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Michael Horesh

Just how open is the Israeli economy?

If Israel is an apartheid country, it has a funny way of showing it
Intel programmer Sa'id Haruf (facing front) flanked by (left to right) Ola Zahar, head of Maantech, which promotes Arab participation in the Israeli tech industry; late former President Shimon Peres; Boaz Maoz, CEO Cisco Israel; former US President Barack Obama; Prime Minister Benjamin Netanyahu. The meeting took place in March 2013, during a visit by Obama to Israel. (Courtesy of the President's Office)
Intel programmer Sa'id Haruf (facing front) flanked by (left to right) Ola Zahar, head of Maantech, which promotes Arab participation in the Israeli tech industry; late former President Shimon Peres; Boaz Maoz, CEO Cisco Israel; former US President Barack Obama; Prime Minister Benjamin Netanyahu. The meeting took place in March 2013, during a visit by Obama to Israel. (Courtesy of the President's Office)

Israel’s economy is performing “realtively well” according to the Governor of the Bank of Israel, Mrs Karnit Flug. She noted how: “We should we remember that we’ve had a lot of experience with geopolitical shocks, and the Israeli economy has shown resilience to these shocks.” Encouraging.

Israel’s critics tend to refer to Israel as an Apartheid state. A politically-correct term, which often has more to do with crude denigration rather than fact, this position has faced three stern tests over the past few days.

Let’s start with Turkey, whose Prime Minister has been accused by a co-student of reading Mein Kampf when at school. Ankara has spent much of the past decade reinforcing Muslim values, while doing its utmost to humiliate Israel, including President Shimon Peres. And yet:

the Turkish Statistics Institute documented an expansion of the Turkey-Israel trade balance, despite the brutal anti-Israel ideology of President Recep Tayyip Erdogan. The institute reports a 56 percent export increase, to Israel, during the first five months of 2013, compared with the same period in 2012, while imports from Israel increased by 22% during the same period. The Israel-Turkey trade balance was $3.4 billion in 2008, rising to $4 billion in 2012.

The next point refers back to Israel’s success as a start-up nation. According to the British Economist Intelligence Unit, “Israel’s cluster of high-tech companies, investors and incubators is enjoying a boom which has not been witnessed since the global tech bubble burst more than a decade ago.”

And Israel’s mandarins are channeling even more resources towards the peripheral sectors. I have already reported on the emerging success of high tech in the minority communities. This week, the Israeli’ government’s Office of the Chief Scientist will sponsor a conference on behalf of hundreds of entrepreneurs and technology executives from Israel’s Arab, Bedouin and Circassian Communities. I suppose this ties in neatly with the fact that a non-Jewish participant won the country’s 2014 reality TV show of ‘Master Chef’.

Third, few outside Israel are likely to have heard of a wonderful event held recently in the holy Old City of Jerusalem. A music festival, which reached out to all four Quarters and was located around the holy sites of all the major religions, it featured 11 stations where the folk music of Jerusalem could be heard. Jews, Muslim, Armenian, Ethiopian and others played and danced in front of an equally mixed set of audiences, boosted by Israel’s growing tourist population. The shops, bazaars and eateries of the Old City lapped up the extra commerce.

A closed, apartheid economy? The evidence on the ground seems to point in the very opposite direction.

About the Author
Michael Horesh is a recognised business coach and mentor, and has helped clients collectively to create millions in added value over the past decade. He has substantial understanding of the workings of the Israeli economy and the financial situation of the Palestinians, as well as an incisive way of looking at Middle East issues.
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