ISRAEL’S GROWING HIGH-TECH ECONOMY IS CHANGING THE WORLD Posted on May 18, 2017 by Yunna Shapira Printer Friendly Israel Is the Key to Solving the World’s Water Crisis: Bradley Martin, American Spectator, April 26, 2017— One in six people on the planet currently lack access to clean drinking water. By 2025, it is estimated that two-thirds of the world’s population will suffer from water shortages, particularly devastating to children. Yet while most of the world suffers from the lack of clean water, there is one small country that overcame its water shortage and emerged as a net exporter of water. Israel’s Economy Surges Against All Odds: Yoram Ettinger, Jewish Press, May 7, 2017 — There are seven major developments within the Israeli economy that illustrate Israel’s economic surge this past year. Fmr. Amb. Yoram Ettinger lists them all and goes in-depth on the advances made in Israel’s high-tech economy. How Israel Used Weapons and Technology to Become an Ally of China: Yaakov Katz & Amir Bohbot, Newsweek, May. 6, 2017— In the aftermath of the Cultural Revolution, China began embracing capitalism and opening up trade to the West (the U.S. was on the verge of restoring ties to Beijing). And with the Iranian revolution underway, Israel had lost one of its primary arms customers. China, Israeli leaders hoped, could fill that vacuum. Why India And Israel Are Drawing Closer: Jonathan Adelman, The Jerusalem Post, May. 11, 2017 — Both India and Israel are creative countries with significant high-tech power (Indian Bangalore and Hyderabad and Israeli Silicon Wadi). Since India recognized Israel in 1992 relations have grown steadily warmer. Today trade between the two is worth $4 billion a year and Israel is a major arms supplier to India. On Topic Links Intel Acquires Israel’s Mobileye For $15.3 Billion In Largest-Ever Tech Buyout: JNS.org, Mar. 30, 2017 Israeli Economy Ranked 3rd Most Stable In The World For 2016: Zeev Klein, Israel Hayom, Apr. 18, 2017 Israeli Firm Signs Deals With India, Vietnam to Provide Water Out of Thin Air: The Tower, May 4, 2017 Successful Israeli Firm Helps African Development By Exporting The Kibbutz Model: Ilana Messika, Ynet News, May 2, 2017 ISRAEL IS THE KEY TO SOLVING THE WORLD’S WATER CRISIS Bradley Martin American Spectator, Apr. 26, 2017 During the 20th century, the world saw the greatest population boom in human history. The annual growth rate of the world’s population stands at 1.6 percent and the world population is expected to grow from 8 billion to 10 billion by the year 2100. The need to fix our ever-growing water shortage has never been more crucial. One in six people on the planet currently lack access to clean drinking water. By 2025, it is estimated that two-thirds of the world’s population will suffer from water shortages, particularly devastating to children. As it now stands, 1.8 million children die every year due to water-borne illnesses. This number is expected to increase in upcoming years, unless we tackle this global water crisis head on. Yet while most of the world suffers from the lack of clean water, there is one small country that overcame its water shortage and emerged as a net exporter of water. In many ways, the State of Israel is a microcosm of the rest of the world when it comes to water. Since achieving independence in 1948, the country’s population grew from 600,000 to over 8 million people. Despite 60 percent of Israel’s landmass consisting of desert and the country suffering from the worst drought in the Mediterranean in 900 years, Israel not only provides clean and drinkable water to its people but also exports surplus water to the neighboring Kingdom of Jordan and the Palestinian Authority. Israel not only has more than enough water for the purposes of daily consumption, but also to supply its multi-billion-dollar agricultural export economy. Modern drip irrigation was developed in Israel by an engineer named Simcha Blass. In Israel, Blass found inspiration from a dripping faucet near a growing tree and applied his knowledge of micro tubing to create an improved drip method. Patented in 1959 in partnership with Kibbutz Hatzerim, the Blass Emitter became the first efficient method for drip irrigation. Drip irrigation has been instrumental in reversing the process of desertification, as well as ensuring almost no water is wasted in the process of growing crops. How was Israel able to accomplish such a miracle? Israeli advances in water technology can also be attributed to the efforts of the Jewish National Fund and its efforts to implement key infrastructure projects as well as major investments in research and development, which transformed Israel from a country on the verge of a water crisis, to a global leader in water conservation and recycling. JNF has led the way in making sure Israel stays at the forefront of water solutions. JNF’s efforts include the rehabilitation of 250 water reservoirs, which hold a total of 66 billion gallons of recycled water and flood runoff for agricultural use. These reservoirs provide more than half of the water used by Israel’s agricultural sector, as well as 4.4 million people a year. Israel reuses an astonishing 85 percent of its treated sewage for agriculture. By contrast, the United States only uses 5 percent of its wastewater for reuse. JNF has also played an instrumental role in cleaning Israeli rivers and streams. Apart from being an international humanitarian issue, water safety is also an American interest. According to a 2012 report by the U.S. government’s Office of the Director of National Intelligence, many countries in the next ten years that are considered important to the United States will experience water problems that will “risk instability and state failure, increase regional tensions, and distract them from working with the United States on important US policy objectives.” The report goes on to say that North Africa, the Middle East, and South Asia will face major challenges coping with water problems, unless more effective management of water resources is implemented. By making the desert bloom, Israel has become a world leader in water preservation and recycling. In a time when the world is expected to experience an unprecedented water crisis, countries must seek to emulate Israeli policies when it comes to water efficiency, as well as import Israeli technology. In doing so, Israel will succeed in quenching a thirsty world. Bradley Martin is Deputy Editor for the Canadian Institute for Jewish Research and Fellow with the Haym Salomon Center News and Public Policy Group Contents ISRAEL’S ECONOMY SURGES AGAINST ALL ODDS Amb. (Ret.) Yoram Ettinger Jewish Press, May 7, 2017 1. Intel acquired Mobileye, Israel’s auto-tech giant, for $15.3BN (Globes, March 13, 2017). The British equity firm, APAX, acquired Israel’s medical equipment Syneron for $397MN (Globes, April 30). The New Jersey-based Becton-Dickinson, the medical equipment giant, acquired Israel’s CME for $250mn (Globes, April 5). Palo Alto acquired Israel’s LightCyber for $130mn. In 2014, Palo Alto acquired Israel’s Cyvera for $112mn (Globes, March 1). The Washington, DC-based Danaher acquired Israel’s printing quality inspection AVT for $107mn (Globes, March 6). The New York-based event-ticketing giant, SeatGeek, acquired Israel’s TopTix for $56mn (Globes, April 20). 2. 155 Israeli hightech companies raised $1bn during the first quarter of 2017, compared to $1bn during the 4th quarter of 2016, $933mn – 3rd quarter, $1.7bn – 2nd quarter and $1.1bn – 1st quarter of 2016 (Globes, April 29). For example, China’s BOE invested $50mn in Israel’s medical equipment startup, CNoga (Globes, March 6); the Dallas-based LS Health Science Partners invested $30mn in Israel orthopedic equipment Active Implants, in addition to $10mn invested by the Dallas-based View Capital and the Memphis-based River Street Management (Globes March 14); The British auto parts giant, Delphi, led an investment round of $25mn in Israel’s Otonomo, joined by Menlo Park-based Bessemer, New Jersey-based Maniv and London-based LocalGlobe (Globes, April 9); etc. 3. Fitch credit rating reaffirmed Israel’s credit rating at A+, based on the stability of Israel’s economy, balance of payment surplus, expansion of foreign exchange reserves, decline of debt-GDP ratio from 95.2% in 2003 to 62.2% in 2016, decrease of budget deficit, natural gas potential, etc. (Globes, April 26, 2017). 4. The Economist Intelligence Unit (April 1): “Israel’s recent strong overall economic performance…. Real GDP grew by 4% in 2016, set to persist for most of the forecast period…. Export growth will pick up in 2017-18. Further increases in gas output and a modest recovery in exports, particularly in new and established markets in Asia…. The Israeli Shekel’s strength against the Dollar will continue to pose challenges for policymakers…. The Shekel remains strong against the Euro and the British Pound…. Trade deficit will narrow steadily…. The opening of new production facilities by Intel will further boost technology goods exports, and natural gas exports will begin by the end of the forecast period.” 5. Adam Reuter, the Founder & CEO of Israel’s Financial Immunities: Against all odds Israel’s aggregate economic growth since 2008 – 35%, almost twice the OECD average; Israel’s GDP per capita is almost $36,000, 24th in the world (while population is much younger than all advanced economies); Israel’s foreign exchange reserves exceed $100bn, one of the highest per capita in the world; debt-GDP ratio reduced substantially; unemployment decreases below 5%; higher participation in the labor market (more ultra-orthodox and Arab participation); Israel is the global leader in research & development investment per GDP (over 4%), employing 140 per 10,000 in research & investment (the US is second, employing 85 per 10,000); Israel is one of only eight countries developing, manufacturing and launching space modules; Israel is a global co-leader (with the US) in the area of unmanned aerial vehicles and second global power in cyber technology; over 350 global companies operate research & development centers in Israel, which has become the largest industrial global laboratory; Israel’s economy benefit from the highest fertility rate among advanced economies and net-positive-migration (no need to import labor force, in order to sustain economic growth); Israel’s income tax is one of the lowest among OECD countries; Israel’s technology transformed the country from inherent irrigation deficit to surplus (almost 90% of sewage is recycled – drinking water standard – for agriculture); offshore natural gas development is already bolstering the economy; etc. 6. Over 80 Israeli companies are traded on NASDAQ and eleven are traded on Australia’s Stock Exchange (Globes, April 28). 7. Israel’s defense industries exports surged 14% in 2016, reaching $6.5bn (Globes, March 30). A $2bn missile export transaction concluded between India and Israel’s Aircraft Industry (Globes, April 6) Amb. (Ret.) Yoram Ettinger was the Keynote Speaker for CIJR’s 29th Anniversary Gala: ‘Israel’s Contributions Biblical & Modern to Western Civilization’ Contents HOW ISRAEL USED WEAPONS AND TECHNOLOGY TO BECOME AN ALLY OF CHINA Yaakov Katz & Amir Bohbot Newsweek, May 11, 2017 The secret, circuitous journey began late one night in February 1979 when an unmarked Boeing 707 took off from Ben Gurion Airport in Tel Aviv, Israel. Roughly 15 hours later, after a stop in the southern Israeli resort town of Eilat and a refueling break in Kolkata, India, the plane landed in Guangzhou, China, where a group of German-speaking Chinese navigators boarded the aircraft for its fourth and final journey—to a sealed-off military base on the outskirts of Beijing. There, they went to a nearby compound. The “foreigners”—as the Chinese referred to the group aboard—barely spoke to one another, assuming Chinese officials had bugged the cabins. If there was something important to discuss, they went out into the cold, polluted night. The Chinese thought the group consisted of foreign businessmen who had connections with several leading international defense companies, including some from Israel. But that was just a cover. In reality, the delegation included Gabriel Gidor, the CEO of Israel Aerospace Industries, the leading government-owned defense company, along with senior representatives from the Israeli foreign and defense ministries. The Israelis were just as confused about whom they were dealing with. “Were they engineers? Intelligence operatives? Military officers?” recalled one member of the Israeli delegation, who spoke on the condition of anonymity because he wasn’t authorized to reveal details of the trip. “They all wore these ‘Mao Suits’ tunics. We had no way of knowing who we were even talking to.” Until that winter day, Israeli defense officials had never been to China. The two countries did not have diplomatic ties, and nobody on the Israeli side—except for the members of the delegation, the prime minister, the defense minister and a handful of others—knew about the trip. If word got out, Israel knew that the Americans would be furious. The delegation was so worried that for the week they spent in Beijing, they weren’t allowed to contact anyone back home. A mother of one of the participants died while he was in China, but there was no way to let him know until he headed back. The Chinese were also apprehensive. They did not want to aggravate their traditional allies—the Soviet Union and the Arab bloc—by doing business with Israel. But each side had an interest in working with the other. In the aftermath of the Cultural Revolution, China began embracing capitalism and opening up trade to the West (the U.S. was on the verge of restoring ties to Beijing). And with the Iranian revolution underway, Israel had lost one of its primary arms customers. China, Israeli leaders hoped, could fill that vacuum. The man leading the effort was Saul Eisenberg, a Jewish billionaire who, like 20,000 other Holocaust refugees, had fled to Shanghai after World War II. Eisenberg later built a financial empire in the Far East, becoming one of the first Westerners to do business in China, Japan and Korea. He used these ties to interest China in Israeli weaponry and even donated his private plane to transport the Israeli delegation on that maiden flight to Beijing in 1979. Eisenberg was familiar with Israeli defense products from other deals he had helped broker throughout Asia. After a series of preliminary meetings with the Chinese, he returned to Israel with a shopping list—an unorganized mix of missiles, radar, artillery shells and armor—and urged that the government send a delegation. Prime Minister Menachem Begin approved the trip but deferred questions regarding the shopping list to Defense Minister Ezer Weizman, whom he ordered to personally approve what Israeli companies could and could not sell. During their stay, the “foreigners” presented the Chinese with brochures featuring different weapons they claimed they could get from Israel. The Chinese were impressed but did not make any commitments. Over the next year, the Israelis made additional trips, some involving Israeli Air Force planes, which had their blue Star of David insignias removed to keep their missions secret. By then, the Chinese knew they were working directly with the Israeli government. Once Beijing finalizing the shopping, the Israeli delegation brought it to Begin and Weizman for approval. The negotiations were a clash of cultures. The Israelis wanted to sign one contract that could be used for all future sales. They were hoping for a shopping bonanza. The problem was that the Chinese were not used to complicated contracts. At one point during the negotiations, for example, the Israelis insisted on including a force majeure clause in the contract. “What is that?” the Chinese asked. After the Israelis explained that it freed the sides of a breach of contract in the event of an unforeseen act of God, the Chinese answered plainly, “Well, there is no need for that since we don’t believe in God.” It took a year, but the two sides finally reached an agreement. The first shipment—tank shells— arrived in 1981. But the relationship remained a secret, even as the two sides increasingly began to trust each other. The Chinese refused to come to Israel but agreed to sign hundreds of millions of dollars’ worth of contracts for tank shells, missiles and radar systems, among other things, after seeing a couple of photos and an occasional video. They never visited a factory. In the arms sales world, it was unprecedented but showed an amazing level of trust between the sides. In 1985, after dozens of trips, the veil of secrecy lifted just slightly. For the first time, the Chinese agreed to issue visas to nine executives from Israel’s agriculture industry, including a government official from the Agriculture Ministry. That same year, Israel reopened its consulate in Hong Kong, which it had closed a decade before. Israel pressed Beijing to establish official ties, but the Chinese needed more time. In 1992, after the Madrid Peace Conference between Israelis and Arabs, the Chinese finally agreed to establish diplomatic ties with Jerusalem. Civilian trade skyrocketed, growing from under $100 million in 1992 to over $8 billion 20 years later, turning China into Israel’s No. 1 trade partner in Asia. This was “arms diplomacy” at its best, with Israel using superior technology and military expertise to get a country to become its ally. It is a model the country would continue to refine and use successfully—well after the secret arms trip in 1979. Contents WHY INDIA AND ISRAEL ARE DRAWING CLOSER Jonathan Adelman The Jerusalem Post, May 11, 2017 As Israel has emerged recently on the world stage, its foreign relationships have blossomed. Prime Minister Benjamin Netanyahu has visited Russian President Vladimir Putin five times in less than two years and speaks to him frequently on the phone. Netanyahu recently went on a tour of four African nations. Israel is working closely with Sunni Arab states that share a hatred and fear of Iran. Yet, while all these are important, there is another event that may be even more important in the long run – the visit by Indian Prime Minister Narendra Modi to Israel in July. The prime minister is, significantly, visiting only Israel and skipping the West Bank and Gaza Strip. And his visit follows the visit to Israel last January by Indian Foreign Minister Shushma Swaraj. India and Israel, surprisingly, have much in common. Both became independent of British colonial masters at nearly the same time, India in 1947 and Israel in 1948. Both were initially Third World countries. Their dominant groups – Indian Hindus and Israeli Jews – had to fight bitter wars of independence against Islamic enemies. India went on to fight three further wars against Pakistan, in 1965, 1971 and 1999, while Israel has fought 10 more wars. Both countries were founded by English-speaking socialists, Jawaharlal Nehru and David Ben-Gurion. They are the only two of 140 newly independent states since World War II to be democracies from their inception until today. India was the rare country that never practiced antisemitism, and there was no clash between Judaism and Hinduism. Both countries have advanced from a socialist start to greater integration into the world’s global neo-capitalist economy. Israeli and Indian émigrés to the United States do well and often work together. Recent polls show that more Indians (58%) like Israelis than Americans (56%). Both are global minorities that fight to save their homelands in which they have strong majorities (75-85%). Today they both face threats from their Islamic enemies. India faces Pakistan and its 100 nuclear weapons (and likely more in the future) while Israel faces Iran, which is working on becoming a nuclear power. Both India and Israel have nuclear arsenals. Neither country has ever seen the other as a threat. The dominant Indian Hindus and Israeli Jews in the two states face significant Muslim minorities at home and practice religions not common in the rest of the world. Their minorities, 150 million Indian Muslims in India and 1.7 million Muslims in Israel, pose major issues for both countries. Both are creative countries with significant high-tech power (Indian Bangalore and Hyderabad and Israeli Silicon Wadi). Since India recognized Israel in 1992 relations have grown steadily warmer. Today trade between the two is worth $4 billion a year and Israel is a major arms supplier to India. India’s economy, which is growing over 7% a year, is that of a newly industrializing state with $2.5 trillion GDP. It is the number-six economy in the world, while Israel’s economy is at over $300 billion. The Indians are interested in possibly creating a $15b. free trade zone with Israel. This would provide India extensive access to one of the world’s top-five high-tech powers, first world economies ($38,000 GNP/capita) and a leader in modern agriculture. For Israel it would create a mass market (1.3 billion people) that little Israel (8.5 million people) lacks. The Economist several years ago proclaimed that India may pass China as the world’s number one economy in several decades. In the military arena, as the eighth power in the world and possessing highly advanced anti-missile missiles, Israel could be a good counterbalance to hostile Muslim countries. Back in the 1950s David Ben-Gurion, bemoaning a hostile “inner circle” of countries, proclaimed that the outer circle might support Israel. He named the Shah’s Iran, Turkey and Ethiopia as countries that might support Israel. Ben-Gurion would be shocked to learn that in the 2010s the Islamic Republic of Iran was Israel’s leading enemy and Turkey under President Recep Tayyip Erdogan was often hostile. But he would be thrilled and astounded to learn that a huge country like India might take their place in the outer circle. Only time will tell, but India may well turn out to be one of Israel’s closest friends, bound by common enemies and common aspirations in the 21st century. Contents On Topic Links Intel Acquires Israel’s Mobileye For $15.3 Billion In Largest-Ever Tech Buyout: JNS.org, Mar. 30, 2017—The American high-tech giant Intel Corp. announced Monday that it has agreed to buy Israeli vision technology developer Mobileye for $15.3 billion, in the largest-ever acquisition of an Israeli technology company. This places Intel at the forefront of the rapidly expanding autonomous vehicle market. Israeli Economy Ranked 3rd Most Stable In The World For 2016: Zeev Klein, Israel Hayom, Apr. 18, 2017— Near-nonexistent inflation and a low unemployment rate of 4.8% have helped propel Israel to the No. 3 spot on a list of the world's most stable and promising economies for 2016 published by the Bloomberg financial news agency. The Bloomberg list named Hong Kong as the most stable economy in 2016, followed by South Korea. Israeli Firm Signs Deals With India, Vietnam to Provide Water Out of Thin Air: The Tower, May 4, 2017— The Israeli company Water Gen, which developed technology that produces clean water out of thin air, has signed deals to share its innovation with India and Vietnam. The agreements were reached with India’s second largest solar engineering company to provide water to remote villages and with the Vietnamese government to install water generators in the capital, Hanoi. They are estimated to be worth $150 million, according to Water Gen. Successful Israeli Firm Helps African Development By Exporting The Kibbutz Model: Ilana Messika, Ynet News, May 2, 2017— A successful architectural and engineering Israeli company is exporting the renowned kibbutz model throughout the world. Now, in African countries like Angola and Nigeria, one can see the Israeli model prosper, developing the region and creating hundreds of jobs.