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Israels economic growth and global economic integration

1. China’s telecommunications conglomerate, Xinwei, is acquiring Israel’s satellite operator, SpaceCom, for $285MN. In 2015, Chinese companies invested about $500MN in Israeli companies. Israel’s trade balance with China is $11BN (10% of Israel’s overall trade balance), doubling the trade balance in 2010, far from the $50MN in 1990. Chinese companies are pushing deeper and further into Israel than ever before, and Israeli companies and government officials are returning the embrace. China is increasingly targeting Israeli general technology, agro-technology and irrigation with private and government money. In 2015, China’s Bright Food bought control of Israel’s Tnuva for $2BN, and in 2011 China’s National Chemical Corp. acquired Israel’s Adama, a pesticides and crop protection company, for $2.4BN. Taiwan’s General Mobile Corporation acquired MassiveImpact, an Israeli Ad Technology company, for tens of millions of dollars.


2. Car manufacturing giant, Ford, which is determined to develop a driverless car by 2021, just made its
first acquisition of an Israeli company, SAIPS, a computer vision and machine learning company. Israel’s NLT was acquired by the San Diego-based SeaSpine for $54MN in milestone payments.

3. The
Minnesota and Ireland-based Medtronic, the world-largest standalone medical technology company, acquired an additional 3.4% of Israel’s Mazor Robotics for $20MN, expanding its ownership to 7.27% of Mazor.  Israel’s Insightec concluded a joint venture agreement with Germany’s Siemens, following a similar agreement with GE.

4. The $3.3BN raised by Israeli startups, since January, 2016 may break the $4.4BN annual record set during 2015.
Intel invested in three Israeli startups, expanding its Israeli investment portfolio to 80 startups with $345MN invested since 1997.

5.  In 2016, the three leading global credit rating companies reaffirmed their confidence in the long-term viability of Israel’s economy. Standard & Poor sustained an A+ rating with stable outlook, Fitch upgraded Israel’s credit rating outlook to “positive,” while retaining its A rating, and Moody’s sustained an A1 rating with stable outlook.

6. Israel’s
government debt/GDP ratio – the Achilles’ heel of most countries – has been reduced from 100% in 2002 to 63.9% in 2016, compared with the Euro Bloc’s 90.7% and the OECD’s 94%.

7. Israel’s unemployment rate has declined to 4.8%,
compared to the OECD average of 6.3% and the Euro Bloc’s 10.1%.  

8. Israel’s IDE is second on
Fortune Magazine’s Change the World List of companies, which have had a positive social/business/innovation impact. IDE builds and operates major desalination plants in Israel and 40 additional countries, such as the USA, China, Mexico, etc. In Carlsbad, Southern California, IDE operates the largest desalination plant ($1BN) in the Western hemisphere, transforming seawater into potable water, providing 8% of San Diego county’s water, at a cost of less than half-a-cent per gallon of drinking water, which amounts to an additional monthly cost of only $5 per homeowner.

9. According to the
Huffington Post: “The emergence of Israel as a small, but significant, player on the world stage is one of the remarkable developments at the end of the post-Cold War era… with a flourishing economy of $300BN and nearly $40,000 GDP per capita…. Its military was rated by the Institute for the Study of War as ‘pilot to pilot and airframe to airframe, the best air force in the world….’ Israel’s extensive work on air defense with the USA, makes it a serious military power…. Its intelligence capabilities are formidable…. With over 250 foreign companies creating research facilities in Israel, its strong high-tech capability has been rated by the University of Lausanne as one of the top five world powers in this key area…. Apple has invested over a billion dollars in creating a hardware development center with 800 employees…. Three of the world’s most powerful countries have invited Israeli companies to work with them in high tech [the USA, Russia and China]…. Israel is also developing a strong relationship with India: $5BN in trade, which could multiply to $15BN if the two sides decide to create a free trade zone.  Israel is the second largest exporter of arms to India, preceded only by Russia….”



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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.

 




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The post-1967 turning point of US-Israel cooperation

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Exposing the myth of the Arab demographic time bomb