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Ambassador (ret.) Yoram Ettinger, “Second Thoughts: a US-Israel Initiative”
August 1, 2023  

According to a July 17, 2023 Bloomberg report, a leading global investment bank, the NYC-based Jefferies Financial Group, Inc., “expects further growth in Israel’s tech sector despite political unrest over government plans to overhaul the judiciary….

“While there are considerable uncertainties, we anticipate Israel’s tech ecosystem growth and maturation will only accelerate, creating a dominant and necessary opportunity for investors…. The report expressed confidence that Israel’s tech industry will remain globally attractive….

“The volume and density of innovation has made Israel a mandatory destination for all leading investors and will likely create a disproportionate number of category-defining winners across sectors in the many years to come….”

Irrespective of the political turmoil associated with the judiciary controversy, the latest data indicates persistent growth of Israel’s high-tech sector, in particular, and Israel’s economy, in general.

According to Israel’s Central Bureau of Statistics, as presented on July 27, 2023 by a senior Israeli economist, Shlomo Maoz:

*Notwithstanding the dramatic decline in foreign investment in Israel’s high-tech sector, Israel’s high-tech export increased by 6.9% during the first 5 months of 2023, while domestic consumption of Israel’s high-tech products and services decreased by 0.2% during the same period.

*The recent depreciation of the New Israeli Shekel (compared with the US dollar) has benefitted Israel’s exports.

*Industrial production of the high-tech sector expanded during the first five months of 2023 by 5.6% more than the first five months of 2022, as reflected by the 3% growth in the number of high-tech workers during the first five month of 2023, and the 3.6% rise in the number of working hours during the first five months of 2023.  

*Israel’s defense export has surged due to the impact of the Russia-Ukraine war upon the demand for advanced Israeli military systems; the substantial increase of Germany’s defense budget, and Sweden’s and Finland’s decision to join NATO. In addition, there is the rising Chinese threat to India and the Pacific Ocean countries; and the sustained regional and global threat of Sunni (e.g., Moslem Brotherhood) and Shiite Islamic terrorism (Iran’s Ayatollahs).

*Israel is expected to double its natural gas production to 40 billion cubic meters during the next few years, in response to the growing demand  by Europe for alternative sources of natural gas, as it seeks to reduce reliance on Russian energy.  As a result, there has been growing interest by international energy companies to invest in Israel’s gas exploration. For example, Chevron Corp. and Israel’s NewMed Energy and Ratio Energies – the partners in the Israeli offshore gas project, Leviathan – are investing $568mn to build a 3rd pipeline.  

*Unemployment has declined to 3.5% (3% among women). In fact, a shortage of manpower is reported by hundreds of contractors and subcontractors, especially in export and defense-driven companies.

*Israel’s GDP grew by 3.2% during the first quarter of 2023, compared to 3.1% during the previous quarter, while industrial investment grew by 16.2% following a 4.8% decline during the last quarter of 2022.

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The state of Israel’s high-tech


Challenged by a unique environment – top heavy on terrorism and war, but low on natural resources and rainfall – Israel has bolstered its do-or-die state of mind, with defiance of odds, risk-taking, frontier, pioneering, optimism, patriotism, can-do and out-of-the-box mentality. This has yielded a robust flow of game-changing commercial, defense and dual-use technologies.

These game-changing technologies include the world’s smallest (0.99mm) pill-size video medical camera, MobilEye AI car safety, Waze navigation, the Pressure Bandage, the “Arrow”, “Iron Dome” and “David Sling” missile defense systems, land-sea-air UAVs and mini, small and mid-size space vehicles. Also, the cherry tomato, drip irrigation system, SupPlant autonomous irrigation system, solar water heaters, Intel’s microprocessors, Microsoft’s anti-virus and Windows XP and NT, the USB flash drive Disk-on-Key, Firewall against malware and the ICQ instant messenger. In addition, there are the Israeli developed Watergen water from thin air, GrainPro Cocoons for African grain farmers, biological pest control, Laser keyboard, Voice-over Internet protocol, Face ID, Babylon computer translation, WeCU airport security, Rewalk for paraplegics, OrCam for the visually-impaired, etc.  

These Israeli developed technologies have been shared with the US, in particular, and the world, in general, enhancing global standard of living, communications, medicine, health, agriculture, irrigation, software technologies, cyber security, national security and homeland security.

Israel is one of the leading global high-tech hubs along with the Silicon Valley, San Francisco, Boston, Austin, Raleigh, Durham, Bangalore, Stockholm, Helsinki and London.


Some 400 foreign corporations – mostly from the US – have established research and development centers in Israel, leveraging its brain power and challenging experiences.  For example, John Deere and Monsanto agricultural tech; General Electric, Johnson & Johnson and Philips medical tech; Pfizer, Bayer and Merck pharmaceuticals; Texas Instruments, Intel, Applied materials, AMD, Marvell, Nvidia and Qualcomm semiconductors; General Motors, Ford Motor, Honda, Mercedes Benz and Skoda automotive; Microsoft, Oracle, McAfee, Autodesk and PTC software; Sony, Siemens, Samsung and LG electronics; AT&T telecommunications, Vonage and Fujitsu communications; IBM, HP and Dell computer tech; eBay, Google, Facebook, Yahoo and PayPal internet; Intuit, Citigroup, Mastercard, Visa and Barclays financial services; Motorola and Nokia telecom; Xerox and Hewlett Packard information tech;, PepsiCo food processing, Mitsubishi international trade, CA Technologies business-to-business, Sears retail, ASML photolithography, etc.  

According to PitchBook Financial Data, In 2022, Israel ($506 per capita) was second to Singapore ($695) in attracting venture capital investment per capita (including Warren Buffett’s Berkshire-Hathaway), compared to the US ($357), Switzerland ($273), Finland ($232), the UK ($190), the UAE ($168), Sweden ($157), Canada ($117) and France ($104).

And, according to Deloitte, “Israel is the world leader for the number of start-ups per capita.”

Israel leads the world in its research and development manpower per capita: 140 Israelis (per 10,000) and 85 Americans (per 10,000) are ahead of the rest of the world. 

Israel is second to the US in terms of scientific publications per capita.

Israel’s high-tech sector has played a key role in the transformation of Israel into a unique force and dollar-multiplier for the US. It has provided to the US game-changing commercial and defense technologies, which have enhanced the US economy and defense, bolstering its global technological edge.

Israel’s high-tech competitive edge

Israel’s high-tech workforce benefits from an annual flow of Jewish immigrants (Aliyah), who are trained in Israel, the US, Russia, Europe, Latin America and Australia, who join the Israeli graduates from institutions of higher learning.

Israel’s high-tech workforce absorbs veterans of the elite high-tech units of the Israel Defense Force, many of them scouted by the military among 10th and 11th graders, who are at the top of their class.

Israel’s military service trains high school graduates to make life and death decisions, be quick on their feet, innovate and improvise.

Israel’s commercial and military high-tech benefits from the intense, speedy and informal interaction and integrated synergy among the research, academic, military, commercial and defense sectors.

Israel’s robust demography – which leads the Free World with three births per Jewish woman and an unprecedented momentum of secular fertility – provides a tailwind for Israel’s economy.

According to the World Bank, 5.4% of Israel’s GDP is dedicated to research and development, the highest in the world, ahead of South Korea (4.81%), Sweden (3.53%), Belgium (3.48%), the US (3.45%), Japan (3.26%), Austria (3.20%), Switzerland (3.15%), Germany (3.14%), Denmark (2.96%), the OECD (2.96%), Finland (2.94%), Iceland (2.47%), France (2.35%), the Netherlands (2.9%), Norway (2.28%), Slovenia (2.15%), the Czeck Republic (1.9%), Singapore 1.89%), Australia (1.83%), the UK (1.71%) and Canada (1.7%).


Israel’s economy has surged dramatically in 1988-2022:

<From 4.4 million to 9.5 million people;
<From life expectancy of 75 to 82;
<From $37 billion to $490 billion GDP;
<From $8,000 to $52,000 GDP per capita;
<From $6 billion to $200 billion foreign exchange reserves;
<From 155% to 61% government debt to GDP ratio;
<From $10 billion to $160 billion exports;
<From 70,000 to 350,000 students in Israel’s colleges and universities.


Against the backdrop of the aforementioned information, Israel constitutes a unique case, which benefits from the law of increasing returns.  Israel’s ongoing wars against terrorism and conventional military forces have been bumps on the road to unprecedented growth.

According to George Gilderthe author of The Israel Test and a high-tech guru: “Israel is the global master of microchip design, network algorithms and medical instruments…water recycling and desalinization…missile defense, robotic warfare, and UAVs…. US defense and prosperity increasingly depend on the ever-growing economic and technological power of Israel. If we stand together, we can deter or defeat any foe…. We need Israel as much as it needs us.

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Ambassador (ret.) Yoram Ettinger, “Second Thought: a US-Israel Initiative”
January 16, 2024

*Irrespective of Israel’s wars against Hamas and Hezbollah, Intel, the semiconductor giant, confirmed a $25 billion investment in Israel, leveraging Israel’s brain power, which has enhanced Intel’s competitiveness in the global market.  Over the last 50 years, Intel has invested over $50 billion in Israel, establishing 4 research and development centers, despite the potential for wars and actual wars and terrorism. Intel will expand its Israeli chip factory, in order to diversify its manufacturing potential amid a chip arms race (New York Times, December 27, 2023).

*Challenged by a unique environment – top heavy on terrorism and war, but low on natural resources and rainfall – Israel has bolstered its do-or-die state of mind, with defiance of odds, risk-taking, frontier, pioneering, optimism, patriotism, can-do and out-of-the-box mentality. This has yielded a robust flow of game-changing commercial, defense and dual-use technologies.

*Israel entered the current wars with positive economic indicators, such as debt-to-GDP ratio in the low ‘60% (compared with 123% in the US) and an all-time high foreign exchange reserves of $200 billion.

*Intel’s $25 billion investment in Israel is driven by the Israel’s unique competitive edge, as detailed in the following October 23, 2023 report by the St. Louis-based Stifel Investment Bank ($390BN asset management):

“We believe that there are several key factors supporting the resilience of the Israeli market in the face of conflict, and the confidence of large multinational companies making large acquisitions in Israel, including during wars.

“Some of those key factors include:

<The strongest military in the region….
<Key strategic assets in Israel held by leading U.S. and other global ‘Blue Chip’ corporates with billions of dollars of investment respectively…
<A source of key cutting-edge technologies for US and global high-tech giants [e.g., Intel, HP, IBM, Google, Cisco, Microsoft, Apple] ….
<Chevron with billions of dollars in Israeli offshore gas interests, is a strategic alternative source of gas to the European Union particularly considering issues with Russia] ….
<A 75-year-old partnership with the US, built on mutual interests and shared values….
<Military cooperation [with the US], joint development of military technology [and battle tactics], and regular joint military exercises involving the U.S. military….
<A manufacturer of key military equipment for the U.S. military….
<Israel has a history of numerous brilliant military victories throughout its history, when it had a far weaker military and far worse odds….
<Israeli companies, management teams and people have demonstrated strong operational flexibility, adaptation, and resilience in times of conflict, and experience in dealing with reserve duty absenteeism and remote working….  

*”We [Stifel Investment Bank] have analyzed the impact of 4 previous Israeli conflicts with a range of both duration and gravity including the 2014 Gaza War – Operation Protective Edge, the 2008 Gaza War – Operation Cast Lead, the 2006 Lebanon War, and the 2nd Intifada (2000).  

“Our analysis examines the impact on the Tel Aviv Stock Exchange (TASE) as well as strategic transactional activity during and following the respective conflicts.

*“The analysis reveals very strong resilience in the face of such Israeli market shocks, and with the exception of the 2nd Intifada (2000) – which was highly correlated to the dot-com bubble – the impact of historical conflicts on TASE have been minimal with the TASE experiencing single digit or negligible conflict related impacts, and an almost immediate rebound and strong short and long term performance post conflict….

*”It is also noteworthy that throughout historical periods of conflict, there continued to be strategic M&A [Merger and Acquisition] activity with multinational strategic companies making material acquisitions in Israel during and immediately post conflict….”

*According to Intel’s CEO, Patrick Gelsinger: “The Israeli people are the most resilient people on earth” (FOX Business, December 13, 2023).
Support Appreciated

Ambassador (ret.) Yoram Ettinger, “Second Thoughts: a US-Israel Initiative”
August 1, 2023  

According to a July 17, 2023 Bloomberg report, a leading global investment bank, the NYC-based Jefferies Financial Group, Inc., “expects further growth in Israel’s tech sector despite political unrest over government plans to overhaul the judiciary….

“While there are considerable uncertainties, we anticipate Israel’s tech ecosystem growth and maturation will only accelerate, creating a dominant and necessary opportunity for investors…. The report expressed confidence that Israel’s tech industry will remain globally attractive….

“The volume and density of innovation has made Israel a mandatory destination for all leading investors and will likely create a disproportionate number of category-defining winners across sectors in the many years to come….”

Irrespective of the political turmoil associated with the judiciary controversy, the latest data indicates persistent growth of Israel’s high-tech sector, in particular, and Israel’s economy, in general.

According to Israel’s Central Bureau of Statistics, as presented on July 27, 2023 by a senior Israeli economist, Shlomo Maoz:

*Notwithstanding the dramatic decline in foreign investment in Israel’s high-tech sector, Israel’s high-tech export increased by 6.9% during the first 5 months of 2023, while domestic consumption of Israel’s high-tech products and services decreased by 0.2% during the same period.

*The recent depreciation of the New Israeli Shekel (compared with the US dollar) has benefitted Israel’s exports.

*Industrial production of the high-tech sector expanded during the first five months of 2023 by 5.6% more than the first five months of 2022, as reflected by the 3% growth in the number of high-tech workers during the first five month of 2023, and the 3.6% rise in the number of working hours during the first five months of 2023.  

*Israel’s defense export has surged due to the impact of the Russia-Ukraine war upon the demand for advanced Israeli military systems; the substantial increase of Germany’s defense budget, and Sweden’s and Finland’s decision to join NATO. In addition, there is the rising Chinese threat to India and the Pacific Ocean countries; and the sustained regional and global threat of Sunni (e.g., Moslem Brotherhood) and Shiite Islamic terrorism (Iran’s Ayatollahs).

*Israel is expected to double its natural gas production to 40 billion cubic meters during the next few years, in response to the growing demand  by Europe for alternative sources of natural gas, as it seeks to reduce reliance on Russian energy.  As a result, there has been growing interest by international energy companies to invest in Israel’s gas exploration. For example, Chevron Corp. and Israel’s NewMed Energy and Ratio Energies – the partners in the Israeli offshore gas project, Leviathan – are investing $568mn to build a 3rd pipeline.  

*Unemployment has declined to 3.5% (3% among women). In fact, a shortage of manpower is reported by hundreds of contractors and subcontractors, especially in export and defense-driven companies.

*Israel’s GDP grew by 3.2% during the first quarter of 2023, compared to 3.1% during the previous quarter, while industrial investment grew by 16.2% following a 4.8% decline during the last quarter of 2022.

Support Appreciated

The state of Israel’s high-tech


Challenged by a unique environment – top heavy on terrorism and war, but low on natural resources and rainfall – Israel has bolstered its do-or-die state of mind, with defiance of odds, risk-taking, frontier, pioneering, optimism, patriotism, can-do and out-of-the-box mentality. This has yielded a robust flow of game-changing commercial, defense and dual-use technologies.

These game-changing technologies include the world’s smallest (0.99mm) pill-size video medical camera, MobilEye AI car safety, Waze navigation, the Pressure Bandage, the “Arrow”, “Iron Dome” and “David Sling” missile defense systems, land-sea-air UAVs and mini, small and mid-size space vehicles. Also, the cherry tomato, drip irrigation system, SupPlant autonomous irrigation system, solar water heaters, Intel’s microprocessors, Microsoft’s anti-virus and Windows XP and NT, the USB flash drive Disk-on-Key, Firewall against malware and the ICQ instant messenger. In addition, there are the Israeli developed Watergen water from thin air, GrainPro Cocoons for African grain farmers, biological pest control, Laser keyboard, Voice-over Internet protocol, Face ID, Babylon computer translation, WeCU airport security, Rewalk for paraplegics, OrCam for the visually-impaired, etc.  

These Israeli developed technologies have been shared with the US, in particular, and the world, in general, enhancing global standard of living, communications, medicine, health, agriculture, irrigation, software technologies, cyber security, national security and homeland security.

Israel is one of the leading global high-tech hubs along with the Silicon Valley, San Francisco, Boston, Austin, Raleigh, Durham, Bangalore, Stockholm, Helsinki and London.


Some 400 foreign corporations – mostly from the US – have established research and development centers in Israel, leveraging its brain power and challenging experiences.  For example, John Deere and Monsanto agricultural tech; General Electric, Johnson & Johnson and Philips medical tech; Pfizer, Bayer and Merck pharmaceuticals; Texas Instruments, Intel, Applied materials, AMD, Marvell, Nvidia and Qualcomm semiconductors; General Motors, Ford Motor, Honda, Mercedes Benz and Skoda automotive; Microsoft, Oracle, McAfee, Autodesk and PTC software; Sony, Siemens, Samsung and LG electronics; AT&T telecommunications, Vonage and Fujitsu communications; IBM, HP and Dell computer tech; eBay, Google, Facebook, Yahoo and PayPal internet; Intuit, Citigroup, Mastercard, Visa and Barclays financial services; Motorola and Nokia telecom; Xerox and Hewlett Packard information tech;, PepsiCo food processing, Mitsubishi international trade, CA Technologies business-to-business, Sears retail, ASML photolithography, etc.  

According to PitchBook Financial Data, In 2022, Israel ($506 per capita) was second to Singapore ($695) in attracting venture capital investment per capita (including Warren Buffett’s Berkshire-Hathaway), compared to the US ($357), Switzerland ($273), Finland ($232), the UK ($190), the UAE ($168), Sweden ($157), Canada ($117) and France ($104).

And, according to Deloitte, “Israel is the world leader for the number of start-ups per capita.”

Israel leads the world in its research and development manpower per capita: 140 Israelis (per 10,000) and 85 Americans (per 10,000) are ahead of the rest of the world. 

Israel is second to the US in terms of scientific publications per capita.

Israel’s high-tech sector has played a key role in the transformation of Israel into a unique force and dollar-multiplier for the US. It has provided to the US game-changing commercial and defense technologies, which have enhanced the US economy and defense, bolstering its global technological edge.

Israel’s high-tech competitive edge

Israel’s high-tech workforce benefits from an annual flow of Jewish immigrants (Aliyah), who are trained in Israel, the US, Russia, Europe, Latin America and Australia, who join the Israeli graduates from institutions of higher learning.

Israel’s high-tech workforce absorbs veterans of the elite high-tech units of the Israel Defense Force, many of them scouted by the military among 10th and 11th graders, who are at the top of their class.

Israel’s military service trains high school graduates to make life and death decisions, be quick on their feet, innovate and improvise.

Israel’s commercial and military high-tech benefits from the intense, speedy and informal interaction and integrated synergy among the research, academic, military, commercial and defense sectors.

Israel’s robust demography – which leads the Free World with three births per Jewish woman and an unprecedented momentum of secular fertility – provides a tailwind for Israel’s economy.

According to the World Bank, 5.4% of Israel’s GDP is dedicated to research and development, the highest in the world, ahead of South Korea (4.81%), Sweden (3.53%), Belgium (3.48%), the US (3.45%), Japan (3.26%), Austria (3.20%), Switzerland (3.15%), Germany (3.14%), Denmark (2.96%), the OECD (2.96%), Finland (2.94%), Iceland (2.47%), France (2.35%), the Netherlands (2.9%), Norway (2.28%), Slovenia (2.15%), the Czeck Republic (1.9%), Singapore 1.89%), Australia (1.83%), the UK (1.71%) and Canada (1.7%).


Israel’s economy has surged dramatically in 1988-2022:

<From 4.4 million to 9.5 million people;
<From life expectancy of 75 to 82;
<From $37 billion to $490 billion GDP;
<From $8,000 to $52,000 GDP per capita;
<From $6 billion to $200 billion foreign exchange reserves;
<From 155% to 61% government debt to GDP ratio;
<From $10 billion to $160 billion exports;
<From 70,000 to 350,000 students in Israel’s colleges and universities.


Against the backdrop of the aforementioned information, Israel constitutes a unique case, which benefits from the law of increasing returns.  Israel’s ongoing wars against terrorism and conventional military forces have been bumps on the road to unprecedented growth.

According to George Gilderthe author of The Israel Test and a high-tech guru: “Israel is the global master of microchip design, network algorithms and medical instruments…water recycling and desalinization…missile defense, robotic warfare, and UAVs…. US defense and prosperity increasingly depend on the ever-growing economic and technological power of Israel. If we stand together, we can deter or defeat any foe…. We need Israel as much as it needs us.

Straight from the Jerusalem Boardroom #248
https://bit.ly/3u29k9g

Foreign investment in Israel’s high-tech companies surged to new heights in the 1st quarter of 2021 – $5.7bn in 172 deals – which is up 89% over the impressive 4th quarter of 2020 and double the volume of the 1st quarter of 2020.

2020 was the first year of surpassing $10bn in capital raised by the Israeli high-tech sector from investors in the US, Asia and Europe, who trust the maturity of Israel’s brain power. Investments in Israeli companies more than tripled in six years, reflecting the effective response by Israeli startups to the technological, medical, pharmaceutical, educational, social and digital challenges posed by Covid-19.

Israel’s economic performance in defiance of Covid-19 is presented by Dr. Adam Reuter, the Chairman and Founder of “Financial Immunities,” Israel’s largest financial-risk management firm, and the co-author of Israel – Island of Success:

  1. Israel has led the globe in the rapid administration of Covid-19 vaccinations due to effective negotiations with Pfizer and an efficient, country-wide medical infrastructure.
  2. Israel is the second lowest among OECD countries in the number of Covid-19 deaths per number of Covid-19 cases: 0.7% compared to the 2.3% OECD average. Israel features a young population (median age of 30 compared to the OECD’s 42) and an effective country-wide medical infrastructure, including top level HMOs and hospitals.
  3. Israel is ranked 12th from the bottom among the 37 OECD countries in the number of deaths per million inhabitants: 645 compared to 1,145 OECD average.
  4. The International Monetary Fund’s 2025 GDP growth forecast for OECD countries: Israel – 4%, OECD average – 2.2%, US – 1.8%, Australia – 2.5%, Ireland – 2.6%, France and Canada – 1.7%, the UK – 1.6%, Germany – 1.2%, etc.
  5. Israel’s 2020 GDP was reduced by 2.5%, compared to the OECD average reduction of 4.1%, South Korea – 1%, Norway – 0.8%, Australia – 2.6%, US – 3.5%, Japan – 4.8%, Germany – 5%, France – 8%, the UK – 10% reduction, etc. GDP growth was recorded in New Zealand – 2.4% and Ireland – 3.5%.
  6. In 2020, Israel was ranked 20th among the 37 members of the OECD in terms of GDP per capita, featuring $43,000 (GDP – $408bn), ahead of Japan, Italy and Spain, and very close behind the UK ($44,000) and France ($45,000).
  7. Israel’s debt-to-GDP ratio increased from 60% in 2019 to 72% in 2020, compared to the OECD’s average increase from 66% to 82%. The 2020’s debt-to-GDP ratio was 266% in Japan, Italy – 161%, the US – 131%, Germany – 73%, etc.
  8. Israel’s foreign exchange reserves-to-GDP ratio of 41% (3rd among the OECD countries) attests to its financial stability, and Israel’s capability to raise foreign credit promptly in a cost-effective manner. Israel’s foreign exchange reserves in March 2021 – $186bn.
  9. During the past decade, Standard and Poor (S&P) accorded Israel a positive credit rating trend, unlike the negative trend for the G-7 countries. In 2020, notwithstanding Covid-19, Israel’s credit rating (S&P) remained at AA.
  10. Some 380 global high-tech giants operate in Israel, including Microsoft, Amazon, IBM, Intel, Cisco, Apple, Verizon, Applied Materials, Dell, HP, Kodak, Oracle, Philips, SAP, Medtronics, GM, eBay, GE, etc. Israel leads the world in the ratio of research and development investment to GDP: 4.9%. 85% of this investment comes from the business sector.

 

Straight from the Jerusalem Boardroom #247

According to Dr. Adam Reuter, the Chairman and Founder of “Financial Immunities,” Israel’s largest financial-risk management firm, and the co-author of Israel – Island of Success:

  1. A direct correlation exists between the level of Nasdaq, on the one hand, and the strength of Israel’s Shekel, on the other hand. The higher the level of Nasdaq, the more US funds are available for investment in Israel’s hightech sector. Israel has become a unique source of innovative research and development – as well as an engine of export enhancement – for major US hightech companies.
  2. Israel’s export is expected to approach an all-time high of $132BN in 2020 – while import has declined substantially – due to the surge of the hightech sector. 10% of Israel’s working manpower is directly employed by the hightech sector (double the level employed in other OECD countries) with a substantial number of people, who are indirectly involved in hightech.
  3. Direct foreign investment in Israel in 2020 is 20% higher than 2019 – approaching $25BN, of which $9.5BN-$10BN are hightech investment (20% higher than 2019). Since 2000, US businesses and individuals have invested over $100BN in Israel’s hightech sector.
  4. Israel’s foreign exchange reserves as a percentage of GDP is 3rd among OECD countries. Israel’s total foreign exchange reserves are at an all-time high at $170BN, of which $17BN was acquired in 2020. Notwithstanding the unprecedented dollar acquisition by Bank of Israel – but due to the unprecedented level of foreign investment – Israel’s Shekel is gaining strength: 3.81 per US Dollar on March 17, 2020 and 3.23 on December 22, 2020.
  5. Israel’s national debt-to-GDP ratio was 60%, before the arrival of COVID 19, compared to 109% for the USA. In December 2020, it is 76%, compared to 131% for the USA.
  6. Israel’s public savings in 2020 has increased by 1.4% compared to 2019.
  7. The IMF’s outlook report for 2025: Israel – 4% GDP growth ($500BN annual GDP), Turkey, Columbia, Latvia and Estonia – 3%, Ireland and Australia – 2.5%, OECD average – 2.1%, Sweden – 2%, USA – 1.75%, France – 1.7%, Canada – 1.7%, Switzerland – 1.3%, Germany – 1.2%.
  8. Standard & Poor’s (S&P) international rating agency reaffirmed Israel’s credit rating of a stable AA-, despite the impact of COVID 19, the growing budget deficit and domestic political instability, but due to Israel’s thriving hightech industries, strong external accounts, the deep pool of domestic savings, the effects of the recent peace accords and the expansion of natural gas investment and export (e.g., Chevron’s acquisition of Nobel Energy’s offshore assets in the Eastern Mediterranean, which has geopolitical and economic implications).

Fitch and Moody’s international rating companies sustained their stable A+ and stable A1 credit ratings for Israel, respectively.

  1. Israel’s peace treaties with the United Arab Emirates and Bahrain are expected to add 0.25% ($1BN) to Israel’s GDP through agricultural and hightech export, hightech investment, oil import and mutual tourism.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight from the Jerusalem Boardroom #245

  1. 2000 to 2019:

*Population – from 6.2 million to 9.1 million (47% growth);
*Gross Domestic Product (GDP) – from $132BN to $404BN (206% growth);
*GDP per capita – from $21,000 to $44,000 (110% growth);
*Export – from $47BN to $117BN (149% growth);
*Women in the workforce – from 48% to 60% (25% growth);
*University/college students – from 70,000 to 316,000 (351% growth);
*Incoming tourists – from 2.31 million to 4.87 million (108% growth);
*Water desalination – from 2% to 26% (1,300% growth);
*Foreign exchange reserves – from $24BN to $119BN (396% growth);
*Government debt per GDP – from 77% to 58.5% (24.7% reduction);
*US “aid” per GDP – from 2.3% to 1% (57% reduction);
*Defense budget per GDP – from 9% to 5% (44% reduction);
*Tax burden – from 43% to 32% (26% reduction);
*Number of vehicles per 1,000 people – from 277 to 396 (43% growth);
*Emigrants per 100,000 people – from 340 to 160 (51% reduction).

Source: Dr. Adam Reuter, the Chairman and Founder of “Financial Immunities,” Israel’s largest financial-risk management firm, and the co-author of Israel – Island of Success.

  1. In 2010-2019, Israel’s hightech sector raised $39.1BN, mostly from foreign investors. In 2019, Israel’s technology sector raised $8.3BN, 30% over 2018, and compared to $2.1BN in 2010. In 2019, Artificial Intelligence firms raised $3.7BN (Globes Business Daily, January 9, 2020).
  2. In 2019, the Tel Aviv Stock Exchange featured more than 55% rate of return in the hightech sector, 70% in real estate and almost 30% in banking. In 2019, the total of hightech exits reached $10BN – twice as in 2018 – with a 30% rise in the number of transactions. The hightech sector rose 63% in 2019, twice as high as NASDAQ, and 200% since mid-2011.

The sustained growth of the hightech sector, during the recent 25 years, has been a byproduct of the unique interaction among Israel’s educational, (defense and commercial) industrial, military and academic/research infrastructures, bolstered by Israel’s brain-power and government assistance (Globes, January 20).

  1. Insight Partners, the NY-based venture capital fund, acquired Israel’s Armis (cyber and IoT – interrelated computing devices) for $1.1BN. In October 2019, Insight set, in Israel, its first overseas office. Since 1995, Insight invested $700MN in Israeli hightech companies.
  2. Koch Industries’ KDT Medical Investments increased its holding in Israel’s Insightec (medical equipment) by $100MN, in addition to a previous investment of $150MN (Globes January 7).

Previous issues of the Jerusalem Boardroom: https://bit.ly/2RAykCG

Straight from the Jerusalem Boardroom #244 
Prior issues of the Boardroom: https://bit.ly/2EV9Td2

  1. According to PriceWaterouseCoopers, the 2019 volume of Israeli hightech exits (companies that were sold or held stock exchange offerings), totaled $9.9BN, compared to $4.9BN in 2018, $7.4BN in 2017, $14.9 in 2014, $7.6BN in 2016 and $1.2BN in 2010. If 10 follow-on deals are included (companies acquired more than once, or acquired after public offering), then the 2019 volume surges to $22BN. $4.5BN of the 2019 exits were in computing services and corporate software, $2.3BN in the chips sector, $1.7BN in life sciences, and $1BN in the Internet sector.

The past decade featured 587 exits, totaling $71BN. If follow-on deals are included, the total surges to $108BN.

Major US corporations persist in leading the acquisition of Israeli hightech companies – $8.9BN in 2019 (Globes Business Daily, December 24, 2019).

The substantial flow of private US investment – establishing, in Israel, multitude of research and development centers – reflects Israel’s unique contribution to the US economy in terms of research and development, enhanced US competitiveness in the global market, increased exports of US products and expanded base of US employment.

  1. Intel invested $2BN in the acquisition of Israel’s 3-year-old Habana Laboratories, which develops chips for Artificial Intelligence applications. It is Intel’s 13th acquisition of an Israeli company (Bloomberg, December 16). Intel has operated in Israel since 1974, employing 12,000 people in one manufacturing plant and four research and development centers.
  2. Texas-based Noble Energy, which operates Israel’s largest offshore natural gas field, Leviathan, will start supplying the local Israeli market by the end of December. In January, 2020, Noble Energy and Israel’s Delek Drilling will start exporting natural gas to Egypt, as prescribed by a $20BN deal – of 85 billion cubic meters (3 trillion cubic feet) – concluded with Egypt. Egypt will be able to export the imported natural gas following its liquefaction (Al-Monitor, Dec. 13) in Egyptian installations.
  3. Key Israeli economic factors in 2020:

*Interest rate is expected to remain low (around zero);
*Inflation is expected to remain low (around 2%);
*The ratio of national debt to gross domestic product is expected to remain low (around 60%, compared to the US – 60% and Japan – almost 250%);
*Expanding employment and all time low unemployment (4% and below);
*Expanded employment of ultra-orthodox Jews and Arabs;
*Annual economic growth is expected to be sustained at 3%-3.5%;
*Israel’s Shekel is expected to remain strong (around 3.4 per dollar);
*Overseas investment in Israel’s hightech will persist at high levels;
*Export of high added-value commercial and military products will keep growing, irrespective of the strong Shekel;
*Offshore natural gas export (to Egypt and in the long run to Europe) will alleviate the burden of the 2019 growing budget deficit, which will require across-the-board budget cuts;
*Israel’s demography will remain robust (high Jewish fertility rate and growing net-immigration/Aliyah);
*Israel’s solid economy provides for a friendly debt-financing environment.
(Globes, December 17).

  1. Some 140 airliners land in Israel, reflecting the sizeable number of Israelis flying abroad (8.5MN in 2019) and tourists (4.5MN in 2019). Israel’s population is 9 million. The volume of passengers to/from Israel grew by 9% in 2019, compared with a 5% global growth. It contributed $16BN and 184,000 jobs to Israel’s economy. Direct flights were initiated from Israel to Las Vegas, Chicago, Brazil and Chile, and additional direct flights are expected, in 2020, to Dallas, Tokyo and Australia (Globes, Dec. 24, 2020).

 

 

 

 

Straight from the Jerusalem Boardroom #243

  1. According to Standard & Poor, Fitch and Moody’s – the world’s top credit rating companies – Israel and Australia are the only two Western countries whose 2019 credit rating (reflecting economic growth) is higher than it was before the global economic meltdown of 2007/2008. Currently, Israel is rated AA- by Standard & Poor, A+ by Fitch and A1 by Moody’s.
  2. According to the London Economist (November 5, 2019), despite short-term political uncertainty, Israel’s economic growth is sustained by a strong domestic consumption, an expansion of natural gas explorations, findings and export, and the continued dynamism of the hightech sector, which has attracted substantial foreign investment. For example, Intel announced its plan to invest $11BN in a new export-oriented semiconductor manufacturing facility in Israel [as a follow up to the 2016 acquisition of Israel’s Mobileye for $15.3BN and investment in scores of Israeli startups].
    Israel’s economy features low unemployment (3.7%) and rising real wages. Exports are expected to rise despite the relative global economic slowdown, and independent of the continued appreciation of the Shekel (the strongest currency against the US dollar), but due to the initiation of natural gas exports.
    GDP growth is expected to slow to 2.9% in 2020, before recovering to 3.8% in 2021 and 4% in 2022.
  3. The NYC-based Centerbridge Partners and Greenwich, CT-based Gallatin Point Capital acquired 32.5% of Phoenix (Israel’s 2nd largest insurance group) for $450MN (Globes Business Daily, Nov. 5, 2019). Germany’s insurance giant, Munich Re, invested $250MN in Israel’s Next Digital Insurance startup, which was founded in 2016 by entrepreneurs who in 2014 sold their previous startup, Check, to the Silicon Valley-based Intuit for $360MN (Globes, October 8). The Greenwich, CT-based General Atlantic led a $165MN investment in Israel’s Riskified, which develops software preventing fraud and verifying consumer identities (Wall Street Journal, Nov. 5). Israel has become Europe’s Silicon Valley. During the first half of 2019, German investors accounted to 30% of the number of European deals in Israel’s ecosystem, including a branch of Merck, the global pharmaceutical giant. While German investment profile is dwarfed by the USA, 60% of the leading Frankfurt Stock Exchange companies have Israeli branches, seeking Israeli technologies, surging since 2016. In 2018, German investors were 4th in the number of Israeli deals – 5% of total deals foreign investment – between the UK’s 7% and China’s 4% (Globes, August 12).
  4. Egypt’s Middle East News Agency reported on November 11, 2019 that Noble Energy and Israel’s Delek Drilling, the operators of Israel’s largest natural gas fields, established a $518MN joint venture with Egypt’s Dolphinus Holdings, which will pave the way for Israeli natural gas exports to Egypt (85.3BN cubic meters over 15 years), starting on January 1, 2020.
  5. The Greece-based Energean Oil & Gas (jointly with Israel’s Opportunity Energy Resources) published the results of its appraisal drilling in Israel’s Karish North Discovery, estimating recoverable resources of 0.9 trillion cubic feet (25 billion cubic meters) of natural gas plus 34MN barrels of light oil/condensate (natural gas liquids), in addition to 2.4 Tcf (68 BCM) and 33MN barrels of light oil/condensate discovered previously. Energean recently obtained licenses for four additional marine exploration sites. 12 more offshore drilling licenses issued to overseas operators, including Britain’s Cairn Energy and Pharos Energy.
  6. 600 of Israel’s 8,000 startups are focused on transportation-related solutions. Israel has become a leading global hub for smart mobility, according to David Liniado, Vice President of the Atlanta-based Cox Automotive Mobility. Cox is expanding partnership with Israeli startups, including a joint research & development center with Drive TLV, which involves Volvo, Honda and Hertz. The Paris-based Faurecia (114,000 employees in 35 countries), a world leader in automotive technology invested in Israel’s Guardknox, a cybersecurity company, reinforcing passengers’ safety and data security.
    Ford is setting up an Israeli research & development center, as a follow up to the 2016 acquisition of Israel’s SAIPS, which specializes in computer vision and self-driving car learning. Intel and Nvidia established research & development centers in Israel, which develop chips for autonomous vehicles. GM founded its research & development center in Israel in 2008. BMW is about to introduce its own Israeli research & development center, as did Volkswagen in 2018. Over 20 global carmakers and suppliers are involved with Israeli research & development centers, leveraging Israel’s brain power.

Straight from the Jerusalem Boardroom #242

According to the British daily Financial Times (August 28, 2019), the Israeli shekel ranks as the best performing currency against the US dollar among 31 major currencies tracked by Bloomberg, up almost 6%, as fund managers have sought refuge from global economic turmoil. The shekel had strengthen thanks to Israel’s perceived status as an emerging markets’ safe haven and improved economic fundamentals such as:

*A long term expansion in employment;
*Current account surpluses;
*A fall in the Debt-to-GDP ratio under a 16-year-old fiscal stabilization program;
*Bank of Israel raised interest rate once since 2011, allowing it to hover near zero (0.25%) for years, as the economy reaches near full-employment.

The British daily quotes Win Thin, Head of Currency strategy at New York’s Brown Brothers Harriman: “Israel is one of the best of the lot among emerging markets.  It is stable and away from the fray of the trade wars. It has just been a good solid story.”

The Financial Times adds: “The haven status appears to be decoupled from political instability, including growing tensions with Iran; air and drone strikes attributed to the Israeli military in Syria, Lebanon and Iraq; inconclusive elections last April, and the possibility of Prime Minister Netanyahu facing indictment for alleged bribery and fraud.

“But, as investors fret about a global recession, the country’s tech-heavy export-driven economy has remained relatively immune.  High-value exports, including military hardware, are generally unaffected by sudden appreciation in local currency, and are often priced in US dollars to begin with.

“Foreign investment has held steady… and Israel continues to prepare for exports from natural gas deposits that are coming online, including a $15BN contract to supply Egypt by early 2019. Such positive factors are pushing the shekel higher.

“This year’s next best performing major currencies, after the shekel, are the Russian rouble, Japanese Yen and the Canadian dollar.”

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Demography

Demographic optimism IN, demographic pessimism OUT

Ambassador (ret.) Yoram Ettinger, “Second Thought: a US-Israel Initiative”
October 2, 2023

The suggestion that Israel should retreat from the mountain ridges of Judea and Samaria (the West Bank) is based, partly, on the assumption that the Jewish majority is exposed to an “Arab demographic time bomb,” which would explode if Israel were to apply its law to Judea and Samaria.

However, Israel’s Jewish majority is not vulnerable to an “Arab demographic time bomb,” but benefits from demographic momentum, fertility-wise and migration-wise.

Arab demography artificially inflated

This erroneous assumption is based on the official Palestinian numbers, which are embraced and reverberated by the global community – with no due-diligence auditing – ignoring a 1.6-million-person artificial inflation of the reported number of Arabs in Judea and Samaria.

For instance:

*The official Palestinian census includes 500,000 residents, who have been away for over a year, while international standards require their elimination from the census (until they return for, at least, 90 days).  This number was documented by the Palestinian Central Bureau of Statistics (325,000 in 1997), Election Commission (400,000 in 2005) and the Ministry of Interior, increasing systematically through births.

*The Palestinian census ignores the net-emigration of 390,000 since the first 1997 census, as documented by Israel’s Population and Immigration Authority, which supervises Israel’s international passages.

*375,000 Jerusalem Arabs and more than 150,000 (mostly) Judea and Samaria Arabs, who married Israeli Arabs are doubly-counted (by Israel and the Palestinian Authority). This number increases systematically through births.

*A September 2006 World Bank report documented a 32% artificial inflation of the number of births.  At the same time, death has been substantially underreported as evidenced by the 2007 Palestinian census, which included Arabs born in 1845….   

*The aforementioned data indicates an artificial inflation of 1.6 million in the Palestinian census of Judea and Samria Arabs: 1.4 million – not 3 million – Arabs.

Arab demography Westernized

Contrary to Western conventional wisdom, Arab demography has been westernized dramatically in recent years, from a fertility rate of 9 births per woman west of the Jordan River during the 1960s to 2.85 births in 2021 in pre-1967 Israel and 3.02 in Judea and Samaria.

The westernization of Arab demography has been a result of sweeping urbanization. From a 70%-rural-population in Judea and Samaria in 1967, to a 77%-urban-population in 2022.  In addition, almost all girls complete high school, resulting in the expanded integration of women in employment and academia, as well as an increase in wedding age (from 15 to 24-year-old).  Moreover, there has been an expansion of the use of contraceptives (70% of women in the Palestinian Authority) and a shorter fertility cycle (25 through 45 in 2022 compared to 16 through 55 during the 1960s).

Demographic westernization has occurred in the entire Moslem World, other than the Sub-Saharah countries: In 2022, Jordan – 2.9 births per woman, Iran – 1.9, Saudi Arabia – 1.9, Morocco – 2.27, Iraq – 3.17, Egypt 2.76, Yemen – 2.91, the UAE – 1.62, etc.

Jewish demographic momentum

Israel’s Jewish demography features a fertility momentum – especially in the secular sector – simultaneously with a moderate decline in the ultra-orthodox sector. In fact, Jewish fertility (3.13 births per woman) is higher than any Arab country, other than Iraq’s (3.17). The OECD’s average fertility rate is 1.61 births per woman.

In 2022, the number of Jewish births (137,566) was 71% higher than in 1995 (80,400), while the number of Arab births (43,417) was 19% higher than in 1995 (36,500).

Contrary to most global societies, Israel enjoys a positive correlation between the level of fertility, on the one hand, and the level of education, income, urbanization and (the rise of) wedding age on the other hand.

The growth of Jewish fertility reflects a high level of patriotism, optimism, attachment to roots, communal responsibility, frontier mentality, high regard for raising children and the decline in the number of abortions.

The Jewish population is growing younger, while the Arab population is growing older.

Until the 1990s, there was a demographic race between Arab births and Jewish immigration.  Since the 1990s, the race is between Jewish and Arab births, while net-migration provides a robust boost to Jewish demography.

The Jewish demographic momentum has been bolstered by an annual Aliyah (Jewish immigration) – which has been the most critical engine of Israel’s economic, educational, technological and military growth – simultaneously with the declining scope of annual emigration.  From an additional 14,200 emigrants in 1990 to 10,800 in 2020, while the overall population has doubled itself since 1990. A substantial decline in emigration has taken place since the 2007/2008 global economic meltdown, which has underscored the relative stability and growth of Israel’s economy.

In 2023, there has been an increase in Aliyah. This highlights a potential of 500,000 Olim (Jewish immigrants) in five years – from Europe, the former USSR, Latin and North America – should the Israeli government resurrect the pro-active Aliyah policy, which defined Israel from 1948-1992.

The bottom line

In 1897, upon convening the First Zionist Congress, there was a 9% Jewish minority in the combined area of Judea, Samaria and pre-1967 Israel.

In 1948, upon the establishment of the Jewish State, there was a 39% Jewish minority in the combined area of Judea, Samaria and pre-1967 Israel.

In 2022, there was a 69% Jewish majority in the combined area of Judea, Samaria and pre-1967 Israel (7.5 million Jews, 2 million Arabs in pre-1967 Israel and 1.4 million Arabs in Judea and Samaria), benefiting from a tailwind of fertility and net-migration.

Those who claim that the Jewish majority – in the combined area of Judea, Samaria and pre-1967 Israel – is threatened by an Arab demographic time bomb are either dramatically mistaken, or outrageously misleading.

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Iran

Diplomatic option toward Iran is self-destructive

Ambassador (ret.) Yoram Ettinger, “Second Thought: a US-Israel Initiative”
December 19, 2023

*The US State Department’s diplomatic option has facilitated the transformation of Iran from “the American policeman of the Gulf” to “the largest anti-American venomous octopus in the world,” stretching its rogue arms from the Persian Gulf through Africa to Latin America and the US-Mexico border, which it perceives as the soft underbelly of the US.

*The diplomatic option – including a frail US response to sustained Iranian attacks on US installations in the Persian Gulf region – has aggravated Middle East instability, threatening the survival of every pro-US Arab regime, and is inducing anti-US global Islamic terrorism.  This is severely eroding US posture of deterrence, benefitting Russia, China and mostly Iran, while undermining US national and homeland security. 

*The diplomatic option has suspended most economic sanctions – without Congressional consent – surging Iran’s oil export from 500,000 barrels per day to 2-3 million barrels per day, increasing Iran’s national income by some $100bn, mostly dedicated to bolster Iran’s anti-US rogue operations, increasingly in Latin America, the US’ backyard.

*The diplomatic option has consistently overlooked the decisive power of the Ayatollahs’ imperialistic ideology, and its determination to export the anti-US Islamic Shiite Revolution. Consequently, the State Department has deluded itself into believing that an astounding financial and diplomatic bonanza would induce Iran’s Ayatollahs to accept peaceful coexistence with their pro-US Arab Sunni neighbors, become good-faith negotiators, and abandon their 1,400-year-old religious, fanatic vision, which is enshrined in their Constitution, K-12 school curriculum, Friday mosque sermons and official media.

*However, as expected, the mega-billion-dollar bonanza yielded by the diplomatic option (e.g., the 2015 JCPOA and the current suspension of economic sanctions) has bolstered its global terroristic network, advancing its vision to topple all pro-US Sunni regimes, and bring the “infidel” West to submission, especially the “The Great American Satan,” while egregiously oppressing and suppressing Iranian women and religious and ethnic minorities.  

*The State Department’s diplomatic option was initiated in 1978/1979, stabbing in the back the pro-US Shah of Iran, and contending that Ayatollah Khomeini was anti-Communist and therefore potentially pro-Western and a stabilizing element geopolitically, “…holding a Gandhi-like positionpreoccupied with tractors, not tanks….”

*Has the diplomatic option dumped the Monroe Doctrine?! In 2023, Iran’s Ayatollahs invest mega billions of dollars in fueling civil wars, terrorism, drug trafficking and money laundering throughout the Middle East, Africa and especially in Latin America. There, they collaborate – along with Hezbollah terrorists – with the drug cartels of Mexico, Columbia, Bolivia, Ecuador and Brazil, and train terror organizations. They cooperate with all anti-US governments (especially Venezuela, Cuba, Nicaragua, and Bolivia), testing ballistic missiles, and supplying predator drones, attack boats, anti-ship missiles, and equipment for the construction of underground tunnels along the US-Mexico border, which smuggle drugs and illegal Middle East terrorists into the US.

*The bottom line is: Fool me once, shame on you; fool me twice shame on me!  After 44 years of being fooled by the Ayatollahs, critically undermining the strategic posture of the US and its allies, it is time to reassess the diplomatic option, and consider other options, such as regime-change and a credible military threat hovering above the head of the Ayatollahs.  

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Judea & Samaria

Secretary Blinken on settlements – vindicated by facts?

Ambassador (ret.) Yoram Ettinger, “Second Thought: a US-Israel Initiative”
February 27, 2024

Secretary of State Antony Blinken represents conventional wisdom when claiming that “It’s been longstanding US policy… that new settlements are… inconsistent with international law.”

However, conventional wisdom is frequently demolished by the march of facts

For instance:

*According to Prof. Eugene Rostow, who was the co-author of the November 22, 1967 UN Security Council Resolution 242, served as Undersecretary of State and was the Dean of Yale University Law School: “Jews have the same right to settle in the West Bank as they have in Haifa.”

*According to UN Resolution 242, Israel is required to withdraw from territories, not the territories, nor from all the territories, but some of the territories, which included Judea and Samaria (the West Bank), East Jerusalem, the Gaza Strip, the Sinai Peninsula and the Golan Heights.  Moreover, according to Prof. Rostow, “resolutions calling for withdrawal from all the territories were defeated in the Security Council and the General Assembly…. Israel was not to be forced back to the fragile and vulnerable [9-15 mile-wide] lines… but to secure and recognized boundaries, agreed to by the parties…. In making peace with Egypt in 1979, Israel withdrew from the entire Sinai… [which amounts to] more than 90% of the territories occupied in 1967….”

*Former President of the International Court of Justice, Judge Stephen M. Schwebel, stated: “Between Israel, acting defensively in 1948 and 1967 (according to Article 52 of the UN Charter), on the one hand, and her Arab neighbors, acting aggressively in 1948 and 1967, on the other, Israel has better title in the territory of what was [British Mandate] Palestine…. It follows that modifications of the 1949 armistice lines among those States within former Palestinian territory are lawful…. [The 1967] Israeli conquest of territory was defensive rather than aggressive… [as] indicated by Egypt’s prior closure of the Straits of Tiran, blockade of the Israeli port of Eilat, and the amassing of [Egyptian] troops in Sinai, coupled with its ejection of the UN Emergency Force…[and] Jordan’s initiated hostilities against Israel…. The 1948 Arab invasion of the nascent State of Israel further demonstrated that Egypt’s seizure of the Gaza Strip, and Jordan’s seizure and subsequent annexation of the West Bank and the old city of Jerusalem, were unlawful….” 

*The legal status of Judea and Samaria is embedded in the following 4 authoritative, binding, internationally-ratified documents, which recognize the area for what it has been: the cradle of Jewish history, culture, language, aspirations and religion.

(I) The November 2, 1917 Balfour Declaration, issued by Britain, calling for “the establishment in Palestine (a synonym to the Land of Israel) of a national home for the Jewish people….”
(II) The April 24, 1920 resolution, by the post-First World War San Remo Peace Conference of the Allied Powers Supreme Council, entrusted both sides of the Jordan River to the British Mandate for Palestine, for the reestablishment of the Jewish Commonwealth: “the Mandatory will be responsible for putting into effect the [Balfour] declaration originally made on November 2, 1917, by the Government of His Britannic Majesty, and adopted by the said Powers, in favor of the establishment in Palestine of a national home for the Jewish people.” It was one of over 20 Mandates (trusteeships) established following WW1, responsible for the boundaries of most Arab countries.
(III) The July 24, 1922 Mandate for Palestine was ratified by the Council of the League of Nations, entrusted Britain to establish a Jewish state in the entire area west of the Jordan River, as demonstrated by its 6th article: “[to] encourage… close settlement by Jews on the land, including State lands and waste lands….” The Mandate was dedicated exclusively to Jewish national rights, while guaranteeing the civic rights of all other religious and ethnic groups. On July 23, 1923, the Ottoman Empire signed the Treaty of Lausanne, which included the Mandate for Palestine.  
(IV) The October 24, 1945 Article 80 of the UN Charter incorporated the Mandate for Palestine into the UN Charter.  Accordingly, the UN or any other entity cannot transfer Jewish rights in Palestine – including immigration and settlement – to any other party. According to Article 80 of the UN Charter and the Mandate for Palestine, the 1967 war of self-defense returned Jerusalem and Judea and Samaria to its legal owner, the Jewish state.  Legally and geo-strategically the rules of “belligerent occupation” do not apply Israel’s presence in Judea and Samaria, since they are not “foreign territory,” and Jordan did not have a legitimate title over the West Bank.  Moreover, the rules of “belligerent occupation” do not apply in view of the 1994 Israel-Jordan Peace Treaty. The 1950-67 Jordanian occupation of Judea and Samaria violated international law and was recognized only by Britain and Pakistan.

*The 1949 4th Geneva Convention prohibits the forced transfer of populations to areas previously occupied by a legitimate sovereign power. However, Israel has not forced Jews to settle in Judea and Samaria, and Jordan’s sovereignty there was never legal.

*The November 29, 1947 UN General Assembly Partition Resolution 181 was a recommendation, lacking legal stature, superseded by the Mandate for Palestine. The 1949 Armistice (non-peace) Agreements between Israel and its neighbors delineated “non-territorial boundaries.”   

*The term “Palestine” was a Greek and then a Roman attempt (following the 135 CE Jewish rebellion) to eradicate Jews and Judaism from human memory. It substituted “Israel, Judea and Samaria” with “Palaestina,” a derivative of the Philistines, an arch enemy of the Jewish people, whose origin was not in Arabia, but in the Greek Aegian islands.    

*The aforementioned march of facts demonstrates that Secretary Blinken’s conventional wisdom on the Jewish settlements in Judea and Samaria is based on gross misperceptions and misrepresentations, which fuels infidelity to law, undermining the pursuit of peace.

*More on the legality of Jewish settlements in Judea and Samaria in this article by George Mason University Law School Prof. Eugene Kontrovich.

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Jerusalem

United Jerusalem – a shared US-Israel legacy and interest

US departure from the recognition of a United Jerusalem as the exclusive capital of the Jewish State, and the site of the US Embassy to Israel, would be consistent with the track record of the State Department, which has been systematically wrong on Middle East issues, such as its opposition to the establishment of the Jewish State; stabbing the back of the pro-US Shah of Iran and Mubarak of Egypt, and pressuring the pro-US Saudi Arabia and the United Arab Emirates, while courting the anti-US Ayatollahs of Iran, Saddam Hussein, Arafat, the Muslim Brotherhood, Hamas, the Palestinian Authority and the Houthis of Yemen; transforming Libya into a platform of global Islamic terrorism and civil wars; etc..

However, such departure would violate US law, defy a 3,000 year old reality – documented by a litany of archeological sites and a multitude of documents from Biblical time until today – spurn US history and geography, and undermine US national and homeland security.

United Jerusalem and the US law

Establishing a US Consulate General in Jerusalem – which would be a de facto US Embassy to the Palestinian Authority – would violate the Jerusalem Embassy Act, which became US law on November 8, 1995 with substantially more than a veto-override majority on Capitol Hill.

According to the Jerusalem Embassy Act, which enjoys massive support among the US population and, therefore, in both chambers of Congress:

“Jerusalem should remain an undivided city in which the rights of every ethnic and religious group are protected….

“Jerusalem should be recognized as the capital of the state of Israel; and the United States Embassy in Israel should be established in Jerusalem….

“In 1990, Congress unanimously adopted Senate Concurrent Resolution 106, which declares that Congress ‘strongly believes that Jerusalem must remain an undivided city in which the rights of every ethnic and religious group are protected….’

“In 1992, the United States Senate and House of Representatives unanimously adopted Senate Concurrent Resolution 113… to commemorate the 25th anniversary of the reunification of Jerusalem, and reaffirming Congressional sentiment that Jerusalem must remain an undivided city….

“In 1996, the state of Israel will celebrate the 3,000th anniversary of the Jewish presence in Jerusalem since King David’s entry….

“The term ‘United States Embassy’ means the offices of the United States diplomatic mission and the residence of the United States chief of mission.”

United Jerusalem and the legacy of the Founding Fathers

The US Early Pilgrims and Founding Fathers were inspired – in their unification of the 13 colonies – by King David’s unification of the 12 Jewish tribes into a united political entity, and establishing Jerusalem as the capital city, which did not belong to any of the tribes (hence, Washington, DC does not belong to any state). King David entered Jerusalem 3,000 years before modern day US presidents entered the White House and 2,755 years before the US gained its independence.

The impact of Jerusalem on the US founders of the Federalist Papers, the Declaration of Independence, the Constitution, the Bill of Rights, the Federalist system and overall civic life is reflected by the existence, in the US, of 18 Jerusalems (4 in Maryland; 2 in Vermont, Georgia and New York; and 1 in Ohio, Michigan, Arkansas, North Carolina, Alabama, Utah, Rhode Island and Tennessee), 32 Salems (the original Biblical name of Jerusalem) and many Zions (a Biblical synonym for Jerusalem and the Land of Israel).  Moreover, in the US there are thousands of cities, towns, mountains, cliffs, deserts, national parks and streets bearing Biblical names.

The Jerusalem reality and US interests

Recognizing the Jerusalem reality and adherence to the 1995 Jerusalem Embassy Act – and the subsequent recognition of Jerusalem as Israel’s capital, the site of the US Embassy to Israel – bolstered the US posture of deterrence in defiance of Arab/Islamic pressure and threats.

Contrary to the doomsday assessments by the State Department and the “elite” US media – which have been wrong on most Middle East issues – the May 2018 implementation of the 1995 law did not intensify Palestinian, Arab and Islamic terrorism. State Department “wise men” were equally wrong when they warned that Israel’s 1967 reunification of Jerusalem would ignite a worldwide anti-Israel and anti-US Islamic volcanic eruption.

Adherence to the 1995 law distinguishes the US President, Congress and most Americans from the state of mind of rogue regimes and terror organizations, the anti-US UN, the vacillating Europe, and the cosmopolitan worldview of the State Department, which has systematically played-down the US’ unilateral, independent and (sometimes) defiant national security action.

On the other hand, US procrastination on the implementation of the 1995 law – by Presidents Clinton, Bush and Obama – eroded the US posture of deterrence, since it was rightly perceived by the world as appeasement in the face of pressure and threats from Arab/Muslim regimes and terrorists.  As expected, it radicalized Arab expectations and demands, failed to advance the cause of Israel-Arab peace, fueled Islamic terrorism, and severely undermined US national and homeland security. For example, blowing up the US Embassies in Kenya and Tanzania and murdering 224 persons in August 1998; blowing up the USS Cole destroyer in the port of Aden and murdering 17 US sailors in October 2000; the 9/11 Twin Towers massacre, etc.

Jerusalem and Israel’s defiance of US pressure

In 1949, President Truman followed Secretary of State Marshall’s policy, pressuring Israel to refrain from annexing West Jerusalem and to accept the internationalization of the ancient capital of the Jewish people.

in 1950, in defiance of brutal US and global pressure to internationalize Jerusalem, Prime Minister David Ben Gurion reacted constructively by proclaiming Jerusalem the capital of the Jewish State, relocating government agencies from Tel Aviv to Jerusalem, and settling tens of thousands of Olim (Jewish immigrants to Israel) in Jerusalem. He upgraded the transportation infrastructure to Jerusalem, erected new Jewish neighborhoods along the 1949 cease fire lines in Jerusalem, and provided the city land reserves for long-term growth.

In 1953, Ben Gurion rebuffed President Eisenhower’s pressure – inspired by Secretary of State Dulles – to refrain from relocating Israel’s Foreign Ministry from Tel Aviv to Jerusalem.

In 1967, President Johnson followed the advice of Secretary of State Rusk – who opposed Israel’s 1948 Declaration of Independence – highlighting the international status of Jerusalem, and warned Israel against the reunification of Jerusalem and construction in its eastern section. Prime Minister Levi Eshkol adopted Ben Gurion’s statesmanship, fended off the US pressure, reunited Jerusalem, built the first Jerusalem neighborhood beyond the 1949 ceasefire lines, Ramat Eshkol, in addition to the first wave of Jewish communities in Judea and Samaria (West Bank), the Jordan Valley and the Golan Heights.

In 1970, President Nixon collaborated with Secretary of State Rogers, attempting to repartition Jerusalem, pressuring Israel to relinquish control of Jerusalem’s Holy Basin, and to stop Israel’s plans to construct additional neighborhoods in eastern Jerusalem.  However, Prime Minister Golda Meir refused to rescind the reunification of Jerusalem, and proceeded to lay the foundation for additional Jerusalem neighborhoods beyond the 1949 ceasefire lines: Gilo, Ramot Alon, French Hill and Neve’ Yaakov, currently home to 150,000 people.

In 1977-1992, Prime Ministers Menachem Begin and Yitzhak Shamir defied US and global pressure, expanding construction in Jerusalem, sending a clear message: “Jerusalem is the exclusive and non-negotiable capital of Israel!”

“[In 1978], at the very end of [Prime Minister Begin’s] successful Camp David talks with President Jimmy Carter and President Anwar Sadat, literally minutes before the signing ceremony, the American president had approached [Begin] with ‘Just one final formal item.’ Sadat, said the president, was asking that Begin put his signature to a simple letter committing him to place Jerusalem on the negotiating table of the final peace accord.  ‘I refused to accept the letter, let alone sign it,’ rumbled Begin. ‘If I forgot thee O Jerusalem, let my right hand forget its cunning,’ said [Begin] to the president of the United States of America, ‘and may my tongue cleave to my mouth’ (The Prime Ministers – An Intimate Portrait of Leaders of Israel, 2010)”

In 2021, Prime Minister Bennett should follow in the footsteps of Israel’s Founding Father, Ben Gurion, who stated: “Jerusalem is equal to the whole of the Land of Israel. Jerusalem is not just a central Jewish settlement. Jerusalem is an invaluable global historical symbol. The Jewish People and the entire world shall judge us in accordance with our steadfastness on Jerusalem (“We and Our Neighbors,” p. 175. 1929).”

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Jewish Holidays

Chanukah guide for the perplexed, 2023

Ambassador (ret.) Yoram Ettinger, “Second Thought: a US-Israel Initiative”
November 29, 2023

More on Jewish holidays: SmashwordsAmazon

1. According to Israel’s Founding Father, David Ben Gurion: Chanukah commemorates “the struggle of the Maccabees, which was one of the most dramatic clashes of civilizations in human history, not merely a political-military struggle against foreign oppression…. Unlike many peoples, the meager Jewish people did not assimilate.  The Jewish people prevailed, won, sustained and enhanced their independence and unique civilization…. It was the spirit of the people, rather than the failed spirit of the establishment, which enabled the Hasmoneans to overcome one of the most magnificent spiritual, political and military challenges in Jewish history….” (Uniqueness and Destiny, pp 20-22, David Ben Gurion, IDF Publishing, 1953).

2. A Jewish national liberation holiday.  Chanukah (evening of December 7 – December 15, 2023) is the only Jewish holiday that commemorates an ancient national liberation struggle in the Land of Israel, unlike the national liberation holidays, Passover, Sukkot/Tabernacles and Shavu’ot/Pentecost, which commemorate the liberation from slavery in Egypt to independence in the land of Israel, and unlike Purim, which commemorates liberation from a Persian attempt to annihilate the Jewish people.

3. Chanukah and the Land of Israel.  When ordered by Emperor Antiochus IV Epiphanes of the Seleucid region to end the Jewish “occupation” of Jerusalem, Jaffa, Gaza, Gezer and Akron, Shimon the Maccabee responded: “We have not occupied a foreign land…. We have liberated the land of our forefathers from foreign occupation (Book of Maccabees A: 15:33).”

Chanukah highlights the centrality of the Land of Israel in the formation of Jewish history, religion, culture and language. The mountain ridges of Judea and Southern Samaria (the West Bank) were the platform for the Maccabean military battles: Mitzpah (the burial site of the Prophet Samuel, overlooking Jerusalem), Beth El (the site of the Ark of the Covenant and Judah the Maccabee’s initial headquarters), Beth Horon (Judah’s victory over Seron), Hadashah (Judah’s victory over Nicanor), Beth Zur (Judah’s victory over Lysias), Ma’aleh Levona (Judah’s victory over Apolonius), Adora’yim (a Maccabean fortress), Eleazar (named after Mattityahu’s youngest Maccabee son), Beit Zachariya (Judah’s first defeat), Ba’al Hatzor (where Judah was defeated and killed), Te’qoah, Mikhmash and Gophnah (bases of Shimon and Yonatan), the Judean Desert, etc.

4. Historical context  Chanukah is narrated in the four Books of the MaccabeesThe Scroll of Antiochus and The Wars of the Jews.

In 323 BCE, following the death of Alexander the Great (Alexander III) who held Judaism in high esteem, the Greek Empire was split into three independent and rival mini-empires: Greece, Seleucid/Syria and Ptolemaic/Egypt.

In 175 BCE, the Seleucid/Syrian Emperor Antiochus (IV) Epiphanes claimed the Land of Israel. He suspected that the Jews were allies of his Ptolemaic/Egyptian enemy.  The Seleucid emperor was known for eccentric behavior, hence his name, Epiphanes, which means “divine manifestation.”  He aimed to exterminate Judaism and convert Jews to Hellenism. In 169 BCE, he devastated Jerusalem, attempting to decimate the Jewish population, and outlaw the practice of Judaism.

In 166/7 BCE, a Jewish rebellion was led by the non-establishment Hasmonean (Maccabee) family from the rural town of Modi’in, half-way between Jerusalem and the Mediterranean.  The rebellion was headed by Mattityahu, the priest, and his five sons, Yochanan, Judah, Shimon, Yonatan and Eleazar, who fought the Seleucid occupier and restored Jewish independence.  The Hasmonean dynasty was replete with external and internal wars and lasted until 37 BCE, when Herod the Great (a proxy of Rome) defeated Antigonus II Mattathias.

5. The reputation of Jews as superb warriors was reaffirmed by the success of the Maccabees on the battlefield. In fact, they were frequently hired as mercenaries by Egypt, Syria, Carthage, Rome and other global and regional powers.

6. The significance of Chanukah. Chanukah celebrates the Maccabean-led national liberation by conducting in-house family education and lighting candles for 8 days in commemoration of the re-inauguration of Jerusalem’s Jewish Temple and its Menorah (candelabra).

The Hebrew words Chanukah (חנוכה), inauguration (חנוכ) and education ((חנוך possess the same root.

7. As was prophesized by the Prophet Hagai in 520 BCE, the re-inauguration of the Temple took place on the 25th day of the Jewish month of Kislev, which is the month of miracles, such as the post-flood appearance of Noah’s rainbow, the completion of the construction of the Holy Ark by Moses, the laying of the foundations of the Second Temple by Nehemiah, etc.

In 1777, Chanukah candles were lit during the most critical battle at Valley Forge, which solidified the victory of George Washington’s Continental Army over the British monarchy.

The 25th Hebrew word in Genesis is “light,” and the 25th stop during the Exodus was Hashmona (the same Hebrew spelling as Hasmonean-Maccabees).

The first day of Chanukah is celebrated when daylight hours are equal to darkness hours – and when moonlight is hardly noticed – ushering in brighter days.

8. Chanukah highlights the defeat of darkness, disbelief, forgetfulness and pessimism by the spirit of light, faith, commemoration and optimism over.

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Golan

Secretary Blinken on settlements – vindicated by facts?

Islamic Terrorism

US and Israel facing the mutual threat of Islamic terrorism

Ambassador (ret.) Yoram Ettinger, “Second Thought: a US-Israel Initiative”
February 21, 2024

*FBI Director Christopher A. Wray visited Israel on February 14, 2024, during the Israel-Hamas and Israel-Hezbollah wars, meeting with leaders of the Mossad, Israel’s Secret Service, and Israel’s National Police in order to benefit from Israel’s unique urban and tunnel warfare experience and battle tactics in the war against Islamic terrorists, who are advancing the vision of Iran’s Ayatollahs and the Moslem Brotherhood.

*Director Wray considers Israel’s as the most effective battle-tested laboratory of the US armed forces, law enforcement agencies and defense industries.

*Director Wray is aware of the Ayatollahs’ and Hezbollas’ growing entrenchment in Mexico, along the US-Mexico border and throughout Latin America. In fact, since the early 1980s, Iran’s Ayatollahs and Hezbollah have entrenched themselves in Latin America, bolstering collaboration with the drug cartels of Mexico, Columbia, Bolivia, Ecuador and Brazil, all Latin American terror organizations, and each anti-US Latin American government. They supply the drug cartels underground tunnel construction equipment, and train them in the areas of car bombs and Improvised Explosive Devices. In addition, they have leveraged the convoys of illegal aliens from Guatemala to the US-Mexico border, smuggling terrorists and drug traffickers into the US.

*Islamic terrorism has targeted the US since the early 19th century irrespective of US policy and independent of the identity of the US President.  Thus, Islamic terrorism afflicted the US during the presidencies of both Trump and Obama, G.W. Bush and Clinton, Reagan and Carter.

*Hamas is a branch of the Moslem Brotherhood – the largest Sunni terror organization with religious, educational and welfare branches – whose charter aims to topple all national Islamic regimes, establish a universal Islamic society, bring the Western “infidel” – and especially the USA – to submission, and establish Islam as the only legitimate and divinely-ordained religion.

*Hamas and Hezbollah are proxies of Iran’s Ayatollahs, whose Constitution highlights a megalomaniacal vision, which stipulates the toppling of all “apostate” (Sunni) regimes, asserting itself globally – beyond the Persian Gulf, the Middle East, Europe and Africa, all the way to Latin America – and bringing the “infidel” West, and especially “The Great American Satan” to submission.

*Since February 1979, when it toppled the Shah of Iran, the Ayatollahs’ regime has transformed Iran from “The American Policeman of the Gulf” to the leading anti-US epicenter of global terrorism, drug trafficking, money laundering and the proliferation of advanced military systems.

*Israel’s war against Hamas and Hezbollah terrorism has bolstered the US’ defense against Islamic terrorism.

*On November 15, 2023, Director Christopher Wray testified at the House Committee on Homeland Security:

“The war in the Middle East has raised the threat of an attack against Americans in the US to a whole other level…. Since October 7th, we’ve seen a rogue gallery of foreign terrorist organizations call for attacks against Americans and our allies. Hezbollah threatened to attack US interests in the Middle East. Al-Qaida issued specific calls to attack the US. Al-Qaida called on jihadists to attack Americans and Jewish people everywhere. ISIS urged its followers to target Jewish communities in the US and Europe.

“Our most immediate concern is that individuals or small groups will draw twisted inspiration from the events in the Middle East to carry out attacks here at home. That includes homegrown violent extremists inspired by a foreign terrorist organization and domestic violent extremists…. We cannot discount the possibility that Hamas or another foreign terrorist organization may exploit the current conflict to conduct attacks on our own soil…. But it’s not just Hamas. As the world’s largest state sponsor of terrorism, Iran has directly, or by hiring criminals, mounted assassination attempts against dissidents and high-ranking current and former U.S. officials, including right here on American soil. Hezbollah, Iran’s primary strategic partner, has a history of raising money and seeking to obtain weapons here in the US…. Hezbollah has tried to seed operatives, establish infrastructure, and engage in spying here domestically, raising our concern that there may be contingency planning for future operations in the United States….”

*The bottom line is that FBI Director, Christopher Wray, is driven by Middle East reality, not by alternative, less frustrating, but self-destructive reality. Therefore, he does not subscribe to the diplomatic option in the battle against Islamic terrorism, and does not propose to negotiate with – and make financial and diplomatic concessions to – terrorists. He does not expect Iran to accept peaceful coexistence with its pro-US Sunni Arab regimes, conduct good faith negotiation, or abandon its 1,400-year-old fanatic vision. Director Wray attempts to defeat Iran-controlled Islamic terrorists. He does not expect Israel to slow down its war on Hamas, which is a proxy of Iran. Just like Saudi Arabia and all other pro-US Arab countries, Director Wray is aware that the obliteration of Hamas, militarily, politically and educationally, will bolster the posture of deterrence of both Israel and the USA, reducing terror assaults on pro-US Arab countries (e.g., Saudi Arabia, the UAE, Bahrain, Egypt, Jordan and Morocco) and in the US mainland.

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