When Israel’s controversy over judicial reform reached its peak earlier this year, there were dire predictions—some almost indistinguishable from threats—that an attempt to return to the constitutional status quo ante 1995 would send technology companies fleeing the country, and possibly tank the Israeli economy. Yet, although a judicial-reform compromise might still emerge, the country’s high-tech sector seems to be doing fine, notwithstanding some bruising from a worldwide downturn. Jonah Mandel reports:

The global economic slowdown and domestic political turmoil have not impaired the long-term prospects of Israel’s vaunted high-tech industry, officials and insiders say, despite a recent decline in hiring in the sector. Nearly 18 percent of Israel’s gross domestic product comes from the tech sector, which employs 12 percent of the workforce, generates nearly a third of its income tax, and constitutes half of exports, official figures show.

Worldwide inflation and climbing interest rates had caused a drop-off in Israeli tech jobs in 2022, with the number of hirings in the sector dipping 0.2 percent in the first quarter of 2023—its first fall since 2008, said a newly issued report. The “stagnation” in tech hiring, however, had yet to have a negative impact on Israel’s GDP or exports, said Dror Bin, director of the Israel Innovation Authority (IIA) which compiled the report together with the Start-Up Nation Policy Institute (SNPI).

IIA’s Bin noted the data indicated no immediate effect of the legal crisis on Israel’s economy. “I don’t see companies taking the operations outside of Israel,” he said. “We do see a trend of more entrepreneurs deciding to establish their legal entity outside of Israel, but the operation remains in Israel.”

On Wednesday, Elliott Abrams testified before Congress about the Taylor Force Act, passed in 2018 to withhold U.S. funds from the Palestinian Authority (PA) so long as it continues to reward terrorists and their families with cash. Abrams cites several factors explaining the sharp increase in Palestinian terrorism this year, among them Iran’s attempt to wage proxy war on Israel; another is the “Palestinian Authority’s continuing refusal to fight terrorism.” (Video is available at the link below.)

As long as the “pay for slay” system continues, the message to Palestinians is that terrorists should be honored and rewarded. And indeed year after year, the PA honors individuals who have committed acts of terror by naming plazas or schools after them or announcing what heroes they are or were.

There are clear alternatives to “pay to slay.” It would be reasonable for the PA to say that, whatever the crime committed, the criminal’s family and children should not suffer for it. The PA could have implemented a welfare-based system, a system of family allowances based on the number of children—as one example. It has steadfastly refused to do so, precisely because such a system would no longer honor and reward terrorists based on the seriousness of their crimes.

These efforts, like the act itself, are not at all meant to diminish assistance to the Palestinian people. Rather, they are efforts to direct aid to the Palestinian people rather than to convicted terrorists. . . . [T]he Taylor Force Act does not stop U.S. assistance to Palestinians, but keeps it out of hands in the PA that are channels for paying rewards for terror.

[S]hould the United States continue to aid the Palestinian security forces? My answer is yes, and I note that it is also the answer of Israel and Jordan. As I’ve noted, PA efforts against Hamas or other groups may be self-interested—fights among rivals, not principled fights against terrorism. Yet they can have the same effect of lessening the Iranian-backed terrorism committed by Palestinian groups that Iran supports.