Expect the Good News about Israel’s Economy to Keep Coming

Aug. 17 2018

For the first time in seven years, S&P Global—a firm known for its credit ratings—upgraded Israel’s rating to a higher-than-ever AA-. Moody’s also recently gave Israel a similarly positive upgrade. Predictably, opponents of the Netanyahu government pointed to the Israeli economy’s problems, such as inequality, the high cost of living, and so forth. Zev Chafets comments:

[The critics are] right about the extremely high cost of living, the scarcity of affordable housing, and the rate of poverty, which exceed those of most [advanced] countries. The Economist just named Tel Aviv the world’s ninth most expensive city. Currency appreciation has played a role in this. It also reflects the transformation that has made Tel Aviv an economic engine for the economy. Still, soaring housing prices . . . are a real issue for many Israelis. . . .

A credit rating is a judgment on a limited set of issues; Israel’s challenges are more complex than just the factors that impact its ability to borrow on international markets. Still, it shows that the terror problems that caused its credit rating to drop at the start of the century are no longer an overriding concern from that perspective. . . .

Israel is a world leader in everything from medical cannabis research to unmanned aircraft, from integrated circuits to water desalinization. It exports agricultural technology to poor countries, cut diamonds to the rich ones, pharmaceuticals, and, lately, entertainment to American networks. Israel has also managed to become a destination for both gay tourists and Christian pilgrims. . . .

Israel could be complacent, but it isn’t. Last week, Professor Isaac Ben-Israel unveiled a new national project. As an IDF general, he was the father of Israel’s widely admired anti-missile program. As a civilian, in 2010, he conceived and developed a cybersecurity ecosystem. Now, with government support and private investment, he intends to do the same for artificial intelligence. Ben-Israel’s plan, which has Netanyahu’s support, includes making AI and data science mandatory in high schools and universities, leveraging government investment to foster startups, cooperating with Intel and other foreign high-tech companies that already have Israeli research-and-development centers, and concentrating on areas in which Israel has a competitive advantage, including financial technology, healthcare, robotics, and the [so-called] “Internet of Things.”

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More about: Artifical Intelligence, Israel & Zionism, Israeli economy, Israeli technology

 

The Reasons for Prime Minister Netanyahu’s Staying Power

Nov. 20 2018

This week, Benjamin Netanyahu seems to have narrowly avoided the collapse of his governing coalition despite the fact that one party, Yisrael Beiteinu, withdrew and another, the Jewish Home, threatened to follow suit. Moreover, he kept the latter from defecting without conceding its leader’s demand to be appointed minister of defense. Even if the government were to collapse, resulting in early elections, Netanyahu would almost certainly win, writes Elliot Jager:

[Netanyahu’s] detractors think him Machiavellian, duplicitous, and smug—willing to do anything to stay in power. His supporters would not automatically disagree. Over 60 percent of Israelis tell pollsters that they will be voting for a party other than Likud—some supposing their favored party will join a Netanyahu-led coalition while others hoping against the odds that Likud can be ousted.

Opponents would [also] like to think the prime minister’s core voters are by definition illiberal, hawkish, and religiously inclined. However, the 30 percent of voters who plan to vote Likud reflect a broad segment of the population. . . .

Journalists who have observed Netanyahu over the years admire his fitness for office even if they disagree with his actions. A strategic thinker, Netanyahu’s scope of knowledge is both broad and deep. He is a voracious reader and a quick study. . . . Foreign leaders may not like what he says but cannot deny that he speaks with panache and authority. . . .

The prime minister or those around him are under multiple police investigations for possible fraud and moral turpitude. Under Israel’s system, the police investigate and can recommend that the attorney general issue an indictment. . . . Separately, Mrs. Netanyahu is in court for allegedly using public monies to pay for restaurant meals. . . . The veteran Jerusalem Post political reporter Gil Hoffman maintains that Israelis do not mind if Netanyahu appears a tad corrupt because they admire a politician who is nobody’s fool. Better to have a political figure who cannot be taken advantage of than one who is incorruptible but naïve.

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More about: Benjamin Netanyahu, Israel & Zionism, Israeli politics