Ettinger Report - Israel’s Economy Surges Against All Odds

Yoram will be in the US in August and October/November, available for speaking engagements.

Israel’s economy surges against all odds

Ambassador (ret.) Yoram Ettinger, “Second Thought: a US-Israel Initiative”
Straight from the Boardroom #219, May 3, 2017, http://bit.ly/2pFMsMA

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 – 2ndquarter 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); theDallas-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 theMemphis-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 oddsIsrael’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 onAustralia’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).