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Israel’s economic surge in defiance of adversity

1. Notwithstanding Israel’s unique challenges of the chaotically unpredictable state of the Middle East, the Islamic and Arab onslaught, the scarcity of natural resources (other than brain power), the UN enmity, the European appeasement of rogue regimes, systematic criticism by the “elite” media and the attempt to boycott, divest and sanction, the independent, non-partisan quarterly, The American Interest, stated on January 24: “This is there is a new name on our list of The Eight Greats, Israel….

“Israel is a rising power with a growing impact on world affairs…. Large off-shore discoveries of natural gas and oil are turning Israel into an energy exporter [e.g., a $3.5bn-$4bn dollar initiative was just concluded to expand Israel’s natural gas fields]…. Turkey’s ties with Israel strengthened…. Israel’s newfound clout comes from the rise of industrial sectors and technologies that good Israeli schools, smart Israeli policies and talented Israeli thinkers and entrepreneurs have built…. The rise of domestic cybersecurity and infotech economy…. Private investors all over the world look to invest in Israel’s tech startups…. It’s not just America; India, China and Russia want a piece of Israeli tech wizardry…. In the Middle East, Israel has been transformed from a pariah state to a kingmaker…. Never has Egypt-Israel security cooperation been as close as it is today…. The rise of Iran has made Israel critical to the survival of the Sunni Arabs, including the Gulf States…. Israel begins 2017 as the keystone of a regional anti-Iran alliance, a most-favored-nation in the White House and a country that enjoys good relations with all of the world’s major powers bar Iran….     

2. Bloomberg, February 16, 2017: Israel’s economy grew 6.2% in the fourth quarter of 2016, its most robust gain since 2014, sending the Shekel to its strongest level in more than two years. GDP for 2016 grew 4%, the most since 2013, supported by record-low unemployment rate of 4.3% in December, 2016. Manufacturing reached its highest level in 7 years. Exports advanced 11.2% and capital investment grew by 7.4%.

3. Israel’s debt-to-GDP ratio has systematically declined (62.1% in 2016), compared with Japan’s 250.4%, the USA’s 104.9%, France’s 97.1%, the Euro bloc’s 91.7%, Britain’s 89%, Germany’s 68.2% and South Korea’s 39.9% (Globes, January 23).

4. In 2016, Israel’s population grew by 2% – compared to 1.2% globally, 0.81% in the USA and 0.18% decline in Germany – identical to Israel’s population annual growth during the last 10 years – 83% due to natural growth and 17% due to Aliyah (Jewish immigration), resulting in a substantial expansion of Israel’s infrastructures of housing, transportation, education, health, medical, etc. (Globes business daily, January 9, 2017).

5. While global venture capital funding has declined during the last two years – according to PriceWaterHouseCoopers, Money Tree and CB Insights – $420mn were invested, during January 2017, in Israel’s hightech companies, sustaining the record level of 2016. Israel’s cyber technology companies attract investments. IntSights raised $15mn, 6 months following a round of $7.5mn. Israel’s CrediFi raised $13mn (Globes, Feb. 14). Israel’s Feedvisor raised $20mn (Globes, Feb. 1). Israel’s cyber security SentinelOne raised $70mn, led by RedPoint from the Silicon Valley (Globes, January 26), which also invested $16mn – along with Emergence Capital from the Silicon Valley – in Israel’s Chorus.ai (artificial intelligence), according to Globes, Feb. 8).

6. John Donovan, AT&T’s Exec. Vice President and Chief Strategist: In 2010, we established a research & development center in Israel, which offers a unique array of startups. Unlike other US companies, which acquire Israeli companies, we consider Israel a platform of development and expansion. AT&T’s personnel has grown 20% in 2016 (Globes, Jan. 17).

7. ”The volume of venture capital now flowing into Israel in search of automotive technology instruments is something that has not been seen here since the Internet bubble days in 2000…. There are numerous Israeli companies in the sector which were founded less than three years ago and have raised a few tens of millions of dollars to date, and now have values in the hundreds of millions of dollars…. Sweden’s Volvo and Honda – which actively explore the Israeli potential – represent a potential market of millions of vehicles annually…. Honda has already invested in Israeli auto-tech companies, such as VocalZoom…. The arrival of Hertz’ President (a fleet of 3 million vehicles), to Israel, highlights the change taking place in the auto industry balance of power…. Last week, Volkswagen and Israel’s Mobileye concluded an agreement for future commercialization of Mobileye’s mapping product….” General Motors and Daimler-Chrysler operate research & development centers in Israel (Globes, Feb. 21).

8. “Israel is a power in dental implants…. Israel’s MIS Implants Technology was sold this year, for $375mn to the Pennsylvania-based Dentsply Sirona, the world’s largest manufacturer of professional dental products and technologies….

9. China’s robotics and electronics giant, Midea, acquired control of Israel’s $170mn, Servotronix, for $56mn (Globes, Feb. 13). The Chinese government and public venture funds invested $150mn in the Israel-China BlueEconomy Fund, seeking investments in Israel’s sea-oriented technologies: wind, wave, solar, marine food, artificial islands, water purification, etc. (Globes, January 31).

10.  The NYC-based Wharton Properties’ Tel Aviv Stock Exchange 3.9% bond issue totaled $250MN (Globes, Feb. 23).



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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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Exposing the myth of the Arab demographic time bomb