, a strong judicial branch is of utmost importance for venture capitalists, hi-tech companies, pension funds, or other investment groups dealing in real estate and more. Investors should always be assured that what they, or the investment companies that they directly put their trust in, will earn them a reward. If a fanatic and religious country, such as Israel could become in a couple of months, makes its own decisions without any ethical, social, or economical oversight, these investments become riskier.

Each large company decides its own risk for investments in each country, with hundreds of legal and financial professionals that they have at their disposal, they do not need a 20-minute conversation with a Prime Minister that has already lied to their faces, after promising credit rating companies, such as Moody’s, that his government will only go through with the judicial reform if there is broad agreement with the opposition. A promise that has not only gone unfulfilled, but has been simply brushed aside.

Economic risks in investments then leads to a drop in investments into the Israeli economy, with domestic companies and start-ups currently seeing a drop of around 60% in investments from abroad, compared to the same period last year, when the judicial reform was not on the table.

If Israel of the future would still be interested and enthusiastic in remaining The United States’ “51st star on the flag”, as Mr. Ben Gvir stated, then it would be in the citizens’ interest for the current government to halt the judicial reform.

About the Author
Aviv was born in Ramat Gan and has lived in Europe for the past 10 years. He is still very much attached to Israel, speaking Hebrew at home, and interacting with Israeli friends and the Jewish community in his area.
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