Checking in on the Israeli Economy

The need to keep large numbers of IDF reservists on active duty—and thus out of the workforce—and the evacuation of tens of thousands of citizens from the northern and southwestern parts of the country have taken an economic toll on Israel. So too has a decline in foreign investment. Ezra Gardner examines the latest figures:

Even as growth equity begins to recover globally, Israeli venture-capital investments peaked at $29 billion in 2021 but then dropped significantly to $17 billion in 2022 and to $7.3 billion in 2023, and are currently (in 2024) on a $5 billion run. . . . . Israel reported zero initial public offerings in 2024, a decline of 100 percent, indicating that while other regions are recovering, Israel is not.

Beneath the surface, troubling trends from the largest foreign investors tell an even more alarming tale. In 2021, Japanese investment in the Israeli tech sector surged to roughly $3 billion. SoftBank Group Corp., a Japanese multinational holding company headquartered in Tokyo, Japan, engaged in a significant number of deals in Israel, with twelve in 2021, four in 2022, and three in 2023. Since October 7, SoftBank has suspended deals in Israel but has closed nine deals in the U.S., Europe, and Canada. Similarly, Koch Investments, based in Wichita, Kansas, has refrained entirely from engaging in deals within Israel since October 7, mirroring the Japanese trend.

Gardner warns of an “impending crash,” but believes it is not inevitable:

Addressing this issue requires concerted efforts from policymakers, investors, and the tech ecosystem to reinvigorate the nation’s investment appeal. Without swift and strategic action, Israel risks falling further behind in the competitive global market, jeopardizing its position as a leading innovation hub.

Read more at Ynet

More about: Gaza War 2023, Israeli economy, Israeli technology

While Israel Is Distracted on Two Fronts, Iran Is on the Verge of Building Nuclear Weapons

Iran recently announced its plans to install over 1,000 new advanced centrifuges at its Fordow nuclear facility. Once they are up and running, the Institute for Science and International Security assesses, Fordow will be able to produce enough highly enriched uranium for three nuclear bombs in a mere ten days. The U.S. has remained indifferent. Jacob Nagel writes:

For more than two decades, Iran has continued its efforts to enhance its nuclear-weapons capability—mainly by enriching uranium—causing Israel and the world to concentrate on the fissile material. The International Atomic Energy Agency recently confirmed that Iran has a huge stockpile of uranium enriched to 60 percent, as well as more enriched to 20 percent, and the IAEA board of governors adopted the E3 (France, Germany, UK) proposed resolution to censure Iran for the violations and lack of cooperation with the agency. The Biden administration tried to block it, but joined the resolution when it understood its efforts to block it had failed.

To clarify, enrichment of uranium above 20 percent is unnecessary for most civilian purposes, and transforming 20-percent-enriched uranium to the 90-percent-enriched product necessary for producing weapons is a relatively small step. Washington’s reluctance even to express concern about this development appears to stem from an unwillingness to acknowledge the failures of President Obama’s nuclear policy. Worse, writes Nagel, it is turning a blind eye to efforts at weaponization. But Israel has no such luxury:

Israel must adopt a totally new approach, concentrating mainly on two main efforts: [halting] Iran’s weaponization actions and weakening the regime hoping it will lead to its replacement. Israel should continue the fight against Iran’s enrichment facilities (especially against the new deep underground facility being built near Natanz) and uranium stockpiles, but it should not be the only goal, and for sure not the priority.

The biggest danger threatening Israel’s existence remains the nuclear program. It would be better to confront this threat with Washington, but Israel also must be fully prepared to do it alone.

Read more at Ynet

More about: Iran nuclear program, Israeli Security, Joseph Biden, U.S. Foreign policy